Wednesday, 3 June 2009

The Missing Villians

While the country and the blogosphere appears to have set about the crooks and fraudsters currently residing within the House of Commons, there seems to be some sort of trappist silence regarding the people who killed our banks.

Fred and Tom, Andy and Dennis appear to have vanished into thin air with their (unearned) pensions, while Paul Myners, the minister who’s failure to sack these people should have seen… er Paul Myners sacked, is still the City Minister. It seems that the Daily Torygraph’s 3 week assault on the Common’s expense system has let these people exit the public stage, stage right.

Now Private Eye (dated May 29) is reporting that a report into “UK International Financial Services – The Future” written by Win Bisschoff – a former Citibank chairman – which is for Alistair Darling, is set to recommend that no change to the UK financial industry is necessary and that the report “even pretends nothing has really gone wrong – its all just a matter of perception”. The report also recommends that “regulation should not stifle responsible financial innovation”. I have heard buying bad debts from British and American companies (or as the report called it – “collaterised debt obligations”) called many things but “responsible financial innovation”… ummm... nope sorry that’s a new one, even for me.

Meanwhile our banks have been continuing to show their unwillingness to lend money. This is nothing new, mortgages have had £1000 arrangement fees added to them for no apparent reason other than naked greed. These fees have been in place since last year, but nothing has been done despite their obvious role in blocking new homes being bought.

The New Labour MP Tom Harris asked a question about the banks reluctance to lend money to small and medium sized businesses at Prime Ministers questions a couple of weeks ago. The response from Brown was essentially to tell the constituent to try again, there’s nothing to see so move along. Except there is something to see.

One of the key weapons in the recovery is a liquid economy, which is an economy where, according to my partner, people need money in their pocket to buy things, where shops need money to buy more products and to pay wages. Essentially, according to Ange’s theory, money need’s to circulate in the economy to keep the economy running. Our banks have been somewhat negligent in facilitating this process, and the government have been standing back letting this happen. There is no indication that this will change under Cameron.

While Cameron has been taunted as the “Do Nothing” party, New Labour has shown that they are the “All Talk and No Trousers” party. They are unwilling to crack down on our errant financial services, and have stood back while the banks we own suffocate lots of businesses. It’s this scandal which is proving to be the iceberg under the sea.

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