Blame game

Donald Lewis (Letters, 26 December) is wrong to imply that politicians were blameless for the 2008 banking crisis as the UK Government ignored repeated Bank of England warnings that UK banks were under capitalised at a time when gordon brown and Alistair Darling were publically praising London’s banking system.

It was the UK regulatory authorities, headed by Chancellor of the Exchequer Alistair Darling, that had the powers to investigate the RBS/ Amro takeover but ignored the fact that no proper due diligence was done by RBS on a deal worth £49 billion before they gave its approval for the world’s biggest bank takeover, one which brought about the collapse of the Royal Bank. Incredibly, the FSA overlooked the rules on capital by allowing the RBS to dip below the 4 per cent minimum regulatory requirement on capital, to do the ABN Amro deal.

At the time of the RBS Amro deal Fred Goodwin was an adviser to Alistair Darling as chancellor and, astonishingly, was still a member of a key Treasury body advising Labour many months after the banking crisis and quitting RBS.

In a BBC Today Programme Lecture on 2 May 2012, the Governor of the Bank of England, Sir Mervyn King, criticised the lack of action by the Labour government in the earliest days of the banking crisis, when Northern Rock became the first UK bank to fail. Decisive action would have at least mitigated the problems encountered by other banks, including Bar clays, HBOS and RBS a year later.

MARY THOMAS Watson Crescent, Edinburgh