If the UK government taxed us less and wasted less on crazy ministerial initiatives which never achieve their objectives and cost huge amounts of OUR money, there would be no crisis, as growth would continue to be strong as the individuals who had control of THEIR OWN money would spend it efficiently and keep growth going. In the USA they believe this philosopy.
That's why it is such a dynamic country and well able to get out of this crisis. In the UK we roll along as one of the highest taxed and regulated countries on earth.

David Nammory, Liverpool,

The word you are looking for but didn't use, Mrs. Cavendish, is blackmail.

The essence of your article is that publicly funded central banks should bail out irresponsible profiteers because of the consequences if they do not.

Well ... I agree that that's what they should do at this moment, but I see no reason to crow about it like you do.

For let's be clear about this: the only reason the US, and because of it the whole world, is facing a slump is because your high-payed self-regulated colleagues acted like a bunch of irresponsible thugs.

I really do believe that a few criminal investigations are in order, followed by a fresh round of tight regulation for the financial sector.

Golodh, London, UK

@KK, Manchester, UK
"How can a couple of phone calls ease the credit freeze where injecting billions of dollars into the system has failed?"
Because almost all Banks in the western world are now members of the World Banking Cartel who take their orders from the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks. When this bank gives orders, other banks obey. So, only one call is actually necessary. To find out how banks really function, see the internet film, "The Money Masters" on Google. It explains exactly what is happening and why, and predicted this situation back in 1995 when it was created.

victor compton, Cherbourg, France

So called Bankers should not benefit unfairly from devious instruments which are invisible and ununderstandable to normal investors and depositors. This has clearly been the case. Having said that, the dithering in UK compared to US is appalling. Don't blame BoE, blame the ultra ditherer - Gordon Brown. He calls the shots in the end. As all say, confidence is key and Brown inspires NONE. He should go back to his Manse and manage affairs within his capability. If he/we had listened to people like Moulton we would not be in this situation. Cash under the mattress? Could be going that way.

Gordon, Weybridge, UK

The problems in the market have originated in the USA and as ever when they have a problem they export it. Mervyn King should force the banks to go back to sensible banking practice. The present system is an extension of a casino which pays bonus dividends to the biggest gambler but when it all comes crashing down the public pay via the BOE. My question to Mervyn King is why do the banks need this injection is it to pay staff bonuses in April no funds should be made available without a declaration from the banks and finance house that they will not pay any bonuses until April 2011 and then only on 2009 trading figures.

DLO, Benfleet, UK

i can't believe the attitude of this woman. to think that the taxpayer should continuously bail out banks that have profited from the same taxpayers in every way possible, just so they can continue doing so, is grotesque.

and then to argue that to tax the rich is a bad thing! if speculation and the crossing of fingers has overvalued major resources then its perfecty fine for the 'correction' to occur. richard is right, this is an opportunity to make the system work better and more safely, but first you must remove and replace the broken bits.

this aricle reeks of agenda, not journalism

Fiendo, Belfast,

i wouldn't call it exactly decisiveness , its more like panic my friend. if you look at the oil prices and the inflation there is absolutely no room for rate cuts and if they lowered the rates its just panic.
in the wake of such inflationary pressures lowering interest rates in economical suicide .

ebbi britt, valencia,

It seems to me that there were fundamental difference's between the Bear Sterns & Northern Rock problems and therefore understandly the responses differed.

One of the main differences was that first Bear Stern's had been on the rocks at least a year & it seems unlikely that the Fed had not contemplated a strategy.

Whereas Northen Rock was sprung totally unexpectedly on Britain and very little could be done once there were ques out of the door - not even a guarantee on people's savings would restore confidence then.

Yes it's true that the government propbably didn't act fast enough, but at the same time understandable! Look at the fuss made over nationalisation, surely it was only right that they should exhaust the private sector before taking it onto the Government's books.

And finally, the moves by the fed can't help the long term stability of the market - it is most likely going to fuel inflation & in the long term undermide risk considerations in the financial markets.

Jack Power, Bourne End,

Have none of you learn,t not to follow the Americans

Michael, Victoria, Canada

At last someone talking sense about the credit crisis rather than trying to grab headlines. Anyone who's says "Let the banks go bust", a view expressed by several readers on these "Have your say" spaces, has no idea of the consequences that would cause.
Hopefully, the latest actions by the Fed, (i.e. PDCF and TSLF) will ease the pain for the US banks, bringing liquidity back into the money markets and improving confidence. Only then can the cost of credit come down and seep down to the consumer.

Nick, London, UK

The FEDS action has only given the green light for yet more doggy deals, and assurance to vast multi billion dollar corporations that they can be as greedy and stupid as they please because in the end the FED will bail them out. The truth is they won't, but how many companies need to run aground before they all realise it? More than enough to sink the economy. By contrast the British system is making sure business' understand it's up to them to do good business and that daddy can't bail them out all the time.

Ross, Southampton, UK

Would a Conservative govt make the slightest difference?

Eliabeth Cickerell, Cambs, UK

Thinking back to last autumn, Mervyn King stated that it was the government that prevented the sale of Northern Rock to Lloyds/TSB, and that his hands were tied by the legislation. I don't remember Brown or Darling denying this, so to blame the BofE seems to be somewhat off target. Unfortunately there has been no change to the law, so if similar circumstances re-occur, we will all be in the same position.

