First, abandon the myth of the 'independence' of the Bank of England. Second, abolish the FSA.
Central banks are never independent. Governments both set and can - and do - alter their terms of reference any time they like. Let's stop pretending otherwise. Governments control central banks, not the other way round.
Think about it. Don't like the way the economy is going? Sack the government. Don't like the way the central bank is 'managing' the economy? Sack the government. The new government will change the bank's remit lest you sack them, too. Central bank not controlling badly-behaved commercial banks? Sack the government, and the new lot will... See? Not difficult, is it?
The FSA, Brown's pathetically starry-eyed, sycophantic effort at Greenspan-mimicry, was impotent from the start because the great economic genius did not understand what he was doing. Not the existing system, nor what is necessary, nor why. A little learning was ever a dangerous thing, and that's what Gordon Brown has, unfortunately for Britain - a little learning about economics.
The FSA was never tasked to supervise the banks. That's just what Gordon told the voters. Its real job was to massage his crotch using his preferred technique: box ticking, which was mostly what its staff were employed to do. And boy, did the FSA make Gordon feel good. It had no other purpose, as we can now see.
The Brownian set-up of the FSA and the 'independent' Bank of England was designed to make the Labour government look good. That's all. After the death of a tired government, almost anything the new lot does looks good, or at least fresh, creative. And everything did look good. Prudent. Responsible. Not at all like the desperate years of Labour madness in the 1970s. That is, as long as Brown stuck to Kenneth Clarke's Conservative fundamentals - low tax and low state spending.
The independence of the Bank was neither here nor there - an attractive-sounding garnish, nothing more. It was expertly spun into the 'Iron Chancellor narrative' which, because the first two years were Tory-ish, as Blair and Mandelson decided they would be, lulled us into believing that Labour had changed its ways - grown up at last. For a while, we believed the bastards. Well, not you and me, but an electoral majority did and returned them to office twice more.
Eventually, after gritting his teeth and strutting about for a couple of years, Gordon Brown found it impossible to keep his socialist, central-control, redistributionist muscle in his trousers any longer. Out it came and penetrated every orifice of British society, as he incontinently Sovietised about 60 per cent of Britain.
Thanks to the reassurance afforded by the 'independent' Bank of England, no-one outside the banking business realised that no-one was watching the commercial banks. Their directors were getting stinking rich and contracting with their shareholders for those riches to continue long after they had handed over to others. But that didn't worry Gordon, whose tax revenue from the banks had risen beyond his wildest dreams.
The Masters of the Universe flocked to London which became their capital. Their brethren on Wall Street were worried, though - worried enough to warn the US government about London now being the centre of gravity of the global financial system, at a serious cost to the United States. Remember that, whenever Gordon tells you that the problem is 'global' and 'it started in America'. The problem has two tap-roots: one in Greenspan-land and the other, equally important, in Brown-land.
This suited Brown admirably. The billions in taxes he could now take from the banks were financing Operation Soviet. The bankers were happy because they were getting filthy rich, tax or no tax. The electorate was anaesthetised: the growing numbers of Soviet clients with welfare or with indexed-linked pensions and salaries creeping above those of their compatriots in the shrinking productive sector, who in turn were pacified by Gordon's "Free money!"
Every night, Mr and Mrs Voter were lulled to sleep by Uncle Joe Gordon's fairy stories. He especially loved telling them his favourites, Gordon Slays the Boom-Bust Monster and Gordon's Bottomless Money-Pot.
All this time, the Old Lady of Threadneedle Street, gagged and with her gnarled but experienced hands bound behind her back, was made to watch Gordon at work, grinning and gurgling with pleasure as he destroyed all that his predecessors - and the people - had built. She feared Gordon coming around to beat her again, with the big stick which she had once used to quell the excesses of foolish bankers. She could only tremble as everything began to collapse around her. She wept.
And... what's that sound? Look - it's the people, gradually waking from their drugged dreams of Gordon and his fairies, rubbing their eyes in disbelief. They are wailing as they gaze around them at the utter devastation of their land, their property, their places of work, their life-savings, their hopes...
'Where is he?! Where is Gordon?!' they rage. 'He did this! Where is he?!' And they begin to march, taking up broken tree-limbs as they go, to use as cudgels...
Gordon is in his bunker. The door is firmly closed. Hearing sounds from somewhere outside, he cries out: 'Don't come in! You can't come in! I'm... working... I'm... getting on with the... job! Uh, oh yes... uh... uh... aaah...'
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