Former UK chancellor Alistair Darling has warned that it would be “foolish” to underestimate the inherent risks that still exist in the financial system.
Speaking at the Association of Corporate Treasurers’ Annual Conference in Glasgow on 14 May, Darling said: “There are always risks in everything we do. The idea that it will never happen again is fanciful.”
Darling acknowledged that confidence in the UK economy is much higher than anticipated a year ago, but he said that recovery was fragile. “Just because things appear to be going well doesn’t mean that they are going well,” he said.
He observed that it was “unknown” how long it will take for Europe to fully recover from the financial crisis and he also sounded concerns about the UK’s chronic shortage of housing, which is leading to price rises. “The seeds of what could be the next crisis are being sowed in our housing market. I am very worried about it. Unless we build more houses in every part of the country, the problem is going to get worse.”
In a lively speech, Darling shared insights of his 1,000-day term as chancellor with delegates. He explained that he is often asked which day was the worst one during his chancellorship and observed that he was “spoiled for choice”.
He did highlight 7 October 2008 as a particularly bad day, however. This was the day when he learned that RBS was on the brink of failure. “We came within two or three hours of a collapse that could have brought down the world’s banking system,” he said. “I don’t think any training can prepare you for that.”
Sally Percy is editor of The Treasurer