Probe call over Iceland cash crisis knowledge

THE Government faced calls for an investigation today following claims that the UK authorities knew as early as April that the Icelandic banking system was in trouble.

Channel 4 News reported that the Icelandic Central Bank approached the Bank of England in March for assistance to support its currency as confidence began to ebb away.

Europe's Financial Mess: Leaders Wanted
"This is no time for a novice," declared Prime Minister Gordon Brown at his party conference two weeks ago. What the British people wanted, he said, was decisive leadership and action that would help them with their mortgages, their jobs, their businesses.

His rallying call, a swipe at his inexperienced opposition leader David Cameron, brought him a brief reprieve. After all, in the current financial crisis, who better to lead than the Iron Chancellor who presided over our decade of economic growth and solemnly promised an end to the cycles of boom and bust.

Back in September, Brown's speech was a masterstroke. He was fighting a leadership battle within his own party, as rebel MPs urged a change of leadership. Yet soon after the conference, Former Home Secretary Charles Clarke, wrote in the Sunday Times that Brown lacked both leadership and clarity of purpose. "The prevarication and evasion may appear attractive at the moment, they are actually the most dangerous course of all."

These were prophetic words. The financial crisis has well and truly exposed Brown as a ditherer, incapable of making decisions under pressure. In the last few days, he and Chancellor Alistair Darling have driven the City of London into a frenzy of speculation. Their reluctance to take decisive action over the banking system has contrasted sharply with the leaders of Germany, Spain, Ireland, Greece and Denmark who have offered superior guarantees for their banks and assurances to the public. Brown's hesitation has undermined confidence, with the result that money has flooded out of the country and the stock market has crashed.

As one commentator said today, the only sensible conclusion to draw is that while he remains in office the economic crisis is likely to get even worse. Another, in one of hundreds of comments on this story, puts it more starkly: "for Gods Sake Brown, take action, be decisive. This country is about to go down—either do something or move aside so that someone who will, can, before it's too late."

Also getting hundreds of responses is the blog of Robert Peston, the BBC's business correspondent, who has emerged as a popular hero in recent weeks. Several times a day, he unravels the complexity of the financial crisis and shows he is often several steps ahead of Treasury ministers. His calm, informative and clear-headed reports on radio, television and the web are a badly needed antidote to the government's obfuscation, confusion and side-stepping.

Another hero is Vince Cable, Shadow Chancellor for the third party in British politics, the Liberal Democrats. An economist by training, he is the only politician who has offered any specific policy responses to the crisis and has done so in a straightforward and clear way. But while he is revered by the public, he is sitting powerless between the two major parties, one of which is fiddling while London burns while the other waits for the kill.

In fairness, Brown is not the only leader who has been found lacking in recent days. Angela Merkel's confusing announcement about bank guarantees sent markets plummeting yesterday, while other European leaders have done little more than put on a show of united leadership while focusing on their own problems. Business and political leaders in the US were also shown to be in disarray last week when the financial bail-out package, first rejected by Congress, was only adopted after significant revisions.

How do you lead in crisis? What works and what doesn't work? How have your own business and political leaders responded to the current crisis? And what lessons have they learned?