Sunday, 11 July 2010


In relation to the banking crisis and the vast debts that us mere mortals are having to repay, perhaps is best to paraphrase Winston Churchill, 'Never have so many had to pay so much on behalf of so few!'. George Osborne and the Tories have reluctantly gone along with the much publicly stated need to regulate the more unsavoury aspects of the banking sector. The question is will they sign up to President Obama's stated aim to regulate tax havens?

Just in case you forget, back in January (2009) President Obama announced two measures to curb the banks, the first aimed to stop banks from engaging in proprietary trading, private equity, or any other activity for their own profit unrelated to serving customers. The second measure aimed to take further steps to limit the balance sheet size of banks so that they cannot in future acquire “too big to fail” status.

President Obama is right to characterise his proposals as a victory for common sense and while we may have some way to go before the banks are forced to act responsibly, the first steps have been taken. I wonder if David Cameron will follow suit sooner or later – or are the Tories (despite everything that has happened in an almost unregulated, greed driven finance sector over the last few years) still far to enamoured with their friends, the dodgy money men in the City of London.

On occasion you may find yourself wondering exactly how far we have progressed in the last hundred years of so? In the later years of the nineteenth century and the early years of the twentieth century US Presidents, Presidential candidates and politicians including Theodore Roosevelt (a Republican) and William Jennings Bryan a Democratic Presidential candidate) were opposed to the power of big business and fought against the dangers of monopoly capitalism (as personified by ‘Standard Oil’ and 'the Trusts’ in Teddy’s case). In 1896, William Jennings Bryan, a future Democratic presidential nominee, warning against the power of finance, said: “You shall not crucify mankind upon a cross of gold.”

President Roosevelt and William Jennings Bryan had (and in my opinion has) a valid point - if you believe in the ‘free market’ (and the City money men claim to) then no organisation can be too big to be allowed not to fail. The massive public subsidies effectively made some of the banks 'publicly owned’, yet they are still largely run by bankers who are so thick skinned or self interested that they carried on regardless when it came to the awarding of bonuses - would that they had been more generous when it come to advancing loans to small to medium sized and larger businesses in their hour of need.

The new Con Dem UK Government should seriously consider breaking up and 'privatising' the larger 'publicly owned' financial institutions, and selling shares on the open market (with specific quotas on how many shares any one institution can own) – because from where many people are sat these bloated overgrown banking organisations appear to be a serious block on the ‘free market’.

We also need to a degree of similar rules for financial institutions across the globe, off shore must become a matter of historical record – there must be no where the financial institutions can hide and no more endless threats of taking their “ball” (businesses operations) elsewhere and relocating because they have lost their so called special status. it is important to remember, that no one, not even bankers (or MPs) are above the law and no one is above financial regulation and scrutiny.

The OCED estimated that some $10 trillion dollars worth of private wealth is concealed in Paradis Fiscaux (tax havens). These financial dead letter drops tend to be used by banks, multi-national companies, corporations, the super (and not so super) rich, drug dealers, dictators, terrorists, fraudsters and other criminals who use them to hide and launder their wealth. One significant side effect of Paradis Fiscaux is that they enable people and organisations to avoid paying their fair dues to the society in which they live, unlike the rest of us mere mortals.

To put things in perspective - the $10 trillion dollar figure produced by the OCED means that the lost taxation normally accused would be more than double the entire planet's global aid budget. President Obama, President Sarkozy and Chancellor Merkel are on record saying that off-shore capital needs to be properly regulated - Gordon Brown (remember him?) waffled, will the Con Dems sign up or are they in the pockets of the money men in the City or under the influence of Lord Ashcroft - who's
heart may be in Belize with his wallet?

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