David Leslie, Perth, Scotland

Absolutely right. I have a ring-side seat here in the ABS market which has been the eye of the storm and I have to say watching the BofE is like a trip to Mme Tussauds. They are so much behind the curve. Guys lower down know what is going on but the upward communication and final execution have been hopeless. The Bof E top guys, as was apparent in the House of Commons Northern Rock enquiry, do not understand the markets, period. And this is very dangerous. The proposed clearing bank forum says it all. Merv should have been in dailly contact with these banks, after all what else has he got to do? Give the job to someone in touch.

David, London, UK

So much for free-market Capitalism! This shows what banking is: A giant state-supported scam on us, the public. Tight control is needed so that the super-normal profits of the banks are squeezed out and passed back to us all. Any suggestions how to do it from financial journalists or, are they too 'embedded' with their paymasters to do so?

Conall, Margam, Wales

I'm just an ignorant fool compared with the knowledgeable and learned folk around but...

1) If I'm correct, people spent money that they didn't have. They were given this money by people who also didn't have it. Hmmm, and we want to then prop up both these sets of people like it's a good thing? (think long-term here - can any media person do that or do the demands of producing incessant copy leave them with a short-term radar ?)

2) On the particular points laid out in this piece of tright nonsense created to fill up the pages of a paper with so called news.....
Running around, telling everyone that the sky is not falling in does not make it stop !

john, Southampton, UK

The author of this essay is absolutely wrong. Its because of bailouts like what The Fed Bank of England is doing that will hinder any hopes of recovery from the after effects of the credit crunch being seen today.

It is also immoral for governments to bailout banks or people from making dumb choices as to whom to issue loans to.

As long as countries base their monetary system on paper and utilizing central banks, the terrible after effects being seen now will be the result.

Ms. Cavendish is right on one point, however, that bailouts like this have not been seen since The Great Depression. However, like then, The Fed is doing exactly the same thing today that dragged that out event out then too.

The best thing The Fed and Bank of England can do is get out and stay out of the way.

Mike Renzulli, Phoenix, Arizona, U.S.A.

The Fed's action strike me as one of pure desperation - throwing everything but the kitchen sink to solve the problem. Just because the Fed acts more quickly then the BofE does not imply they know what they are doing.

We are constantly being told about the wonders of the free market and how every nation should open it's economy to free trade. Yet as soon as things go wrong the Government starts meddling in it. I thought one of the effects of the free market was to weed out the weak from the strong, similar to the Darwinian process. If firms make the wrong decision they go bust. Why should the banks get special protection. When the market is going well they award themselves big bonuses yet when they get in trouble they are the first to squeal for help.

Stephen, St.Ives, Cambridgeshire

Well said. The danger is no longer inflation but a deflationary spiral as the money supply contracts due to the banks unwillingness or inability to extend credit.

Arnold Ward, Weybridge, Surrey, UK

I think that there should be strict conditions laid down by any central banks who have to step in to rescue self-induced difficulties of other financial institutions. Particularly an enforced culture change so that banks have to live by the same rules as the rest of us. You cannot sell what you do not own (a criminal offence in the real world). You cannot obtain credit on possible future income, but only on the basis of concrete assets/guaranteed income. If you make wrong financial decisions it should be those making the decisions who suffer (dealers and managers) not the customer. Now is the time to move back to an old-fashioned, but sensible, save for the future culture rather than the current, spend now and don't worry about the future because things can only get better culture.

Rick, Lincoln,

Camilla, Its still early days. The future of Lehman bros. is still in the balance. You are right to say that uncertainty is lethal, and it will take just a few moments of it for another bank to tumble. In this case, who will rescue them? Who will recue the rescuer? The Fed have used all their tricks (except another quarter % drop???), and they can't provide this form of nationalisation for them all.

Nick, London,

There is no free lunch. British bankers, in asking for unlimited guarantees from the Bank of England, are asking the population as a whole to insure them against the business risks they choose to run in order to maximise their profitability.

Mervyn King should only give them the assurances they seek if they in return accept much tougher rules on liquidity and risk, which will reduce their profitability but make it less likely that they will need to call on the Bank of England.

Richard, London,

Please advise what the Fed has done other than to defer the day of reckoning and to use up most of its ammunition with very little result.
A recession is required - it will cut out the dead wood from the economy. Dead wood includes inefficient allocations of capital such as the housing bubble and poor performers such as Bear Stearns, Northern Rock, Countrywide etc.
The European point of view is to be less in thrall to the bleatings of their own Wall Street equivalents, rather than to rush to prop up the unsustainable.
Let the market decide upon the survivors - it will win in the end

rick, sydney,

1) In an attempt to secure a rescue package on the cheap through JP Morgan, Stearns now faces challenges its workers and shareholders. It’s share price has doubled already indicating that the Fed tried to run slipshod over due process. You fail to mention that the government and Northern Rock avoided this pitfall by rejecting Virgin’s attempt to rip off the bank.

2) As for the unfounded rumours on HBOS, the FSA has already launched an investigation into possible market manipulation. Pretty quick response to me.

3) As for Lehmans they were never in danger of slipping under. It’s preposterous to think a couple of phone call from the Fed Reserve brought Lehmans from the brink. How can a couple of phone calls ease the credit freeze where injecting billions of dollars into the system has failed?

4) How on earth are non-doms going to rescue the UK economy if it does slip into recession?

KK, Manchester, UK