With the announcement last week of an eighteen month enquiry into banking practices, and now the Bank of England`s "introduction of a tough new regulatory regime" sceptics will no doubt think that, yet again, the electorate is being conned by the government into believing, as the election approaches, that everything possible is being done to prevent the banks continuing their "conspiracy against the public". After all, not only has the Bank`s Governor taken an awful long time, during which banking scams like Libor fixing and foreign exchange rate "manipulation" have been well documented and publicised, to "point the finger" and "hint at criminal charges", the Deputy Governor has recently complained that the relatively large fines banks face for the "leaching" of their customers will undermine their efforts to recapitalise! We are frequently warned that such regulation risked "pushing talent and investment overseas". As if!
Of course these mega-rich, City types won`t leave. Where else could they employ their tax-avoiding skills, enjoy the fruits of living in their very own tax-haven, and be paid lottery-type salaries and bonuses? Where else could they buy property giving them minimum 10% annual profits, and then let it out at extortionate rents, giving them more opportunities both to exploit ordinary people, and to avoid paying their fair share?
Sadly, they won`t leave, and take their skills abroad, where they could hone their ability to devise scams like Payment Protection Insurance. Why, they could even go to Mexico and launder drug money, as HSBC famously did, until caught out!
We`ve been hearing for years how these self-professed "best people" will leave the country if bonuses are stopped, pay is lowered, and regulations imposed. The fact that they are still here speaks volumes about the way recent governments have pandered to their every whim! It`s time to call the bankers` bluff!
Aditya Chakraborrty in the Guardian recently de-bunked the argument that more competitor banks are the solution with the question: "what is the point of having more competitors if they`re all doing the same thing?" And when the Barclays CEO, most famous for saying with a straight face that his bank would put "ethics before profits", states on Radio 4`s Today programme that his preference is "self-regulation", the real "culture-change" the Guardian`s editorial requests only seems possible with a radical proposal. Given eight years to implement the Vickers report`s recommendations on "ring-fencing", the chairman of HSBC wants more time, and complains of the "unprecedented" demands on his staff - unbelievable!
A bold Labour party has to summon up the bottle to pledge that the 81% state owned bank, RBS, will become a People`s Bank, with lower profit margins, more attractive interest rates, and trustworthy employees, to attract millions of customers away from the other banks, enabling it to lend more to small businesses. Sadly, I`m not holding my breath on that one, but at least Labour should do everything in its power to prevent another part of RBS being privatised before the election!