Between December 2001 and June 2008, UK bank assets increased by 310 percent.
It might seem an obvious point but as banks increase the stock of loans, the quality of those loans has to decrease. When banks grow at this shocking rate, it is inevitable that the proportion of bad loans will also increase at a similar rate.
With a 300 percent growth rate, it should be no surprise that a banking crisis quickly follows. The real question is why didn't someone stop the banks. Isn't that what the Financial Services Authority were supposed to do?
There needs to be some kind of public inquiry into this banking crisis. We need to learn the lessons, and we need to hold our institutions accountable. The government can't simply pour in billions of pounds of taxpayers money into the banking system without investigating the reasons for this mess.