Turner-the biggest mistake was an banking intellectual failure

I am not a great fan of the Financial Services authority so was interested in listening to Lord Turner on the Today programme this morning.

He says that mistakes were made by individuals but the biggest problem was that there was an intellectual failure to appreciate that the banking community was building up a risky system

He believes that the latest banking crisis is not that the banks are in a worst position now than they were last October but that the markets has still not got confidence in the system.

He dismissed the Conservative calls for a complete bank audit believing that it totally misses the point,bringing out the point that the losses are known but what is uncertain is the capitalisation value of the banks.

He was also fairly dismissive that the re introduction of short selling has contributed to the latest falls in the markets but vowing to reintroduce the measures if the signs are that it is contributing.

Perhaps his comments that the authorities will not allow the banks to collapse may be the headline that comes from this interview,but as he points out no body knows how deep the recession is and therefore future losses from the banks are unpredictable.