Wide screen devices may view this page better by clicking here

Arguments for socialism :: Banking crisis

spotCampaigns

spotOrganisations

triangleArguments for socialism

spotPeople

spotInternational

spotEvents

spotAround the UK


All keywords


All Arguments for socialism subcategories:

* Arguments for socialism

Capitalism

Globalisation Anticapitalism

Marxism


Banking crisis


Highlight keywords  |Print this articlePrint this article
From: The Socialist issue 767, 29 May 2013: Evict this millionaires’ government

Search site for keywords: Banks - Government - Bankers - Banking crisis

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.

Donate to the Socialist Party

Finance appeal

The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

Inevitably, during the crisis we have not been able to sell the Socialist and raise funds in the ways we normally would.

We therefore urgently appeal to all our viewers to click here to donate to our Fighting Fund.

Please donate here.

All payments are made through a secure server.

My donation £

 

Your message: 

 






Arguments for socialism keywords:

Banking crisis (15)

Banks (291)

Clause 4 (1)

Clause four (6)

Consciousness (11)

Democracy (188)

Minimum wage (312)

Nationalisation (205)

New workers parrty (6)

Northern Rock (34)

Party funding (1)

Photographs (4)

Planning (86)

Podcasts (4)

Socialism 2007 (17)

Socialism 2008 (13)

Solidarity Scotland (1)

Solidarity (381)

The Socialist (1164)

Them & Us (25)

Trade union organisation (7)

Vaccine (13)

What we saw (38)

Workers (1848)

Workers press (1)

Working class (848)

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Article dated 29 May 2013

Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

MEMBER RESOURCES

Pay in Fighting Fund

Pay in paper and book sales

Leaflets

Bulk book orders

New member submission

WHAT'S ON

triangle19 Apr Oxfordshire & Aylesbury Socialist Party: Poland under Stalinism

triangle20 Apr Bristol North Socialist Party: Vaccinations, innovation and capitalism

triangle20 Apr Caerphilly & RCT Socialist Party: Election Question Time with candidates from TUSC

More...


The Socialist, weekly newspaper of the Socialist Party

Covid-19

News

Elections

Workplace news

Lessons from history

Campaigns news

Readers' opinion

Subscribespacer|spacerebook / Kindlespacer|spacerPDF versionspacer|spacerText / Printspacer|spacer1129 onlinespacer|spacerBack issuesspacer|spacer Audio files


Thurrock council workers striking against pay cuts, photo by Dave Murray

Thurrock council workers striking against pay cuts, photo Dave Murray

What We Stand For
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Platform setting: =

Desktop version