The Tyrie Commission, after 9 months of deliberation and 571 poages of reporting, has disappointingly limited its purview to governance, standards and culture – issues which certainly cry out for reform, but which are not at the heart of what is really wrong with the banks. But on those issues it has been promisingly radical. It would be difficult not to be when the bankers have nearly blown up the global economy and have so far received nothing more painful than social opprobrium and a reduction in pay and bonuses from the outlandish to the merely excessive.
Nevertheless it is good that there is now real pressure on the Treasury behind the idea that key responsibilities within banks should be assigned to specific individuals (‘the senior persons regime’), together with a licensing regime for any bank staff who could “seriously harm the bank, its reputation or its customers”. It is better still that the report proposes a new crime of ‘reckless misconduct’ for bankers as well as reversing the burden of proof against bankers in civil cases. Continue reading
The problem – a very big problem indeed – for capitalism at its present stage is that demand is flat, or falling. That underlying pattern has existed for the past 40 years, since the demand for continent-wide reconstruction after the Second World War gradually petered out in the 1970s. Thereafter the flatness of demand was obscured by the Cold War acceleration of global arms expenditure, as well as by the world-scale development in technology applying to cars, planes and computers.