Financial crisis is a mess of Brown’s creation

I think we've got to look at where there has been irresponsible behaviour and I've said for some time that we need reforms in the system," said Gordon Brown today. He's right - and the search ought to begin very close to home.

The 'system' in urgent need of reform is the regulatory regime ushered in by New Labour in 1997. Supposedly putting an end to self-regulation of the City, the Financial Services Authority that Brown himself created nevertheless promised a 'light touch'.

But that light touch turned into a decade of leaving ever more avaricious bankers to their own devices. The collapse of Northern Rock, the destruction of the property market in the wake of the sub-prime crisis and the rescue of HBOS are the result.

Eleven years ago, when Gordon Brown became Chancellor, he immediately handed over the Financial Services Authority to a

man with impeccable deregulatory credentials, former McKinsey consultant and CBI boss Howard Davies, while the mandarin at the Treasury responsible for policy on policing the City was the brains behind many a Tory privatisation, Steve Robson.

It wasn't long before the FSA's inclination to watch from the sidelines was confirmed. When international banking scandals erupted in the late 1990s and early 2000s regulators in the US hammered New York's investment banks with multi-billion dollar fines. The big players in London, by contrast, escaped scrutiny despite officially recognised evidence that similar abuses - including biased stock analysis and insider trading - were rife in the Square Mile.

As Brown's economy became increasingly reliant on financial services for growth and taxes, the object of regulatory policy became less the control of an industry always prone to excess and more the attraction of internationally footloose bankers to the City.

When Davies and Robson, duly knighted, relinquished their positions at the pinnacle of financial regulation they soon took up jobs