Vince: This isn’t a banking crisis, this is a debt crisis

Lib Dem business secretary Vince Cable has sought to reassure the British public that the financial crisis currently destabilising the markets is substantially different to the 2008 crash which sparked the ‘credit crunch’ and recession.

While the Lehmans-triggered crash left the British economy reeling because of the knock-on effect on our banking-reliant financial services sector, notes Vince, this current crisis is the result of the markets’ failure to be convinced by the US and Eurozone efforts to curb sovereign debt — whereas the Coalition’s austerity measures to cut the deficit have the confidence of the markets.

Here is Vince speaking on the BBC today:


(Also available on the BBC website here.)

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2 Comments

  • Andrew Duffield 6th Aug '11 - 7:40pm

    Vince is spot on as usual of course. Yet the government-gifted privilege for banks to create interest-bearing debt-money from thin air remains utterly undiminished and untaxed.

  • Joseph Donnelly 6th Aug '11 - 8:53pm

    Its particularly annoying when people blame bankers for raising the price of bonds, whats the alternative? We force traders to buy our governments debt for a certain price, otherwise they are put in prison? If the government wants to sell its bonds then its going to have to sell it at the price people want to buy it for.

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