RSS Feed
July 1st, 2012 
FAKE NEWS for the Zionist agenda George Osborne described the damning trail of emails that emerged from the bowels of Barclays last week, in which traders addressed each other as “big boy,” and “dude,” as they connived to fix the Libor rate, as “the epitaph to an age of irresponsibility”. He would dearly like us to believe the comforting fiction that under the failed regulatory regime designed by Gordon Brown and Ed Balls, selfish bankers ran amok, wreaking havoc on the economy and society; but that since the credit crunch – and his own arrival in Downing Street – the culture in the Square Mile has changed.
Barclays boss Bob Diamond has sung from the same hymn sheet in recent months, insisting that far from being a rapacious, morally bankrupt monster, the bank is now a “good citizen”.
Yet the Libor revelations were only the most recent of a string of scandals over the past weeks and months that have laid bare what Sir Mervyn King, capturing the public mood, has called “shoddy” and “deceitful” behaviour.
Osborne would boast that he has not been idle in reforming finance: he has laid plans to tear down the “tripartite” structure created by Labour, handing back the power to oversee banks to the Bank of England, and creating a new regulator, the Consumer Protection and Markets Authority, to protect banks’ customers. Meanwhile, the government has promised to implement the proposals of the independent Vickers commission on competition in banking – set up to placate business secretary Vince Cable – which will impose a legal separation between the risky casino arms of banks and their high street operations.
The FSA certainly failed the public badly in the run-up to the credit crisis; but there are doubts about whether the Bank, which is also being handed fresh powers to oversee the economy, has the capacity and skills to do much better.
Vickers, meanwhile, offered a cautious, legalistic solution to the narrow question it was posed; but even when his proposals are fully implemented in 2019, it will leave the money-grubbing mores that have leaked from the City’s trading floors to the boardrooms and branches of high street banks, and beyond into society, fundamentally untouched.
As King clearly implied, when he talked of a problem with both the structure and the culture of banks, a few tweaks to regulation structure will do nothing to turn around an industry that has been fatally tainted by the events of the past five years.
The parallels with what we have learned about some parts of the news media in recent months are striking. Just as News International’s insistence that phone hacking was confined to a few “rogue reporters” has been revealed as a lie, the idea that a small number of Bollinger-swilling renegades operated unnoticed inside our great British banks is absurd.
Indeed, the gravity of the issues facing the banking industry are hard to overstate.
Britain’s banks have received tens of billions of pounds of taxpayers’ cash in bailouts, cheap loans and implicit subsidies to keep them afloat through these past five years.
Yet their leaders have continued to pay themselves extraordinary sums of money – with Diamond alone taking home almost £100m since 2006 – while carefully cultivating their links with the political elite.
More than a quarter of Tory party funding comes from City firms and when David Cameron wielded Britain’s veto in Brussels last year, he was not batting for the unemployed or for hard-pressed manufacturers in forgotten corners of the country, but for City financiers hoping to defend their cosy practises against interference by the European Union.
And while politicians of all stripes – not least New Labour – lauded Britain’s banks as national champions, standing shoulder-to-shoulder with the best in the world, the experience of consumers queuing in their local high street branch was of chaotic service and aggressive sales tactics.
Far from serving the economy, by helping people to save for the future and channelling resources to promising businesses to enable them to expand, the banks were busy flogging loans that could never be repaid and insurance policies that would never pay out, while staking our savings on now notoriously risky investments such as sub-prime American mortgages.
The visible impact on the economy, through the recession that followed the financial crisis, and the price of rescuing the clapped-out banks, is obvious.
But there are less visible and no less pernicious effects too, from the thousands of talented engineers and scientists sucked into the Square Mile by the lavish rewards on offer, to the scandalous neglect of other critical sectors, such as manufacturing, while the money-men hobnobbed in Downing Street and lined up to receive knighthoods.
Pressure is steadily mounting for a Leveson-style public enquiry into the culture and practices of banking.
David Cameron’s reticence is understandable: his own links with the City are just as chummy as those with Rebekah Brooks. But Ed Balls, who is deeply implicated in drawing up the lax rules that allowed behaviour such as that uncovered at Barclays to flourish, has suggested he is willing to see his own record scrutinised. Cameron should be, too.
Only through a thorough-going examination of how Britain’s banks have been allowed to metamorphose from sober, conservative guardians of our savings to high-stakes gambling dens run by overpaid alpha males will we see how our own society – and economy – have been warped and corrupted by that process.
Only by re-examining our relationship with finance, and reminding ourselves and them that they are meant to serve the public – not the other way around – can we rebuild the trust that has been so cruelly shattered over the past five years.
Diamond infamously told MPs last year: “There was a period of remorse and apology for banks and I think that period needs to be over.”. He was wrong: plenty more remorse and apology would be appropriate, and welcome; but much more importantly, the values, culture and practices of finance, as they have developed since the “Big Bang” reforms of 1986, must be torn down, and a smaller, humbler, simpler world of banking built in their place.
Related posts:
Views: 0
Posted in 
Tags: 
