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Arguments for socialism :: Banking crisis
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STEPHEN HESTER, the new boss at the Royal Bank of Scotland (RBS) who replaced disgraced chief executive Fred Goodwin, is in line to receive a £10 million pay package.
The chair of the Tory Reform Club when at Oxford University, Hester owns three homes including a 350-acre estate in Oxfordshire and "indulges in all the gentlemanly pursuits" (the Guardian, 13/10/08).
RBS was bailed out by the government after it made a £24 billion loss - the biggest in British corporate history.
In January 2009 the government bought a 70% stake in the bank, incurring a multibillion loss for the public purse. Yet, despite effectively nationalising RBS, UK Financial Investments, (the government's shareholding body) approved the bank's 'long term incentive plan' which handsomely rewarded Hester.
The banking crisis was triggered by the greed of City financiers who had injected vast amounts of unsustainable credit into the system to extend the economic boom, rewarding themselves with billions in bonuses.
Having got working- and middle class people to pay for the crisis with billions of public funds in bailouts, top bosses like Hester and Goodwin are laughing all the way to the bank with their massive remuneration packages.
And if this wasn't galling enough, it transpires that RBS is spending £300,000 on a corporate junket at the Wimbledon tennis championship, including hiring an entertainment suite where 42 guests will be wined and dined each day.
These greedy capitalists should not receive one penny from public funds.
Instead of bailouts, the Socialist Party demands socialist nationalisation of all the financial institutions, with no compensation for the financial 'wizards' who have wrecked the banking system. This should be just a first step to the unification of all the banks into one democratically controlled system.
There should be majority representation at all levels of these banks, drawn from workers, including from the unions in the banking industry and the wider working class and labour movement, with the government also represented.
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Banking crisis (15)
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Minimum wage (312)
New workers parrty (6)
Northern Rock (34)
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Article dated 24 June 2009
The Socialist, weekly newspaper of the Socialist Party
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