EDINBURGH, 11 August (RIA Novosti), Mark Hirst – Proper regulation of the “casino banking system” and an assurance that if they fail they won’t be bailed out by taxpayers is the best way to restrain the financial sector, a leading political figure in Scotland told RIA Novosti Monday.
“The best discipline of the casino banking system is regulation backed by the absolute assurance that if they go down again, they will be allowed to go down,” Jim Sillars, a leading political commentator who has been an MP for both Labour and the Scottish National Party said.
Sillars was responding after the London-based National Institute of Social and Economic Research (NIESR) warned an independent Scotland might not be able to bail-out Scottish banks if a formal currency union between Scotland and England was not agreed.
NIESR said Scotland would need a “new lender of last resort”, but Sillars told RIA Novosti that until the reasons for the previous economic crisis became “fully understood” by the public there should be no further bail-outs if banks get into difficulty again.
“The Western banking system is anything but ‘saved’ and ‘safe’ The Eurozone banks are in a precarious position, including those in France and Germany because they are exposed to Greece, Ireland, Spain, Portugal and Italy”, Sillars stressed.
“When the EU claimed that it was bailing out these countries, it was doing nothing of the sort - it was saving the banks in Germany and France,” Sillars told RIA Novosti.
“It was a clever piece of spin on a population that did not, and has not yet, fully understood what happened with the great crash,” Sillars added.