The Government was under growing pressure last night to call a public inquiry into the behaviour of Britain’s bankers as the Business Secretary, Vince Cable, admitted the sector was a “massive cesspit” that needed cleaning up.
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13 Comments
Yes it is! The entire system seems to have been designed by people who either had no idea of how badly it could be abused, or else had every intention of abusing it. A simple enquiry will not be enough. And when we finally expose what it has done I suspect we’ll find its a real burden on the economy, providing nor real benefit at all.
I’m reading that in 2005, the daily volume of foreign exchange transactions around the world was 4 trillion euros, or about 500 times the sum of exports and imports for Europe. It looks like less than 1% of those FX transactions added any value.
Nice to see policy makers catching up at last! Pity it takes a scandal of this magnitude to get there though. Liberal (later peer) Josiah Stamp is reputed to have said, 85 years ago:
But if it’s going to be cleaned up, it needs recognising that these problems are systemic in the nature of banking and Barclays and the Bank of England have been at it since their first foundations in the 1690s. If politicians actually want to be seen to represent the people who put them in power, us, against these City lizards, then they really need to try to redesign these financial institutions from the root up.
Barclays is bad, but Bank of England is baddest
The system is founded on market manipulation and now that we have this crisis to focus our anger on, it needs to change, completely.
It’s a pity that Barclays has moved so far from its Quaker roots,
Whilst John Freame may have been a Quaker, and quite a pious one by all accounts, by becoming a London goldsmith in the late seventeenth century he entered into a fraudulent precursor of fractional reserve banking.
Now Vince has to take decisive action (not an inquiry) but a clear stand against this.
The breakup of the banks needs to be accelerated so that it is completed within less than two years and real regulation and personal liability for those who infringe implemented. The likelihood of successful prosecution needs to be raised to the levels achieved in the US (at least), and anyone found to have been involved should be liable to a fine up to the value of all wages, bonuses etc received over the their entire career (Proceeds of Crime Act). A requirement to prove that money was received legitimately is an essential part.
If we can make this stick, we will have done more in one fell swoop than all the rest we have achieved in coalition so far and probably more than everything else we will achieve in coalition in future as well. If the Tories try to stop it, it becomes a coalition breaker, as it clearly will show that David Cameron is not interested in controlling his party’s supporters when they transgress.
David, for the first time I think it would be good to have a US style civil asset forfeiture system just for this lot – so everything can be taken from them even before charging them 😉
And whilst I agree that everything should be done to bang them to rights, the problem starts at the very top. As I say the system, from government and the Bank of England down is based on market manipulation. And guess what, the “official” form of market manipulation is the most destructive and distorting.
I expect, Janet, that the adverts are targeting *you*. I see only context sensitive ads on this site. So for me, at the moment, they reflect where Google and others think I’ve visited lately. In fact, all the ads on this page currently are for Samuel Windsor clothing! I find it all really tiresome because actually they are advertising *after* I’ve been searching for something and usually already bought it.
So, if you have, for instance, been browsing sites involving the arms trade, whether critical or friendly, I suspect the ad system works that out and displays for you ads it thinks *you* are interested in based on your browsing history.
In any case, these context based ads are not in the control of the LibDem Voice site itself.
And yes, aside from the fact that the banking cartel funds the arms trade, your post is inappropriately located! 🙂
I agree that the City is a massive cesspit but a public inquiry is not the way to sort it out – it is just a way of muddling the issues and kicking the whole sorry business into the long grass. We need politicians who understand that leadership is taking a stand for what is right and not simply finding a parade and inserting themselves at its head with a megaphone.
There is every reason to suppose that existing laws perfectly address the issues as Evan Davis pointed out on Radio 4’s Today this morning and as I had earlier said on my blog. We should make it perfectly clear to top bankers that they must operate within the law and that if they break it they should expect to be dropped on from a dizzy height. If we allow some people to be above the law by reason of their power and wealth then we do not live in a liberal democracy any more. For me this is a defining moment and as Lib Dems we must ensure that the proper feet are held to the fire and that Cameron and Osborne are backed into a corner where they have to do the right thing, however reluctantly. Doing so would be a big step towards restoring proper regulation to the City.
“Doris money”. That’s how the bankers at HBOS referred to the money of Farepak savers.
“Muppets”. That’s how Goldman traders described their clients.
And yet the banks bang on endlessly about culture, serving their clients and ethical behaviour.
There is an unresolved cognitive dissonance at the heart of The City. The self-perception of the banks at a collective level is totally at odds with the often sociopathic behaviour of some individuals who work for them.
Personally I don’t see how this dichotomy is resolved. The “culture” is window-dressing . The sociopaths are the reality.
Love that headline. Love Vince 🙂
“Love that headline. Love Vince :)”
Stuart – I could bring my self to love him too if he started doing something really tangible to clean up the cesspit….and before the summer recess please!
I also agree that the City is a massive cesspit, but it always was and it always will be. Bankers are vocationally amoral. Just like politicians and news editors.
It will only change when the old, flawed moralities are consogned to history. But this will only happen when they are replaced.
It isn’t about new laws, it is about renewing the public understanding of the purpose of the law. It is a matter of winning legitimate support.
Public officials and executives don’t have a divine right to anything. But we need accountability. Government needs to set an example – prosecuting Gordon Brown for fraud would be a start. Prosecuting Tony Blair for war crimes would be a step in the right direction.