"The origins of the banking crisis were many and varied, including low real interest rates, a search for yield, apparent excess liquidity and a misplaced faith in financial innovation. These ingredients combined to create an environment rich in overconfidence, over-optimism and the stifling of contrary opinions.
Notwithstanding this febrile environment, some of the banks have been the principal authors of their own demise. The culture within parts of British banking has increasingly been one of risk taking leading to the meltdown that we have witnessed. Bankers have made an astonishing mess of the financial system. However, this was a failure not only within individual banks but also of the supervisory system designed to protect the public from systemic risk."
UK Treasury committee report on the Banking crisis
It was the bankers wot did it.
The culpability of FSA and the Bank of England is relegated to a single line "this was a failure not only within individual banks but also of the supervisory system designed to protect the public from systemic risk."
I don't buy it. Certainly, the banks were to blame in the same way as a two year old child is at fault when he cuts himself playing with a razor blade. The adults, i.e. the FSA and the BoE, should have been watching out. They weren't and now the UK financial system is a car wreck.