Mo’s Law

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I have already written today on the subject of banking.

I’m far from alone in being concerned about the issue. I think people are bemused by the issue the world over — and ask themselves how it is we allow it to continue.

In my previous article I linked to one alternative idea — The Royal Bank of Sustainability — which seeks to address the systemic faults in banking by reshaping the hulk of a bank we already own — the Royal Bank of Scotland.

I noted another proposal for the same bank on the web site of ATTAC Jersey — run by good friends of mine. This one is called Mo’s Law. This says:

As we own 84% of the Royal Bank of Scotland this is what we do. We pay depositors 2% interest and loan out money at say 10% on secure loans, credit cards on collateral at 12% on a sliding scale. We would not pay bonuses but a fair wage.

This one move would force the banks to do they same which would benefit the whole economy. They would no longer expect depositors to be satisfied with ¬?% nor lenders prepared to pay 15%.

One added advantage — this would free all these very clever but overpaid bankers so that they could do something useful for society that was not dishonourable.

You can argue it is simplistic — but most good ideas are because they seek to capture within them the kernel of a bigger truth which we can only partly understand — which is certainly true of banking (let me assure you — for bankers too, as has become only too plainly apparent and will be again when the next crash comes along, as surely it will at the rate we’re going).

Inside this argument are, I think, three ideas:

  • That of disgust at usurious exploitation;
  • The concept of fairness in pricing;
  • A deep understanding that bankers do not add ultimately add value. They may on occasion enable it in exchange for a fee, but usually they just redistribute at some cost.

These are worthwhile objectives.

Bankers have forgotten them. If Mo’s Law reminded bankers of the inherent truth of these insights then I’m all for it.