FT.com / Companies / UK companies - HSBC and Barclays ride out global storm.
HSBC and Barclays (especially the latter) announced strong profits yesterday.
But as most noted, this did not come as a result of providing a service of benefit to society called banking; the profits came from undertaking an activity now proven to be a cost to society called investment banking. That's gambling by any other name, and tax abuse, and things of that ilk.
How long can this be allowed to continue?
These people are playing with our cash. The liquidity they trade is money pmped into the markets by central banks. The bonds they are trading are used to pay for their own bail out (and yes, these banks were bailed out - just indirectly, not directly). And they play interest rate swaps whilst leaving the real markets short of credit.
We should be angry about that. Because these banks are exploiting society at large - you and me.
And still Gordon Brown sits on the sidelines and watches.
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I’m a classical-liberal (don’t like the term libertarian), but I completely agree with you on this. As the saying goes, we need to save capitalism from the capitalists, though I wouldn’t describe these people as capitalists. Shysters, more like. We never should have bailed some of them out, nor underwritten their risk, nor implemented monetary and fiscal policy that rewards the imprudent (like them) and punishes the prudent. “Moral hazard” seems recently to have gone the way of “prudence” in the language of our intellectuals.
But don’t be surprised about Gordon Brown. He and Ed Balls were always corporatists. Remember how Balls used to call himself “City Minister” even though it wasn’t his official responsibility? Biggest scumbags ever to hold power.
Yes Bruno, absolutely correct. Even if these banks, or shysters as you more correctly call them, have not received bail outs directly, they would still have been brought down by the collapse of the banking system that was only averted by the bank bailout, a bailout that will be paid for by society as a whole for years to come.
That’s ordinary peoples’ jobs, pay and pensions used to pay for the greed and recklessness of these idiots, and now here they are again, paying themselves ludicrous amounts of money and telling us all that they’re worth it, that they pay loads of tax etc etc etc.
Actually, they are merely the beneficiaries of a huge transfer of wealth from society as a whole to the very wealthy. Privatisation of reward, socialization of risk. And this spineless government takes no real action to punish the perpetrators or reform the system. Again, this is no surprise. I’ll quote from one of Richard’s blogs from a few months ago concerning Gordon Brown and tax havens:
“It was Brown, during a decade as chancellor, who boasted of his “light touch” regulation of London’s financial district, stubbornly staving off European calls for greater regulation so that the freewheeling city could overtake New York as the most important financial centre. And it was under Brown, today’s scourge of tax havens, that Britain consolidated its position as the greatest operator of tax havens.”
Says it all really.