Tag Archives: banking

Indirect and Direct Messages…

It was only as I went out of the door of a local building society that I began to realise that I might have been given at least one powerful message through changes that had been made there!

The changes? Now there was a permanent mini-food bank, a collection bucket for the local food bank and a prominent collecting box for the “Samaritans.”

Previously, every banking place I had ever used only ever had items and notices, etc., to do with direct economics. For the first time, items to do with other aspects of life were there too. No longer was finance being kept separate from ordinary, everyday life, in practice if not in explicit theory. My “bank” was now dealing with socio-economics and so facilitating life-money questions and comments!

Does a bank collecting food and money for local people, in an area with high house prices, especially for sea views, suggests that something may be amiss with our policies for the circulation of money?

The growth of food banks is concrete evidence that some of us are starving.

Are starvation and malnutrition structural parts of current socio-economic policies and practices?

A “yes” answer leads us to question what could be done about it. Some might answer, “Nothing!” Others might answer, “Charity.”

A “no” answer results in the need to seek and apply ways to change our current economic policies so that we do not have starvation etc. as a permanent part of our society.

Answers may depend upon perceptions of “The Market”. Does it function efficiently with minimal to nil government involvement? For whom is it “efficient”?

Posted in Op-eds | Also tagged , and | 4 Comments

Schedule 7 of the Immigration Act 2016

Britain is a nation with a dubious imperial past and a rather selective memory; one that has forced open the doors of countries the world over while continuing to close its own, bringing us to the latest measure to be implemented with a view to creating the ‘hostile environment,’ that Mrs May envisages will ‘incentivise voluntary departure,’ of ‘disqualified persons,’ Schedule 7 of the 2016 Immigration Act seeks to supplement section 40 of its 2014 predecessor in precluding banks and building societies from opening current accounts for ‘disqualified persons.’

What’s new about the latest Act, however, is its retrospective effect; in …

Posted in Op-eds | Also tagged , and | 8 Comments

Making banking a genuinely free market

 

You wish to buy a house, but can’t afford one – a predicament many face. You approach the bank for a loan, repayable over 25 years. You’d think that the money the bank has loaned is actually other customer’s savings that is held in some ‘physical’ form, yet you’d be wrong. In reality, when the bank made this loan they created the money by inputting numbers into a spreadsheet; bank-created money accounts for over 97% of money in circulation today.

Effectively this means 97% of our money is also debt. When times are good people pay down their debts and the amount of money in circulation shrinks, along with the economy. Government desires to rid household debt is almost impossible; to do so would shrink our economy and wipe out almost all of the money in circulation.

Moreover, history has shown banks are not fair distributors of money; they create too much money (through reckless lending) in a push for profits and most of the money they create is speculated on financial markets and asset bubbles, fuelling the housing crisis. Regulations have proven to not be worth the paper they are written upon, because banks know that no matter how recklessly they lend, they must be bailed out because many people would lose their savings and no government could allow this. Thus the banking sector is a neither free, nor fair, market; its lending is largely monopolised and it is people outside the financial sector that pay the price for its reckless decisions.

Posted in Op-eds | 20 Comments

Too unpopular to fail?

 

In 2008, financial services firm Lehman Brothers filed for Chapter 11 bankruptcy in the United States. With over $600 billion in assets, Lehman Brothers remains the largest bankruptcy filing in US history. Under-capitalised and enormously leveraged with significant holdings of risky mortgage-backed and residential property-related assets, despite weeks of intense negotiations with regulators and prospective buyers no viable solution could be found and Lehman was allowed to fail.

In the ensuing market chaos, and following a G20 meeting in London in early 2009, the Financial Stability Board was established to monitor the global financial system and coordinate financial regulation among the G20 nations. One of the Financial Stability Board’s key objectives was to end “too big to fail”, the idea that these huge, inter-connected financial institutions with balance sheets comparable to the GDP of small nations were too complex and not capable of failing without having adverse effects upon the broader global economy. As part of a package of measures, the G20 proposed and adopted rules that would ensure that all globally and systemically important financial institutions were required to hold more capital, to segregate riskier investment banking and trading businesses from retail banking operations and, significantly, that upon the failure of the institution, the bank’s creditors have their holdings written down or “bailed-in” in order to avoid future tax-payer funded bail-outs.

