He did it. On the Today programme. He went and said it. 'Market Failure'. In regards to the bank lending crisis as well.
Oh Gawd. He don't get it. The bank problems are not due to market failure. In fact quite the opposite. It is markets succeeding in passing judgement on failed government policies.
And market failure is [mostly] tautological. Markets do not easily fail, and when they do they usually 'fail' for one of three reasons - Externalities, Monopoly, Political Interference. In this case the credit crisis has it roots 100% in policy failures by Gordon Brown and others.
And bank lending is now constrained by government policy creating an irresolvable tension between the requirements for the banks to hold more capital against instructions to lend more money.