In the Labor Party’s annual convention last Sunday, Britain’s Treasury chief, Alistair Darling made it clear that Britain would not protect businesses that make bad judgments. This assumes significant importance in the back drop of the recent GBP 3 billion bailout of the struggling bank Northern Rock by the Bank of England.

Mr. Darling said that Britain needed new regulation to protect depositors and there were lessons to draw from the woes at Northern Rock which were a direct result of the credit crisis in the United States. He said, “No government should be in the business of protecting executives who make the wrong call or bad decisions. My job is to protect ordinary savers, so we need to strengthen protection.” The Times of London quoted him as proposing to consider deposit insurance like the US, which would protect customers’ money in the event of a bank’s collapse.

There is something that is much more scarce, something rarer than ability. It is the ability to recognize ability.