The real root proble
m with regulating the banks is that the politicians are hand in glove with them. The Tories don’t even want to regulate the finance sector so long as it provides them with half their annual income year after year, not just the banks themselves, but the hedge fund billionaires as well. Worse still, no attempt whatever has been made to deal with the fundamental point of corruption – that whatever the big 5 banks do, they will be protected by the ‘implicit guarantee’ that the government will save them from themselves and bail them out because they’re ‘too big to fail’, too valuable an asset to lose, too crucial a part of running the State, etc. Risk-taking at a bank that will always be saved is like playing Russian roulette, but with someone else’s head. Continue reading
Tagged with Bank regulation
Osborne shows his true colours: in the pocket of the banks
Osborne’s sacking of Martin Wheatley, head of the Financial Conduct Authority (FCA) says it all. His sin was that he was too tough on the banks. The banks are the most powerful section of the Establishment which runs Britain, and Osborne is one of their chattels who does their bidding when half of the Tories’ annual income comes from the UK finance sector, so Wheatley had to go. This is a political ousting of the worst kind. Wheatley was a tough regulator which was needed, and is still needed, when almost every week new scandals are unearthed in the finance sector, when the banks cost the UK £70bn in bailouts and a doubling of the national debt to £1.4 trillions, and when new areas of systemic financial risk including the revival of derivatives that caused the crash in the first place and the growth of the shadow banking sector threaten another financial armageddon. Continue reading
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Privatising RBS: a triple whammy against taxpayers, economy and reform
Why sell off the 80% stake in RBS when the Brown government bailed it out in 2008 at a cost to taxpayers of £45bn, yet today’s share price would fetch only some £32bn? That’s a £13bn loss for taxpayers which, as it happens, is almost exactly the sum that Osborne is pledged to raise by cutbacks to disability benefits, industrial injury benefits, child allowances, and tax credits. Osborne declared two years ago about the RBS and Lloyds bank shares that “we want to get the best value for money for the taxpayer”, which is patently the opposite of what he’s now doing. His only bolt-hole is the highly dodgy statement made by his advisers Rothschild that if all the bank’s shares were sold now, including fees, it would make a £14bn profit. But that is a brazen deceit. It not only excludes the £17bn cash cost of the bailouts, it also ignores the guarantees, soft loans and subsidies the government extended to the banking sector as a whole. If all that is taken on board, as it should be, the taxpayer ploughed into the stricken banks as much as £1.2 trillions, according to the IMF. Why isn’t that being repaid in full? Continue reading
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Under-regulated banks get less (for funding Tories), over-regulated unions more
Behind the scenes Britain’s big four banks have now launched a sustained campaign to get the this Tory government to go easy on regulation and review (a euphemism for wind down) the bank levy. Considering the colossal damage that the bankers’ arrogance, mismanagement and corruption inflicted on the British economy which is still on-going and may be for another decade, that takes some chutzpah.
They see it as payback time for the half of Tory party funding which the banks, hedge funds and private equity dish out every year for their benefactors. A more balanced view is that the bank levy is a charge on bank balance sheets to offset the cost of the financial crisis for taxpayers. The truth is that the banking crisis more than doubled the UK national debt which is now £1.4 trillions and still rising. An objective view would be that the current bank levy is nowhere near enough to meet its stated objective. Continue reading
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The City & Wall St are a hotbed of lawbreaking & regulation isn’t working
The implications of the latest survey of the City of London’s culture are stunning. The study by University of Notre Dame and a law firm revealed that nearly a fifth of respondents believed that “financial service personnel must sometimes engage in unethical or illegal activity to be successful in the current financial environment”. It found that there had been a “marked decline” in ethics over the last 2 years and, most worryingly of all, that half the respondents regarded law enforcement and regulatory authorities as ineffective in detecting, investigating and prosecuting securities violations. Continue reading
