The Socialist

The Socialist 29 May 2013

767

The Socialist issue 767

Evict this millionaires' government

Campaign to stop bedroom tax evictions!


No to terrorism! No to racism! No to war!


Unite to fight racism!

Even the cutters say cuts aren't working!

This is what's 'not to like' about Free Schools, Boris

Nasty party exposed by equal marriage bill

Stop the NHS privatisation rip-off


Rotten greedy banks still threaten crisis


PCS conference sends defiant message to the government

PCS Land Registry delegates commit to action

Strike action needed to save Royal Mail

Wales TUC conference - a missed opportunity

No future with Future Directions

Fire service cuts

Workplace News in brief


Haringey TUSC: trade unions and communities prepare for 2014

'Brilliant' South West conference sees record turnout

Fund the fightback in the SP collectathon

Boosting South West Wales paper sales

Socialist Party youth organisers meeting Sunday 30 June, 10.30am-4.30pm, London


Oppose Kazakhstan regime's latest campaign clampdown

South Africa: Eye-witness to the developing struggle

Riots expose inequality in Sweden

Sri Lanka: Working class beginning to move forward


Salford Socialist Students help lead fightback against job and course cuts

London students fight union closure plan

 
 
 
 

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Rotten greedy banks still threaten crisis

Andy Beadle reviews the BBC2 series Bankers

On 15 September 2008, the big city bank Lehman Brothers went bust. Within days, lending between banks dried up.

Only a colossal government bailout let Britain's banking system continue. Across the world similar policies transformed the banking crisis into vast debts for national governments, which they try to pass on to ordinary people by cuts and austerity.

If you thought the original banking crisis had gone away, BBC2's recent "Bankers" series showed that banking methods have hardly reformed. The government is no better placed to face another bank failure.

Programme one covered the Libor scandal. Long after Lehman Brothers' collapse and Northern Rock's bailout, this corruption at the banking system's heart came to light last year.

Libor, an inter-bank lending rate influencing the level of every other loan on the market, is set by the big banks collectively but was unsupervised and unregulated by any outside authority like the Bank of England. The system was based on 'trust'.

Journalist Gillian Tett said she could not penetrate the banks' secrecy on how things are actually run.

Clearly banks, under pressure from shareholders to maximise profits, manipulated the Libor rate to conceal their financial difficulties.

Lord Turner, Financial Services Authority (FSA) chairman 2008-13 admitted he failed to intervene over "legitimate criticism".

Only in July 2012 did the governor of the Bank of England intervene. Barclays was fined 290 million and CEO Bob Diamond was forced to resign.

Royal Bank of Scotland was fined 390 million, UBS nearly 1 billion though no board members resigned. No other banks have yet been named.

The second part, dealing with risk, looked at banking giants MF Global and JP Morgan. Risk, the bankers say, is good.

In practice it's good only as long as you're lucky. Banks keep taking big risks, sure that the government will pick up the pieces if they fail.

In summer 2011 MF Global was one of the biggest financial bankruptcies since the crash. JP Morgan and its chairman and chief executive Jamie Dimon survive, though his bonus has halved - to $10 million!

Both banks found ways of estimating risk - endorsed by regulators - which played down their recklessness.

When even those limits were breached, they simply found imaginative ways of estimating risk. Gillian Tett claims JP Morgan is one of the better-run banks - what are the rest like?

Mis-selling

This episode showed the underlying causes of 2008 are still widespread and a new crash could happen at any time.

The last episode covered the mis-selling scandal. All banks have been involved, ripping off customers, destroying small businesses and ruining lives. Mis-selling could be 25 billion in Britain or 420 a person!

Former bank employees explained the pressures to sell customers products they didn't need. Pressure on staff was so strong the Archbishop of Canterbury confessed he might have succumbed.

A clip showed Gordon Brown praising the financial services sector's contribution. Many bank bosses got knighthoods from New Labour.

Bankers, commentators and politicians talk of the need to rebuild trust in discredited banks. But they were also determined to keep the banks free of all meaningful regulation or government supervision.

All could see the unfairness involved in banking secrecy and refusal to lend money to needy workers and small firms.

Yet none of them had an alternative to more of the same - undemocratic domination by the powerful financial services industry.

A new workers' party unfettered by corrupt links to these money barons could gain widespread support.

It would call for the banks - not just the ones in temporary difficulty - to be nationalised under democratic workers' control.


In this issue


Scrap the Bedroom tax

Evict this millionaires' government

Campaign to stop bedroom tax evictions!


Socialist Party editorial

No to terrorism! No to racism! No to war!


Socialist Party news and analysis

Unite to fight racism!

Even the cutters say cuts aren't working!

This is what's 'not to like' about Free Schools, Boris

Nasty party exposed by equal marriage bill

Stop the NHS privatisation rip-off


Socialist Party review

Rotten greedy banks still threaten crisis


Socialist Party workplace news

PCS conference sends defiant message to the government

PCS Land Registry delegates commit to action

Strike action needed to save Royal Mail

Wales TUC conference - a missed opportunity

No future with Future Directions

Fire service cuts

Workplace News in brief


Socialist Party reports and campaigns

Haringey TUSC: trade unions and communities prepare for 2014

'Brilliant' South West conference sees record turnout

Fund the fightback in the SP collectathon

Boosting South West Wales paper sales

Socialist Party youth organisers meeting Sunday 30 June, 10.30am-4.30pm, London


International socialist news and analysis

Oppose Kazakhstan regime's latest campaign clampdown

South Africa: Eye-witness to the developing struggle

Riots expose inequality in Sweden

Sri Lanka: Working class beginning to move forward


Socialist Students

Salford Socialist Students help lead fightback against job and course cuts

London students fight union closure plan


 

Home   |   The Socialist 29 May 2013   |   Join the Socialist Party

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