Both have their points. Blind panic is the defining recollection of those autumnal days. If the situation had been exacerbated by full disclosure of the mess RBS and Lloyds were in then God alone knows what pandemonium would have ensued. Equally, the economy’s continued decline owes much to underlying instability among financial institutions. Lloyds remains exposed: its rights issue was called to redress deficits incurred by the ill-advised purchase of HBOS, which was effectively made blind. It is a case of six of one and half a dozen of another, though Fallon and Vince Cable are correct that the Government must explain why it propped up HBOS whilst trying to convince Lloyds to buy it, presumably to enhance Brown’s Messianic credentials.
However, there are more pressing concerns than the whys and wherefores of secret loans that have subsequently been repaid. Tackling underlying credit shortages and the banks’ blatant retrenchment at the expense of customers and taxpayers, all of which is hampering recovering, is an immediate necessity. So far it’s all rhetoric and no action.