Manias, panics and admitting what went wrong

'Financial markets are different from other markets - like the market for haircuts or many other things - because they are prone to manias and panics', argued David Coats of the Work Foundation in a contribution from the floor at the Trust and the City debate tonight.

The government's role is to explain that to the public - and to act to contain the impact of manias and panics, he said.

'The difficult part of the story for a government that has been in office for twelve years is to accept that it has not set the stage right. The need for more regulation which has been argued tonight is absolutely right. So, to some extent, politicians have to admit that they got it wrong'.

How to restore trust?

'A bit more humility from bankers themselves would certainly help'.

Fred Goodwin had failed that test spectacularly, and the whole industry was paying the price of increased public mistrust.

But Coats doubted whether trust could be restored by getting employees onto renumeration boards "when the real problem is with the hedgies"?