A comment by Michael Meacher in the House of Commons yesterday:
There is something deeply rotten in the City of London, and until that is clearly and fully dealt with, this country will not be free of the risk of a bigger, further financial collapse.
I agree.
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Not according to the CBI:
“it would be wrong to burden all companies with extra, inappropriate regulations when they have played no role in the financial crisis. Listed companies are already covered by the Combined Code, and there has been no widespread failure of corporate governance beyond the few, specific examples in the banking sector”
Apparently it’s all down to RBS and HBOS. Everyone else is blameless.
So glad that the cheerleader for greed in the face of common sense, Richard Lambert was able to explain this for us.
Yes, indeed there is: and it’s called fractional reserve banking.
A system whereby a cabal of banks, protected by a state central bank, insured by tax payers and working in cahoots with government, can create money via smoke and mirrors, earn profits out of thin air, and then use their state guarantees to engage in ‘casino capitalism’.
People are rightly angry with banks, but the solution is not more red tape, straight jackets and threats. The solution must be to stop the process whereby banks create artificial credit during a ‘boom’, only to square the circle by destroying it during the ‘bust’.
In the long run, investment can only come from deferred consumption. The sooner we recognise that the only way to stop the boom bust process is to make banks truly boring and getting rid of their speculative credit creation capacity, we will stop the manic/depressive capitalism we are forced to endure.
This opinion is corroborated by the recent excellent ‘Thinking Aloud’ series on Radio 4 on white-collar crime. One statistic quoted was that insider dealing occurs in at least 25% of all mergers and acquisitions.
I always believed the City contained a certain number of crooks but the degree to which corruption is systemic is truly shocking.
I urge everyone to listen to the programmes and then ask themselves whether the City works for us or against us. It makes the arrogant claims of bankers and headhunters that ‘we can’t succeed without them’ all the more distasteful.
Keep up the good work, Richard.