We must protect the taxpayer and ensure stability

David Cameron has called for “a concerted policy response” to protect the taxpayer and ensure the stability of the banking system.

In an article in the Financial Times, he stressed that political parties and the financial authorities must show "character and judgement" in the face of the financial crisis.

And he laid out the three areas in which action is needed:

• Restoring liquidity
• Tackling the failure of illiquid markets to value asset quality
• Rebuilding strong banks so that they can play “their proper role” of supplying credit to companies and individuals

David highlighted our proposal for a new Debt Responsibility Mechanism, whereby the Bank of England would monitor market-wide risks from excessive lending and instruct the FSA to act appropriately.

And he repeated his offer of cross-party support to help bring stability and reassurance, stressing:

“Our guiding principle should be to protect the taxpayer where possible and preserve the stability of the system where necessary.”

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