Posted in Op-eds | 23 Comments

Farron blasts shelving of enquiry into banking culture

We already know that the Government tried to slip out lots of bad news (including crucial evidence of the hardship caused by the Bedroom Tax) in a giant Take out the Trash day before Christmas, but the Financial Conduct Authority used Hogmanay to slip out the fact that it wasn’t going to bother with publishing a review into banking culture. Apparently it “wouldn’t help.” Try telling that to the people who suffered as a result of one of the worst crashes in history.

Tim Farron was on this one straight away and ended up getting quoted pretty widely. He said:

Posted in News | Also tagged | 5 Comments

Opinion: Liberal Democrats should debate ways of liberating our economy from the power of the banks

“Stronger Economy Fairer Society” was the strap-line that took us into the devastating General Election of 2015.  Some members wanted a fairer society that would support a stronger economy but regardless of which way we place these adjectives and nouns, it’s still unachievable without liberating the UK economy from our five major banks.

As long as our five big banks have the power to create money when they make loans, and lend it back to us at a profit, it is very difficult to see how our economy can achieve anything other than consolidating wealth into the hands of a few.  The Bank of England (BoE) and business generally is having less and less influence on how our economy expands and grows. Not only do we need to challenge this ‘status quo’, we need to radically overhaul the system and liberate the banking monopoly so that our economy functions to support our marketplace.

Properties in London have been sliced and diced according to an economic system that is essentially controlled by five big banks and this has overly inflated prices – driving up rents and sales. Homes for families are now filled with rooms for rent that are advertised as flats. We have less than 20 square meters for a bed, cooking and toilet facilities and are charged £800 per month rent. Generation rent (typically graduate students), are unable to save to buy a home due to ‘market rents’ sucking every penny from their incomes.

Posted in Op-eds | Also tagged , and | 97 Comments

Opinion: There is a reason banks aren’t lending enough to small businesses – the regulator is to blame

Lloyds Bank, Leighton Buzzard - Some rights reserved by dlanor smadaSince the banks were ‘bailed out’ with taxpayers money, a regular refrain from across the political divide has been that the banks are doing decisive harm to the country by refusing to lend to small businesses.

If this refrain were accurate, banks would be denying capital to the businesses that create the jobs to engender a sustainable recovery, instead choosing to deploy the capital in complicated financial instruments that create little value, or pumping up housing markets, or in paying enormous bonuses to bank employees.

This latter is an argument that Vince Cable in particular was vocal in espousing, and as soon as the real state of the bonus culture, now much more shares based than cash based, becomes apparent, he will doubtless claim the credit for that.

Posted in Op-eds | Also tagged | 20 Comments

Opinion: Underpinning local enterprise through the banking system

Despite a last minute attempt to scrap criticisms of the big banks, the Lib Dems are now committed to a powerful programme to create a diverse local lending infrastructure in the UK.

And most important of all, thanks to the Rebanking the UK debate yesterday, the Lib Dems are now clear about how this great diversification is going to be achieved.

The big banks are going to pay for and mentor a new infrastructure of local banks, which will be geared up – and with the expertise they need – to lend money to a new UK mittelstand, the UK small and …

Posted in Op-eds | 6 Comments

Vince on Scottish independence: RBS would ‘inevitably’ move to London

It’s not often we hear from the Lib Dem business secretary Vince Cable on constitutional matters. But today he appeared before Parliament’s Business, Innovation and Skills Committee to discuss the implications for business of Scottish independence, ahead of September’s referendum. Here’s what he said (via the BBC):

RBS would “inevitably” move its headquarters to London if Scotland votes for independence, UK Business Secretary Vince Cable has claimed. Mr Cable told a committee of MPs that the bank would want to be based where it was “protected against the risk of collapse”. …

William Bain, Labour MP for Glasgow North East, asked

Posted in Parliament and Scotland | Also tagged , , , and | 4 Comments

Opinion: Shocking complacency in UK banking reform

In British politics there is one area of policy where popular sentiment and dire need strongly coincide. Banking reform.

