If the banks were too big to fail, why isn’t the British steel industry?

Alex Simpson, University of Brighton

The financial crisis of 2008 taught us that markets fail. But the current plight of the steel plant in Port Talbot, Wales, shows how not all markets fail equally.

Eight years ago the UK treasury pumped £850 billion into a failing banking industry. Teetering on the brink of collapse, the Treasury stepped in through a succession of loans, share purchases and liability guarantees, using 89% of its assets to prop up the industry. The historic step led to the government owning a majority stake in Royal Bank of Scotland, one of the world’s biggest banks, and more than 40% of the combined Lloyds TSB and HBOS banks. Continue reading “If the banks were too big to fail, why isn’t the British steel industry?”