Managing an Economic Crisis

This is a strange moment in time. Never did I think we would get to a point where we would be 'nationalising' banks in this country. It goes against my Conservative principles. Given though, that we are in the middle of a global economic crisis with a frozen money market around the world, I can live with short term 'recapitalisation'.

The IMF has warned that we are close to financial meltdown. Something had to be down quickly to try and recover the economy and avold an even deeper downturn in the financial markets. The Conservatives are therefore supporting the government on the recapitalisation plan. To do nothing would have been the wrong thing. Exceptional circumstance require exceptional steps.

The important task now is to create a plan for the future. In a free enterprise system, the banks play an important role in creating and stimulating a strong and vibrant economy. We need to strengthen the banks - get them lending to each other again, get them lending to business owners and home owners again. We will not be able to turn the economy around until we strengthen the balance sheets of these banks. We need to though address the systemic failure we have seen in the banking system so that we manage these issues more effectively in the future. We need a significant review of capital rules, liquidity and access to markets. The global regulatory arrangements also need to be looked at.

Should CEOs of failed banks keep their jobs? Well, that is down to the boards of these companies to decide. Mistakes have been made and risks have been taken...and CEOs are responsible for this. Banks should not have been taking irresponsible risks.

Should they be receiving huge bonuses? I believe people can earn good salaries and bonuses if they perform well. If the organisation has not performed...then they do not deserve a bonus.

We do need to help families and businesses at this difficult time. Many people are currently worried about their savings, their mortgages and their jobs.

Gordon Brown promised us that he would get rid of boom and bust. Our current situation shows that either he does not know what he is talking about and/or he cannot deliver what he promises. He encouraged a borrowing binge through our enormous budget deficit. If he wanted to cut taxes right now to recover the economy...he can't. The cupboard is bare.

We all can learn from this ...