Opinion surveys seem to suggest that it is Chancellor Osborne’s ‘Achilles Heel’. Indeed, senior ‘expert’ LibDems have expressed concern over the last three years about the pace of reforms. Now Labour has jumped on the bandwagon, and may reap electoral benefits. YouGov polling of a few weeks ago found…

… 67% thought was ineffective. Only 18% were confident that changes to the banking sector over the last few years were enough to stop a repeat of the banking crash. The

Posted in Op-eds | 12 Comments

Opinion: Why local banks need Lib Dems to act

It hardly seems worth Ed Miliband’s time to actually make the speech on economics today, because it has been previewed, leaked and debated – almost sentence by sentence – all week.

There was a debate about the middle classes on Tuesday.  Then there was the important commitment to competition in the banking sector, where he flagged the idea of a market cap, an important idea – but there are three practical problems with it.

First, there is a danger that it will lead to the big banks dumping poorer customers – though equally, there will be more banks available for them to …

Posted in Op-eds | Also tagged and | 8 Comments

Opinion: This could be the historic moment the banks shift

Tuesday will see one of those moments which may prove a turning point in the development of an effective UK banking system.

That is the day that the banks will reveal the geographical spread of their lending, down to 9,000 different postcode levels.

It is the culmination of a major effort by Lib Dems in the House of Lords earlier in the last two years, with a great deal of help from elsewhere, to make sure that this happened.

It is also a creative moment of possibility – not to criticise the banks, because they need to be given the credit for this …

Posted in Op-eds | Also tagged and | 3 Comments

Opinion: The Case for Community Banking

Lloyds Bank, Leighton Buzzard - Some rights reserved by dlanor smadaThere are signs that the banking crisis may be coming to an end. The old TSB has re-emerged, Lloyds may be returned wholly to the private sector. William & Glyn’s may also re-emerge with investment, from amongst others, the Church Commissioners for England.

So, if we ignore RBS, the banking sector looks like it can get back to solid day-to-day retail banking, can’t it? Well, not quite. Retail banking is now disappearing from our local communities with only local credit unions filling the gap.

Posted in Op-eds | 9 Comments

The Independent View: Will competition and choice open up the banking sector for the better?

Credits CardsIn light of the launch of this week’s Current Account Switching Scheme, the Liberal Democrat conference was well timed to ask at a fringe meeting: “Will competition and choice open up the banking sector?”

In short, the scheme guarantees that anyone who wishes to move their current bank account to another institution will be able to do so hassle-free in seven working days. No burden is placed on the customer and it is all underpinned by a seven-day guarantee. This is real progress from the previous 30-day process and importantly the lack of a guarantee that often saw customers doing the legwork themselves. I hope to see positive effects of the changes in the months to come.

Posted in Conference and The Independent View | Also tagged | 2 Comments

Opinion: Can the bank bailout boost credit unions?

LloydsTSB is now sufficiently strong that the current share price exceeds the price paid by the Government at the time of the bail-out. These shares can now be sold off and the money returned to the taxpayer. The sums are such that there is the potential to transform access to affordable credit for the most vulnerable in society – those hit hardest by the cost to the public of the original bail-out.

Poorer and vulnerable people have continued to suffer disproportionately ever since the bail-out, as incomes from low paid work or benefit payments lag behind inflation. They have faced a …

Posted in Op-eds | Also tagged , and | 1 Comment

The Independent View: How the Payments Council is delivering a payments system for all

Since the beginning of the financial crisis there has been real appetite for reform into how our financial sector works and how we want it to operate. The Liberal Democrats have played an important part in this, both from within Government as well as from the backbenches.

During its time in office, the Coalition has already introduced a Financial Services Act into law and is currently legislating for a Banking Reform Bill. In addition, there is also the ongoing Parliamentary Commission on Banking Standards, which I appeared in front of in late January.

Not only is Danny Alexander ensuring the Party’s view …

Posted in Op-eds and The Independent View | Also tagged and | 4 Comments

Cyprus bailout plan: good idea, badly implemented?

Cyprus’s parliament couldn’t have been much clearer in its rejection of the plan, negotiated between eurozone members, to bail out the country’s failing banks. As a result, Cyprus is now turning from Brussels to Moscow for a lifeboat, and it looks like a deal might be done. Russia is demonstrating once again that is never backward in coming forward to build (or buy) new strategic alliances.

