2008 Financial Crisis Test for Cabinet? How did they fare?

MCQ for government in September 2008

During the acute financial crisis should the government
(a) set up a bad bank for toxic property loans?
(b) nationalise all or some of the banks?
(C) provide a blanket deposit guarantee?
(d) all of the above?

They selected (d)

Were they right? Time well tell.

I think not as I have written here before

Merrill Lynch advised that the guarantee was “the best. most decisive, and most impactful” option. It would stop the crippling outflow from the banking system and could result in inflows.

The downsides of the guarantee were – could the state afford it? how would it affect out credit rating/ How long would it last? would it irritate and annoy other EU countries?

They said that the government would be playing all its cards in one go.

Merrill also recommended specifically that subordinated debt be excluded from the guarantee.

Thanks to Brian Carey for the summary