Financial rescues

There are pertinent comments on the B&B nationalisation by economist Chris Dillow quoting ex-Halifax director John Kay.

I was surprised to hear Nick Ainger (Labour, Carmarthen West and South Pembrokeshire) on "Good Morning Wales" this morning criticising the US Congress for delaying the Bush/Bernancke/Paulson "rescue" package. He seemed to be saying that representatives and senators should have accepted, without question, proposals from the executive.

Leaving aside the matter of a MP questioning the democratic processes of a friendly power, did Mr Ainger not see the flaws in the original package? It was summed up in a phrase which cropped up frequently in reports from Washington: it favoured Wall Street over Main Street. Nor, rightly, would economic liberals in the Republican party accept increased tax-payer exposure to risk.

In the end, after intense weekend discussions delaying the break-up of Congress, improvements to the measure were hammered out.

In Westminster, given that parliament was in recess and that events were moving swiftly, the chancellor and the Bank of England were right to take over Bradford & Bingley, without having to use any taxpayers' money, a course endorsed in advance by Vince Cable. However, parliament needs to debate all the issues when it returns.

In particular, MPs should look at the decision to sell off the Bradford & Bingley branch network so swiftly to Banco Santander (owners of Abbey National and Alliance & Leicester) in view of the implications for employment and competition.