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The September 2008¹ financial crisis had its origin in deregulated casino banking in Wall Street and the City of London and during the following months the effects spread around the global financial, economic and political systems. In early 2010 a second phase of crisis erupted in Europe as financial markets uncovered the fiscal predicament of several eurozone countries, the PIIGs (Portugal, Italy, Ireland, Greece, Spain) and the related issue of the debt exposure of major European banks. Governments struggled to respond; first in Washington, then in London and a little later in Brussels. In Britain attention turned not only to the regulatory machineries governing the financial sector but also to the fundamental characteristics of that sector where it was variously asserted that the banks had become too big to fail, too concerned with gambling and too confidently reliant upon the implicit guarantee of the state. And similar political impacts were felt in the realms of formal politics, that is, parties and the state, sometimes direct and at others indirect. Incumbent politicians and elite bureaucrats were criticized, yet the New Labour government held on to the bitter end of its legal term of office, at which point a further twist to the tale occurred when the 2010 general election produced a parliament with no single party having an overall majority. A Liberal-Conservative coalition government took power. Attention turned to the party dynamics of such a situation and to the schedule of possible policy stances. At the same time some attention was paid to the mechanics of the system itself, that is, the role of elections and the role/nature of parliament. In the event, one element of the coalition agreement concerned reforms to the financial sector whilst another concerned a referendum on electoral reform.²

DOI: 10.1057/9780230355675_7

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