Barber riles Mandelson over financial regulation
By Alex Stevenson
Union leader Brendan Barber locked horns with business secretary Peter Mandelson over the performance of Britain’s financial regulatory structure at the Fabian Society new year conference.
The clash came after Lord Mandelson rejected the idea the government had adopted a laissez-faire approach to the financial word in the run-up to recent collapses in confidence.
“There are huge areas of the financial services which have been beyond the regulator,” Mr Barber said, naming hedge funds among the institutions he held responsible.
“So what?” Lord Mandelson responded. “The problem we have is with high street banks. Hedge funds are not the ones who have gone wrong.”
But Mr Barber remained defiant, insisting that hedge funds had played a big role in the “repackaging phenomenon”.
The exchange came at a breakaway group of the conference on ‘fairness in the recession’.
Lord Mandelson had previously admitted the regulatory system had a role to play as he explained his views on what caused 2008’s nose-diving share prices.
“You were incentivising people to take excessive risk – to take chances in putting together assets of very different values, creating a potpourri of financial products. traded and marketed by people who did not know what the consequences would be when their mixed value was recognised,” he said.
Lord Mandelson said that, in addition to the incentives and reward for excess which fuelled the bubble, responsibility was “also partly a question of the supervisory process of what’s going on”.