The failure of RBS was like "Murder on the Orient Express" - multiple villains - Fred the Shred wasn't the only one. One of the villains (rarely mentioned) was David Cameron. His speech in 2005 (the one wot got him the job) accused Gordon Brown of being the "regulator in chief" - a popular and common line for the Conservative to take throughout the Blair/Brown years. It was dangerously wrong. Brown was "Light Touch" for three reasons:
(1) The failure to regulate led to huge financial sector profitability which led to huge tax liabilities which funded huge increases in public expenditure.
(2) By default because regulation was split three ways - The FSA, the Bank of England, the Treasury. This led not to "over-regulation" but to culpably failed regulation.
(3) Political pragmatism. Brown could shrug off Cameron and the other Tory accusers because their "over-regulation" jibe at entry wasn't true. New Labour was the lightest-touch administration in post war history.
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