With a week to go to the budget, the banks’ lobbying muscle is at full stretch to pressure the government into returning the finance sector into the status quo ante that existed before the crash. They actually have the gall to be demanding an end to criticism of the banking industry, as though (i) they weren’t the largest single cause of the crash in the first place, (ii) that crash hadn’t triggered bailout costs of £70bn plus a doubling of the national debt from £0.7tn to £1.4tn now, and (iii) the consequential recession hadn’t bred the longest, slowest and feeblest recovery since the Victorian times. What is insufferable about the banks is that there is not a smidgeon of remorse about the catastrophe they imposed on the UK, let alone any acceptance of the (minimalist) reforms that have been put in place to prevent a recurrence of their recklessness and insouciance.
Barclays has even urged the government to review the ring-fence proposed by the Vickers Commission to separate retail from investment banking, even though this was itself a watering down of the much-needed re-introduction of Glass Steagall which would have made that separation into a clean break, as opposed to ‘Chinese Walls’ susceptible to regulatory arbitrage. Like the Bourbons, the banks never learn. Their suffocating self-righteousness blinds them to anything which does not maximise their own self-interest, and stuff the interests of the rest of the nation.
Now they’re even objecting too to the introduction of criminal liability for top-level executives whose reckless and incompetent behaviour has caused phenomenal losses for the British economy and for most of the Western world. They don’t object to huge penalties being levied for banks’ misfeasance because that is paid by the shareholders, not them. Yet the only way that their propensity to illegal dealing can be curbed is by the threat of individuals being sent to prison. They are quite prepared to see benefit cheats sent to prison, usually for relatively tiny sums of money compared with their own depredations, but if you fiddle billions of other people’s money (Libor, forex, interest rate swaps, PPI, etc.), they expect to be treated with kid gloves and then move on.
They’re complaining too about the bank levy which was set up to compensate taxpayers for the enormous costs of the bailouts. It’s set at £2.5bn a year, and at that rate would take 28 years to pay off the £70bn they directly cost the country, let alone the doubling of the national debt which is still increasing.
The right policy is restructuring the over-mighty Big 4 banks into smaller units more directly serving the British interest, tighter regulation to prevent another collapse (which is likely in the not too distant future), the re-introduction of Glass Steagall to ensure a real break between retail and investment banking, the early introduction and application of criminal penalties for reckless or grossly incompetent management, and the bank levey steadily increased as bank profits rise – and stuff the banks’ howls of complaints.