Alistair Darling warns on stability of UK economy 10 years after the financial crisis
09 Aug 2017 By Peter Walden
Ten years ago to the day since the start of the financial crisis, former chancellor Alistair Darling, who navigated the UK through the 2008 recession, has warned regulators not to be complacent about the stability of the economy.
On the 9th August 2007, French bank BNP Paribas froze three large hedge funds that
The financial system across Europe and the United States was on the brink of collapse as banks around the world stopped lending to each other. Billions of pounds of taxpayers money
Customers queued outside Northern Rock to withdraw their savings. The closure of the BNP Paribas funds sparked a sharp rise
“In the early stages it looked (like) there was just a problem with Northern Rock,” said Darling. “However, it became clear as we went through August of 2007 that more and more banks were becoming reluctant to lend to each other - which was extraordinary at that time - and that there was a more deep-seated problem.”
The economy was starting to collapse. A year later Lehman Brothers posted losses of $3.93 billion in the third quarter of 2008, blaming heavy write-downs on toxic mortgages.
Ten years on from the worst financial crisis since the 1930’s, former chancellor Alastair Darling has sent a stark warning that regulators cannot afford to be complacent about the stability of the British economy. Darling stated that the “massive uncertainty” caused by Brexit, combined with mounting consumer debt should start to raise “alarm bells”. Darling went on to highlight the next interest rate rise as pivotal, explaining that “When interest rates go up, and they will go up, if not this year then certainly next year, and suddenly people find they are going to be paying more in their monthly payments, that’s when you need to watch out.”