Morning Star letter on Bank of England

The news that there is now "a record five million working people driven into low pay jobs" is hardly surprising in view of the mixed messages coming from the from the Bank of England. (Morning Star,27/10/14) Despite the somewhat encouraging words from Carney to the TUC last month about the need to reduce inequality, and a deputy governor this week warning that bankers are paid too much and "should expect a pay cut ...because of falling profits", there is Andrew Bailey, another deputy governor, expressing dismay that the debate on bonuses "is so divorced from the heart of the matter which is appropriate incentives"! Well, if he was referring to the working people`s need for "appropriate" pay at a time when real wages continue their downward spiral, he would have a point, but of course, like his friends in government, epitomised by Osborne`s frequent trips to Brussels to contest the bonus cap, he is arguing for the continuance of the ludicrous lie that the top paid will only work hard if they have a financial incentive to double their already obscenely-high pay. The City minister may well say it`s time to "move away from banker-bashing", but her case is weakened when the outgoing chairman of Barclays ridiculously says "big fines on banks were making it harder for the industry to win back public trust"! Presumably such things as mis-selling insurance policies to customers, fixing Libor rates and money-laundering drug money weren`t relevant?

    Bailey is the same deputy governor who recently complained that those fines  were making it difficult for banks to re-capitalise, expecting us to have forgotten that £375bn was created by Quantitative Easing for that very purpose. It will be interesting to see whether the European banks do actually lend to businesses the £790bn created for them by the European Central Bank, rather than hoarding it, like our banks.

     It appears that Bank of England managers may be ignoring the Bank`s founding charter which stated that its purpose was to "promote the public good and benefit of our people". The Bank`s website even states that its aim today "reflects that vision"! You could have fooled me! Any chance of Labour promising to change things?