I quote from the Economist’s leader on recent events in the UK banking sector:
….This debacle holds lessons for the way Britain regulates its banks. As Mr King pointed out, defending his performance in front of a House of Commons committee on September 20th, the law prevents the Bank either from staging a covert rescue operation or from engineering a swift takeover; and flaws in the protection of depositors mean that, once an overt rescue operation is under way, depositors will flee. Mr King defended the separation of powers between the Treasury, the Bank and the FSA, but he was wrong to. It has exacerbated the system’s flaws; nobody was in charge of the operation.
Nobody was in charge of the operation.Â
Somehow, over the last decade or so, this has become true in so many places, in so many ways. Multinational organisations, governments, public sector companies, the private sector, everywhere. The story is the same. Quango-ed and committee-d to a point of gridlock, decisions are often glaringly visible only in their absence. Accountability becomes a word reserved for matrix charts and consultant-speak. And when something actually happens, almost everyone heads for the hills. A few remain to shoulder the blame and to mop up.
Nobody was in charge of the operation.
I saw a recent report in the UK suggesting that there’s been ballistic growth in the number of quangos here since 1997; the cost of such quangos was described at around Â£188 bn, which is over twice the NHS budget or, for that matter, the Defence budget. I hear that similar things are happening in many other parts of the developed world. [Who knows, maybe it’s time to come up with a new term “artificial employment”.]
Northern Rock. Katrina. Terrorist actions. Enron. Worldcom. Whatever else you want to add to the list. So many committees, so little time.
We need to think hard about what’s happening. We seem to be sprouting whole armies of intermediaries everywhere, lost in the vegetation of modern jurisprudence and legislation, creating something far worse than just the nanny state; a state where it is no longer possible to lead or to “govern”. A domino-effect house of cards where so much effort is made to manage risk that the risks themselves intensify into something new and infinitely more dangerous.
Small print and get-out clauses overshadowing and dominating the space, drowning the valuable, yet vulnerable, voice of professional opinion.
Nobody was in charge of the operation. The natural consequence of our becoming ever more part of a world driven by The Risk Management of Everything. [I definitely need to catch up with Michael Power.]