Future global architecture of financial markets
Delivered in Plenary - 3rd December 2008
I would like to pay a special tribute to the German Chancellor, Angela Merkel, who has become the new Margaret Thatcher of Europe. She, like the Iron Lady, believes in balanced budgets and not spending your way out of the credit crunch and economic crisis in an unfunded way. Instead and in contrast, the British Prime Minister, Gordon Brown, has got a massive borrow-and-spend fiscal reflationary crisis economic package, with no way of having a balanced budget.
Whilst I accept that it was our own British banks whose reckless lending landed us in the mess in the first place, with poor regulation and supervision by the government, I believe this fiscal policy – which is highly irresponsible – must also be accompanied by cuts in public spending and well thought out plans to fund it in the longer run. Otherwise we will invite, after a period of economic shrinkage, a period of massive inflation which will erode all our savings and undermine European economies.