Mervyn King: Banks putting profits before customers
Saturday, 5 March, 2011 Leave a comment
It is only right that the statement from Mervyn King should make news although the headline isn’t news to anyone! It should probably read “Banks putting profits before everything and everyone except each other”.
I have been amazed at how often, over the last couple of years, intelligent and informed people have “celebrated” the gradual return of banks that WE own, to profitability!
Their return and the bonuses that are taken as a result, are only possible because of the money (our money) that they lost.
So we gave them more…that they committed to invest in UK business. But haven’t. Where is there any basis to restore trust!?
Now, through interest rates that reflect an economy of their making, rather than the current B of E, rate we are AGAIN funding their recovery.
Debt for generations of individuals and families is the long term cost. Misery for entire communities suffering through the loss of Public services and businesses that face a daily battle for survival. The “feedback loop” is completed when failing businesses and crumbling social and cultural infrastructure illustrate the price that Political and Financial elites are prepared to inflict to maintain institutions that are victims of the excessive complexity they have created over years of “mismanagement”.
History and recent events in other countries tell us that this is unsustainable…but, then again, we have known this for some considerable time!
The governor said that, over the past two decades, too many people in financial services had thought “if it’s possible to make money out of gullible or unsuspecting customers, that’s perfectly acceptable”.
He said: “Why do banks in general want to pay bonuses? It’s because they live in a ‘too big to fail’ world in which the state will bail them out on the downside.
“We’ve not yet solved the ‘too big to fail’ or, as I prefer to call it, the ‘too important to fail’ problem.
“The concept of being too important to fail should have no place in a market economy.”