Banking and the Future For Britain

By Joan Bridge-Taylor. British and American banks owe their existence to the taxpayers.

If the taxpayers had not bailed them out with billions of their hard-earned money, the banking system would have collapsed last year. Joan Bridge-Taylor asks: Are the banks grateful? Are they prepared to reform? Do pigs fly?

It was their own recklessness and greed which caused the banks to collapse. Their directors aren’t financial whizz kids, they are just incompetent, greedy looters of the public purse. Over 1,000 city bank traders earn more than £1 million a year. They were paying themselves this money while their banks were going broke. They are still paying themselves this money. Sir Fred Godwin (formerly head of the Bank of Scotland) earned a salary of £4 ¼ millions a year – and that was before his bonus payouts.

The bankers still don’t get it though. When tackled on the subject of pay, banks’ spokesmen have the gall to say that they deserve their multi million pound bonuses and will leave the country if they are not paid. With talents and egos like that, then good riddance. Anybody stupid enough to take them deserves them.

Ordinary citizens have the right to expect leadership, or at the very least, common sense, from the government. What does government do? Does it call their bluff? Does it tell them that if their recent activities are the most skillful they can produce, then we are better off without them? Does it tell them that it’s our money, not theirs and they are not going to be allowed play around with it so recklessly again? No it does not. It bows its meek little head, turns away from confrontation and blames the global situation in which we are all caught up.

U.K. banks have received the equivalent of £1 trillion (l,000 billion pounds) in taxpayers money and guarantees to pay them if they need it. This has not solved their problems, or rather it has solved their problems, but not ours.

The banks know that they are now too big to fail. Their balance sheets show sums of money which are four to five times greater than the British GDP (gross domestic product, the sum of all we produce). They got to this size by buying out all the former building societies that were privatized under the conservative governments of the ’80s and ’90s.

As long as this situation continues, the banks can hold us all to ransom. The Governor of the Bank of England says that the banks’ present structure is unsustainable and dangerous. If the banks are too big to fail then they are too big- and must be split up again. We have a Monopolies Commission for this purpose. Where is it?

At present, banks have a very favourable tax position. Loss-making banks pay no tax and profitable ones can offset previous losses against current tax. They can even offset their global losses against their U. K. tax bills. This means that most banks pay very little corporation tax. Bankers, Merrill Lynch, have arranged a deal with the British government to offset losses against profits for the next 60 years! Nice work if you can get it. You or I, the people whose money is backing up this whole fiasco, could not.

Banks are essential to the economy and to the country. It is not their money they are dealing with, it is ours. The banks are nothing more than the combined total of our savings, investments and pension funds, but they do not exist for our benefit. Despite their huge handouts they are using taxpayers’ money to balance off their losses, build up their balance sheets and pay huge bonuses and salaries. They are not spending the money on what it was given for, lending out to hard-pressed home buyers and business; stimulating the economy again. Not only are banks not meeting their lending targets, they are not putting any effort into doing so and the government knows this.

Banks are once again making profits, huge profits, and big city bonuses are being paid. This is a situation that cannot be allowed to continue. We obviously can’t look to this Labour government to get us out of this mess and noises coming out of the Conservative party are not inspiring either.

Whilst Liberal Democrat policy generally seems too idealistic, their treasury spokesman, Vince Cable, makes a lot of sense when he talks about a levy of 10% to be placed on banks’ pre-tax profits. This money (about £2 billions) could then be set against their borrowing deficit. So could the £1 ½ billion scheduled for bonuses for 2010.

The levy would be collected only from institutions that trade in stocks, bonds and other financial packages. It could be taken off again when the taxpayers’ loans and guarantees have been removed. Building societies and other mutual institutions would be exempt. The levy would not apply to normal banking institutions. These are the ones you see on the high street, that take our deposits and give out small personal loans and domestic or small business mortgages.

Bankers were humiliated when they had to be bailed out by government. All their efforts now are going into getting the egg off their face and paying back the public loans. No pressure is being put on the banks to support business. This is the wrong set of priorities. The government must put pressure on those unwilling bankers. Voluntary regulation will not work. They must be forced to do what is in the public interest.

