I am against market fundamentalism. I think this propaganda that government involvement is always bad has been very successful - but also very harmful to our society.

Making an investment decision is like formulating a scientific hypothesis and submitting it to a practical test. The main difference is that the hypothesis that underlies an investment decision is intended to make money and not to establish a universally valid generalization.

However, you have to recognize that regulations will never be completely successful and they will always be full of holes. You must constantly be ready to fill new holes. Actually regulation should be kept to a minimum, but there has to be some cooperation between market participants and authorities - as was the case in the early postwar years. The Bank of England was a very successful regulator by cooperating with market participants. This cooperative spirit was broken by the market fundamentalists.

The scope for improvement is infinite, precisely because perfection is unattainable.

Economics seeks to be a science. Science is supposed to be objective and it is difficult to be scientific when the subject matter, the participant in the economic process, lacks objectivity.

If we care about universal principles such as freedom, democracy and the rule of law, we cannot leave them to the care of market forces; we must establish some other institutions to safeguard them.

This crisis has the potential to be a lot worse than Lehman Brothers.