In particular, the article highlights the number of false assumptions that have dominated the discussion.
[It] points to a first-class crisis in government, created by the state purchase of two banks at the height of the 2008 financial crisis – RBS and Lloyds, the former now 84 per cent state-owned, the latter to the tune of around 40 per cent.
Between them these banks account for an astonishing and quite terrifying £1.6 trillion in assets, roughly the same as GDP.
If things go wrong, the British economy could capsize. Mr Redwood told me yesterday that you could easily lose a sum equal to the defence budget for a year if RBS investments caught so much as a cold.
Allies of the Chancellor insist that he made the decision to keep RBS under state control and as a single unit after the advice of two very persuasive men – Mr Hester and Sir Nicholas Macpherson, permanent secretary at the Treasury.
Mr Osborne was reassured that RBS could be “floated off the reef”, kept intact and sold back to the public sector relatively quickly, thus delivering a return to taxpayers.
Meanwhile, Sir Nicholas warned that it would be politically dangerous to intervene directly in the management of RBS and Lloyds.
It would be far better, the Chancellor was told by his top Treasury adviser, to allow RBS to be run by the clique of investment bankers who had been appointed by former chancellor Alistair Darling 18 months earlier....
Others feel that [Mr. Osborne] is too much in awe of City bankers and, like his predecessor, Mr Darling, has been intimidated by their bullying and occasional hints at resignation.The fourth assumption is that politicians and financial regulators will be able to control City bankers.
Its failure forever ends the discussion in favor of banks being required to provide ultra transparency.
Because the only player in the financial markets big enough to stare down City bankers is the financial market itself. Frankly, it doesn't give a damn about the bankers tactics of bullying or hints at resignation.