Banking fat cats should be left to fail, not given subsidised super profits
October 16, 2009 8:26 PM
Britain's biggest ever subsidised industry - the big banks - bailed out by billions of government money are now back in business, raking in the profit; their main objective to enrich their top staff whilst paying paltry sums to the depositors who entrust their savings with them, and refusing to lend to productive industries who could provide real jobs. Meanwhile shareholders seem powerless to have any real control over these businesses, letting their top employees pay themselves millions in unearned bonuses on a grossly inflated scale of the real worth of such staff.
"People will be rightly furious to see Goldman Sachs paying out bumper bonuses just 12 months after it was bailed out by the US government," said the Liberal Democrat Shadow Chancellor. Commenting on news that Goldman Sachs has set aside £10.3bn for bonuses, Vince Cable said: "It is farcical that so soon after the reckless greed of bankers brought the world economy to its knees, we are seeing a return to business as usual. "There is a fundamental problem that the banks which made it through the credit crunch can now operate in a near monopoly, with government backing, and reap massive profits".
Share and commodity prices are soaring, not so much because of any economic improvement, but due to the sheer weight of government money put into the banks, and who rather than lend it to individuals and businesses, to encourage real economic activity, have instead returned to the casino, and are playing the numbers to inflate top staff bonuses.
Yet both Labour and Conservatives see this as business as usual, there are no grand plans to reform the banking system, to cut banks down to size so they are no longer too big to fail, or to reform the way big companies are able to ride roughshod over shareholders (equals the passive pension funds with which we entrust our savings).
The alternative option of letting the banks go bankrupt whilst safeguarding depositors money was never seriously explored during the credit crunch, the message being bankruptcy is OK for bank customers but not for the banks themselves. It is no accident that the chief government advisors throughout the financial crisis of last year were bankers, and the Conservatives, silent in any real opposition, have their party funds bankrolled by banking figures.
Liberal Democrats want to see real reform of the banking sector, and an end to state subsidy of the banks In the five boom years up to the start of the credit crunch UK banks paid £203bn in taxes, whilst the cost of the UK bail out for the banking sector is estimated by the IMF at a minimum of £289bn!!!
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