Yet outside the markets pages of the Financial Times, the merits of the original plan seem to have been little-discussed, with the assumption being that the plan was a universally bad one. But actually the idea …

Posted in Op-eds | Also tagged | 23 Comments

Opinion: Government must act to stop Basel reforms

Lichtkunst "Brillant par Tradition" in BaselMost of my working day is spent scuttling between sombre conferences on Central Banking best practice and meeting city economists to get their instant reaction to economic developments.

So when an opportunity came recently to travel to Basel in Switzerland to cover the latest announcement from the committee which aims to create a new framework for banking regulation, I leapt at the chance. But my delight at getting a free

Posted in Op-eds | 11 Comments

William Powell AM writes… Why we must protect rural banking

Almost every week brings news of the closure of bank branches in rural areas. As an Assembly Member in Wales representing a large rural region, I know at first hand the real effects of bank closures on local communities and businesses. Latest figures from the Campaign for Community Banking Services, published in September, show that in the last ten years just under 2,000 bank branches have closed. There are now 900 communities that have only one bank branch and 1,200 communities with no bank branch at all. The traditional ‘Big 4’ banks closed 178 branches in 2011. Estimates

Posted in Op-eds | Also tagged , and | 3 Comments

Opinion: Don’t complain – walk out!

The story of UK banks is the one that just keeps on giving.

While we may be shocked by the LIBOR scandal (even though – let’s face it – we don’t really understand whether we have lost out or benefitted by the bankers’ manipulations) and stand aghast at various episodes of mis-selling and worse, what really matters to you and me is the service provided, well, to you and me.

If I complain about a bank will anything actually happen? Is there actually anyone there to complain to? Or someone who actually gives a damn?

All of us grumble to each other but …

Posted in Op-eds | Also tagged and | 11 Comments

Opinion: Britain has become a corporate state, not a free society

In the months after the financial crisis in 2008, I recall a conversation with an American friend of mine; we discussed the fallout and numerous rescue packages by countries. Financial media outlets, such as Bloomberg and CNBC, described the capital injections into financial institutions as a sign we are “all socialists now” – according to my American companion, this was far from the truth. In reality, Western economies have turned the page to fascism, not socialism.

When he mentioned this to me, I confess, it was rather amusing to listen to; very sceptical of such claims, until the request to research the facts myself led me to a worrying conclusion. The truth of matter is that we are not far off from what British fascists in the 1930s thought the financial sector should administrate to the rest of society.

Posted in Op-eds | Also tagged , , and | 51 Comments

Opinion: Brussels vs. the banksters

European Parliament building European Parliament building

Almost no-one in the UK would these days dispute the fact that the country’s banking sector needs a serious overhaul to correct the runaway behaviour which helped nudge Britain (and others) into the financial crisis. The Liberal Democrats have rightly been most persistent in demanding reforms, in particular a break-up of retail and casino banking, as recommended by the independent Vickers Inquiry.

The latest scandal about fixing the benchmark Libor interest rate plumbs new depths – even by the standards of Britain’s banks. Here were …

Posted in Op-eds | Also tagged and | 14 Comments

LibLink: Stephen Williams says MPs should move their money from big banks

In an article in The Spectator, Stephen Williams argues:

The Libor scandal has shown the UK’s banking sector in its worst light. The public has lost trust in the big banks and are concerned that their politicians are more interested in political point scoring than the urgent task of fixing our broken banking system.

That is why, last year, I joined the Move Your Money campaign, which urges the public to use their consumer power to change the behaviour of the big banks by moving their money, or at least some of it, to ethical, local or mutual financial institutions.

He has …

Posted in LibLink | Also tagged | 1 Comment

Opinion: Make the bankers pay

Back in May I posted on a distinctive message for the next election. This post looks at the defining global political issue since 2008: no, not the House of Lords; the financial sector.

Long before the LIBOR scandal, the financial industry dragged millions into poverty, awarding the perpetrators staggering salaries. But you already knew that. What we need is an intelligent, credible policy response. It is tempting to

Posted in Op-eds | 21 Comments

PMQs: My honourable friend makes an important point

I think David Cameron broke his own record this week:

(To Nicolas Soames) My right honourable Friend makes an important point.

(To Julian Brazier) My honourable Friend makes two very important points.

(To Duncan Hames) My honourable Friend raises an important point.