The British Academy, a prestigious group of our leading intellectuals (amongst whom there are very few bankers), has been holding a series of events on the banking crisis. One seminar tried to answer the Queen’s question, “If the deficits were so large, how come everyone missed them?” Questions have been asked whether the banking system is too important to the economy to be left to the private sector. If we want low-risk, utility banking, why not provide it through the public sector? Why not, indeed.

Recently, the think-tank Civitas joined forces with the Royal Academy of Engineering and hosted a review of British manufacturing at which Sir Alan Rudgeits president, said we needed a bank for industry. The Engineering Employers Association backs something similar. There appears to be a general agreement that the country needs financial institutions that work to support the economy and that the government should be thinking along these lines, too.

Banks must not be allowed to go back to business as usual. Bankers’ remuneration must be made public. Loans must be made to help out small businesses, particularly manufacturing and farming. We are going to be in desperate need of both local industries and local food when globalization no longer works in our favour. Globalization favours the big players – like we used to be. Britain is no longer a big player.

In the near future China, then India, then South America will dominate both world trade and world politics. Britain is destined to slip down from the seventh place it occupies now to below tenth place in five years time.

Britain must look to its own resources and become much more self-sufficient if it does not want to collapse into an undeveloped country of the future. The first step in this development plan must be to reform the banking system.

Get the money circulating again and invest in Britain. Huge, inefficient and dishonest banks, working against our country’s interests, must not be allowed to ruin our future.

Bookmark the permalink.

3 Comments

  1. Although you have not stated so in this article, I believe you must know that our Financial institutions are essentially built on fraud.
    I don’t mean that in a jealous, flippant, they have more money than me therefore they must ber up to no good, I mean the Banking system operated throughout most of the World is based on Fraud, it is a Ponzi Scheme.
    Max keiser has a very good rant on this which I will expand upon and hopefully convince you all we have all been royally Sh**ted by the Bankers, and it’s been going on ever since the Battle of Waterloo.
    At least two presidents have been assasinated by the bankers when they tried to introduce Sovereign money ( IE we coin it ourselves, rather than borrow it from international countefeiters, err sorry. Bankers.
    Over to Max Keiserfor a brief introduction so you know there is at least one other person who agrees with me ( actually there’s millions now )

    Max Keiser, telling it like it is.
    http://www.youtube.com/results?search_query=max+keiser+toilet+paper&aq=f

    Is max bring a little dramatic, or is he telling us EXACTLY what’s going on.

    What many people do not know is that banks operate
    a system known as Fractional Reserve Lending, now Banks and Governments like to bamboozle the public so they can hide what they are doing from ( most of ) the public
    What fractional reserve Banking means is this, if you deposit in the Bank £1000, the bank lends that £1000 out to TEN other people.
    IE They only need hold in reserve a fraction, usually 10% what they hold in reserve.
    This is what the average man in the street knows as fraud, in other words, most of what Banks lend out is ‘Credit’ or, to the average many in the street, Thin Air.
    Thin air which you must slave for and even pay interest on.
    Imagine if you or I with £1000 in the bank, lent out bits of ( toilet )paper money to the tune of £10,000, that’s fraud, because I never had 10,000 to start with, so how can I lend it out.
    No one realises this because they manipulate money supply to hide what is going on.
    Obviously, if everyone went to the bank and drew out their ‘credit’ at the same time, the scam would be revealed, they would be asking, where is the money then.
    This is why, when we had the Run on norther rock, Gordon VBrown had to step in and gaurantee the public their money so they would stop all trying to takr out their ‘money;’ because as we now know, most of their money was thin air.
    If you want to lok further into this Scam, I have a webpage, put the kettle on, make a cuppa and pull up a chair.

    The money scam.
    http://harveyalexander.weebly.com/themoneyscam.html

  2. Fiat currencies, fractional reserve banking, Government deficit financing – the whole Neo-Liberal, globalist model cannot and will not survive in a post peak oil world. Creating credit and lending into a contracting economy is not going to work.

    We are going to experience collapsing asset values and sky rocketing prices for consumables, notably food and energy.

  3. Banks ?
    We don’t need no stinking banks.

    What is Bitcoin.
    http://www.youtube.com/watch?v=Um63OQz3bjo

Leave a Reply

Your e-mail address will not be published. Required fields are marked *