by Dr. Ros Altmann

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Of all the groups Chris Blackhurst suggests are responsible for the financial crisis, the Bank of England is the one that deserves most sympathy. It did issue warnings about banks' irresponsible lending, but it was ignored.

The FSA failed to take seriously long-term weaknesses with the banking sector - little wonder when it was considered suitable to appoint Sir James Crosby, the ex-chief executive of HBOS, as its deputy chairman. But then under the Government's remit, the FSA's main objective was to maintain the integrity of the financial system, with protecting the consumer down the list of priorities.

In both the lead-up to the crisis and the months since the bail-outs, no-one has been looking after consumers' interests. Interest rates cuts have taken money from savers and pensioners and given it to borrowers and bankers. Even if such an approach can produce an economic stimulus, ministers have undermined their objective by cutting rates so far and so fast it has engendered widespread loss of confidence and left many savers and pensioners in no position to spend. The Government now needs to try other measures such as direct lending from central reserves and bringing back the 10p tax rate for those on lower income if it wants to spare people the worst effects of the recession.

Ros Altmann