Posted in PMQs | Also tagged and | 2 Comments

Lib Dems should back a judge-led inquiry into financial scandal

I get why the Tories are opposed to a judge-led inquiry into the scandalous rate-rigging practices employed by Barclays and other banks: their experiences of the Leveson Inquiry show how scandals, even ones that blend across the red/blue parties, have a habit of rebounding on the government of the day.

I get why Labour are in favour of a judge-led inquiry: so complicit were Labour (and Ed Balls in particular) in the catastrophic financial mess of the last few years, of which the banks are just one part, that they are desperate to appear transparent in the hope the inquiry will rebound on the government of the day.

But I don’t get why the Lib Dems are lining up with the Tories to oppose a judge-led inquiry.

Posted in News and Op-eds | Also tagged , , , and | 58 Comments

The banking system was rotten to the core – Clegg

The deputy prime minister is interviewed in tonight’s Evening Standard, where he speaks about, among other things, his attitude towards the British banking system. Here’s an excerpt:

“There is no doubt in my mind that what we saw, what peaked in 2008, was rotten to the core,” he says. “We cannot afford as a society, as a country, to have a banking system that is like a cuckoo in the nest, which pushes everything else out and which causes huge costs for millions of  British taxpayers.

“Yet again the lid has been lifted on a culture which appeared to be permissive of

Posted in LibLink | Also tagged | 10 Comments

Barclays and the Bank of England: BAD rate-rigging and GOOD rate-rigging

The Barclays rate-rigging scandal has conflated a number of issues — Bob Diamond’s bonus, ‘casino’ banking, failed regulators — making it hard to get behind the media’s shouty headlines to understand the issues which should really concern us. Here’s my brief show-your-working attempt, starting with what Barclays.

What Barclays did right: ‘fess up

LIBOR (London Inter Bank Offered Rate) is the rate at which banks in London lend money to each other for the short-term. It’s used as a proxy measure of market confidence in individual banks, as well as a benchmark for setting mortgage interest rates.

Barclays has admitted filing misleading …

Posted in Op-eds | Also tagged , , , , , , , , , and | 15 Comments

++ Barclays chief executive Bob Diamond quits

Yesterday Nick Clegg called for more resignations at Barclays in the wake of the rate-rigging scandal. Well, he’s just got his wish in part fulfilled, with the news that chief executive Bob Diamond is falling on his sword (or was he pushed?). Here’s how the BBC reports it:

Barclays chief executive Bob Diamond has resigned with immediate effect.

The move follows the resignation of chairman Marcus Agius and comes less than a week after the bank was fined a record amount for trying to manipulate inter-bank lending rates.

Mr Diamond said he was stepping down because the external pressure on Barclays

Posted in News | Also tagged , and | 28 Comments

Nick Robinson: Chancellor to announce banking inquiry this afternoon

From the BBC’s Nick Robinson:

The government is to set up a wider inquiry into banking to report by the end of the year.

It will not be a full Leveson-style public inquiry. However, it will be separate from, and much wider than, the inquiry already announced into the abuses of LIBOR – inter-bank lending rate – at Barclays and other banks.

Posted in News | 6 Comments
Advert



Recent Comments

  • User AvatarMichael BG 19th Sep - 1:11am
    I voted against this policy. I also put in a card to speak against it. With regard to the debate I think 18 people spoke,...
  • User AvatarGaryE 19th Sep - 12:19am
    Latest Westminster Voting Intention in The Times tonight CON: 32% (=) LDM: 23% (+4) LAB: 21% (-2) BXP: 14% (=) GRN: 4% (-3) Via @YouGov....
  • User AvatarDavid Allen 18th Sep - 11:52pm
    Frankie: "We are at the end game, time has run out, ... a solution in 12 days ( no chance), which leaves revoke or leave...
  • User AvatarDavid Allen 18th Sep - 11:42pm
    Alex Macfie: "Some people here seem to think that if we play by Marquess of Queensberry rules, then our opponents will somehow be inspired to...
  • User AvatarGeoff Reid 18th Sep - 11:31pm
    Tony H - This is helpful. As often happens we got to the right place but not by the best route. My own feeling is...
  • User AvatarRoss McLean 18th Sep - 11:21pm
    Jamie - there's one more argument we can make against the Tories when they accuse us of being undemocratic. "Undemocratic? You've got a nerve. Your...
Thu 10th Oct 2019