The collapse of the Dunfermline Building Society proves:
- The urgent need for a Glass Steagall Act in the UK to enforce a split between routine banking based on deposit taking and speculative activity. It was speculative activity in buying second-hand mortgages and in property related speculation that seems to have brought this building society down.
- The urgent need for a People’s Bank in the UK. Please support the campaign.
- The need for action to bring directors of how organisations, including banning them from being directors of other organisations for considerable periods of time. I watched with absolute astonishment the CEO of this failed building society blaming the government for its failure on Sunday night. He ruined this building society. Having imposed a cost of more than £1 billion in all likelihood upon the state he should never be allowed to direct another company in the UK again.
- The weaknesses in the Turner report. I do not think that Turner would have stopped this abuse.
When will we learn the lesson?
When will we stop a tiny minority of people acting in pursuit of their own greed from abusing the common property of millions of other people, and the taxpayer?
Where, apart from Vince Cable, is the politician in a position of serious authority with the nerve to say this?
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While you may be right as regards the future I have serious reservations about the way the government is handling the matter. Do the math and it quickly becomes apparent that the UK taxpayer is most likely left on the hook for at least £150 million where a loan in the range £60-100 million was mooted as the bailout cost. Someone needs an accountant at Whitehall methinks.
Dennis
I agree with your analysis
That’s why we need the reform
Richard
I’m with you on this Richard but more so on point three. I’m sick to death of directors who have failed so comprehensively in their job (irrespective of their duties as directors)insulting the very people who are having to pay for their mistakes.
Was it this fellow who a few months ago said the Dunfermline was not exposed to sub-prime loans?!
what this proves more than anything is that the government will act to try to bolster its poll ratings by interfering in stuff it does not understand. I can’t imagine we will ever find out the facts of this case.
Your comments suggests you regard all lending as speculative, but all depositing as not. I hope you are able to confirm this is no more than a typo?
And I can’t image a ban on this chap would have any effect – you can’t surely imagine he will be in much demand after the way this has been portrayed?
The simple lesson from this is that the tripartite system of regulation failed. Everything else is just people pushing their own agendas.
As you quite rightly point out, the greed, egotism and incompetence of a part of the financial sector is going to be paid for (yet again) by society as a whole; but hey, what’s another billion to add to the hundreds of billions already handed over? Socialism for the rich, capitalism for the poor, I’m sick of it.
That this government hasn’t fully nationalised the banks, sacked all the senior staff and appointed panels of business people from the real economy to decide who to give loans to, and told the shareholders to get lost, is utterly extraordinary.
Vinve Cable is the only senior politician who has any credibility in this, I agree.