Latest post on Left Futures

When are we going to get serious with the bankers?

Andrea Orcel, the new head of investment banking at UBS and formerly at Merrill Lynch the adviser to RBS on the takeover of ABN Amro in 2007 (for which he got a fee of £7.5m, but cost taxpayers £45bn in the subsequent bailout) – he no less is now candid enough (or has the gall enough) to admit today that banks are “too arrogant” and “the industry has to change”.

So it’s getting through at last, 5 years down the line, even to the ‘masters of the universe’ themselves. Well, there’s more joy in heaven over one sinner that repenteth…. But there are still clearly 99 as brazen as ever.

The UBS bankers told the parliamentary Banking Standards Commission yesterday that even though regulators had established that 40 staff in the bank knew about the Libor rigging, only 18 had been fired. Moreover the top management denied any knowledge of the rigging, even though it was discussed on electronic chat boards by up to 70 persons within the bank, which implied either that they were utterly incompetent or hugely negligent or simply liars.

So what should be done with the banks and those within them that have caused this country, as well as much of the world, a gigantic and prolonged recession? First, there should be (or rather, should have been, since the Coalition united to vote this down) an independent and thorough judicial inquiry – similar to the Leveson inquiry into the press – which would systematically spell out the full horror of the corruption of the banking system in the era of neoliberal capitalism, particularly the last decade leading up to the crash in 2007.

In the light of that the regulators – though both the FSA and the Bank of England are perhaps too compromised or too ineffective or too collusive to perform the role required – should target the offending banks (fines, restructuring, break-up) and prosecute the offending individuals (fines, disqualification, prison).

Second, a clean break between the investment and retail arms of banks is essential – the Vickers recommendation of Chinese walls is hopelessly inadequate.

Third, a major reconstruction of the UK banking system is needed to ensure it meets the purpose for which it exists – to serve the interests of British industry and British households. At present the Big 5 have too much power, have diverted their focus to overseas speculation and industrial-scale tax avoidance, and are virtually unaccountable.

RBS and Lloyds should be retained in public ownership and transformed into national investment banks to promote a major revival of regional business and manufacturing, and Barclays and HSBC which are corrupted beyond recovery should be broken up into smaller specialist banks focused on unmet requirements of a modern high-tech economy.

Fourth, management of the money supply – the critical component for determining the future direction of the economy – should be taken back from the financial de-regulations of the Thatcher era into public democratic control so that the priorities for the economic and manufacturing renaissance of Britain can be secured.

One Comment

  1. Rob the cripple says:

    Are we going to get serious with Bankers, that’s simple…. NO

© 2022 Left Futures | Powered by WordPress | theme originated from PrimePress by Ravi Varma