DID THEY KNOW WHAT THEY WERE DOING?

In a solitary word : NO!

I am currently reading the report published by The Treasury Committee last friday on the banking crisis.

I am stunned by the incompetence of the lot of 'em.

The banks know that they create the money for our economy. It is a very powerful gift that we have entrusted them with.

They appear to have done some stress testing in case it all went AOT but nowhere near enough.

They also admit to not really knowing what they were doing, what the instruments and vehicles, and whatever other names they came up with, actually did.

They also admit that they did not know where the risk ended up. They simply created the drive for loans and mortgages with all those home improvement programmes and magazines and then sold them on not caring who bought them or for what purpose or whatever.

And one statistic is astonishing: 40 years ago the short-term liquid asset ratio was 33%, but now it's just 1%.

But did they know that if and when it inevitably all went wrong that because they are too big to fail then we, the muggins British taxpayer, would have to cough up with no questions asked? If so who told 'em so? Bilderbergers Brown and Balls?

One phrase the report uses often is 'due diligence' and the report often states that the banks did not do enough of it. There has got to be clause in a law somewhere relating to due diligence, and so far The Fraud Act 2006 Section 4 is the only one I can find that applies. The banks have a massive responsibilty to create money for our economy. They abused that power in this gambling/speculation/distributing risk.

Basically the banks did not take enough due diligence before they engaged in reckless gambling and torpedoed the entire global economy.

The Fraud Act 2006 Section 4 is soon coming to a radio and TV near you.

One more point. So far I have not encountered the evidence from Lord Turner that Brown and Balls told the FSA to lay off The City. I do hope it's in there otherwise I will be very, very disappointed.