Thursday, 28 June 2012

Now the banks must be brought under democratic control

Its not that long ago that UK taxpayers bailed-out UK banks to the tune of £1.2 trillion. This, in the UK alone, is a sum which dwarfs the amounts being spent on the bailouts of five Eurozone countries - Greece, Ireland, Portugal, Spain and now Cyprus. It was a scandal that this happened and banks such as Northern Rock, RBS and HBOS (which was merged with Lloyds TSB) were allowed to remain under private management and the senior managers continued to award themselves, and traders, vast bonuses. Nobody was really held to account. Nobody went to gaol, despite the damage done to the UK economy, which has lead to savage cuts in jobs and benefits, affecting the very taxpayers who funded the bailout - though Tory chancellor George Osborne couldn't find £81 billion to help them. As I have said before, this is pretty much the biggest heist in history.

But now we find out that Barclays Bank has been fined £290 million by the FSA for fiddling the LIBOR interbank lending rate. Not just Barclays though, apparently they were in cahoots with other banks. This kind of stuff, coming on top of the bailout, beggars belief. Barclays boss Bob Diamond earned £20.9 million in 2011 as chief executive. Did he know what was going on? One thing we have learned from the News International scandal is that top people just can't remember whether they knew anything or not, so perhaps Bob won't.

Bob Diamond: earned £20.9 million in 2011

This is an unfolding scandal so we don't know what the outcome will be but it seems incredible that nobody will face criminal charges. It has to be some sort of fraudulent activity surely? Those affected, and there are bound to be many companies and individuals who lost money, will be asking these questions and expecting compensation. And all this comes on top of the recent RBS IT debacle.

For me, the case for breaking up and nationalising the banks has become unanswerable. There will never be a better opportunity because most of them are bust anyway. For a start, RBS and Lloyds must be brought under national democratic control. They should be broken up. We need smaller, regionally-based banks which can help to grow jobs by investing in local communities, and we need mutuals and credit unions to support and democratise finance in our economy. Finally, can anyone really understand that a UK government can give such support to the banks but can't find £69 million to bailout a hospital trust?

1 comment:

Anonymous said...

I couldn't agree more. But clearly Green Left needs to put some effort into developing a coherent policy agenda around these kinds of economic reforms.

One place to start would be with Alexandro Nadal's book "Rethinking Macroeconomics for Sustainability", in which he makes a case for overhauling the international mechanisms which could facilitate more radical changes

Laurence Pilfold, Green Left