Good to read that the eminent economist, Ha-Joon Chang, is suggesting 81% taxpayer-owned RBS, and 33% state -owned Lloyds, should be told to "direct more lending to small businesses", but I was disappointed not to see in his article any mention of the idea of putting "ethics before profits". This was one of the targets the CEO of Barclays set for his bank when he was appointed, long before the recent allegations regarding manipulation of monetary exchange rates. That does not mean, however, that it could not be a target for RBS,especially as governments can "tell RBS what to do". Chang tells us it may be years before new "challenger" banks emerge, so why not have a mostly-nationalised RBS becoming the "ethical" bank on the high street, attracting customers because it was acting in the best interests, not only of the customers, but of the country`s economy. With neither the need to maximise profits, nor the desire to avoid paying the proper level of corporation tax, its top priorities, RBS could offer better deals, as well as providing the necessary branches for regional banks, so admired by Labour leaders. Also, by attracting customers away from the established banks, it would force them to mend their ways, change their culture of greed, and to start employing people to run their businesses and investments with decent values and principles, rather than with appetites for obscene wealth. Who knows, it could even affect the way the large accountancy firms do their business? I noticed the ones involved in helping Chinese "top military and political leaders" squirrel away their vast amounts of cash in British owned tax havens, claimed their actions "complied with appropriate law and ethical codes"!
Politically, it is a good idea for Labour to pledge capping bankers` bonuses, but as Chang says, even if they were either legislated out of existence, or so heavily taxed as to become relatively worthless, their removal would not change the banking culture and prevent the scams, like mis-selling, interest fixing and money-laundering.; a nationalised RBS, being told what to do, might!