The chancellor’s ideal to educate people on how to manage their finances is unlikely to help problems in the wider economy, an economist has said.
Senior economist at the Institute for Public Policy Research Tony Dolphin suggested it had little to do with causing the financial crisis and will also fail to solve it.
"Giving people basic advice on how to run a bank account and what they need to do to pay for pensions and so on, is all very well but [there is always] an element of human nature," he continued.
On June 2nd, the House of Lords Economic Affairs Committee published its report on banking regulation and supervision and found that there is an inadequate definition of roles and responsibilities of the Bank of England, the Treasury and the Financial Services Authority.
It also found a failure of macro-prudential supervision – surveillance of the stability of the financial system as a whole – as a contributory cause of the crisis.
The committee also recommends that in future regulators should focus more closely on the risk models used by banks.