Banksters are “socially-useless” shocker!

Lord Turner is the head of the FSA (that’s the Financial Services Authority, not the Food Standards Agency).

If the Tories win the next election, he’s toast and so is the FSA which will be abolished, its powers returned to the Bank of England.

So that’s probably why he’s giving strong views on taxing banks – the kind of talk that gets frozen out of polite society in the City, I expect.

The kind of reforms Turner suggests could save the capitalists from their chaotic system – but would hurt them in the short term by imposing costs to implement the regulation of apparently speculative or dangerous activities.

Transnational corporations are lobbying against proposed EU regulations on derivatives which would require deals to go through a clearing house.

In the UK, however, there’s nothing tough planned for the transnationals. The government might be talking up food sovereignty, the transition to low-carbon manufacturing, and so on, but there’s no plan to put the casino-capitalists on a diet.

Response to Turner’s views are revealing:

The Chancellor, Alistair Darling, asks what would replace the City as a source of employment and tax revenues. So, at least he’s willing to consider alternatives if laid out before him.

The Shadow Chancellor has remained silent. For obvious reasons. No one would believe a Tory Chancellor would crack down on big business.

London’s buffoonish Mayor, Boris Johnson, is perhaps the only UK politician willing to leap to the defence of the City.

An unnamed London banker is quoted in the FT as saying “It is just illogical to want to shrink one of your most important industries,” unless it happens to have led to the destruction of all your other industries, I suppose… He goes on to say: “If you want to turn London into a Marxist society, then great.”

Yes, comrade. Great! Full marks for hyperbole.

“Saint” Vince Cable of the Lib Dems has welcomed what Turner has said, stating that that “competitiveness” arguments cannot be used to defend the status quo:

“If you are engaged in behaviour that is dangerous to the wider British economy, it is right some sectors may have to contract,”

However, Nick Clegg, the Liberal leader, has said that taxation would be unworkable as a way of shrinking the City as global agreement would be required.

It was interesting to observe President Nicholas Sarkozy of France revealing his tough plans for reform to bank remuneration – which will only be implemented if there’s a global agreement. Which in political terms, is a win-win deal. If the rest of the world says non, he wins; if the rest of the world says oui, he wins.

What changes do I suggest, then?

Well, given that the financial services sector could not exist without the taxpayer support that has been given, the government should ensure that restructuring takes place with the following modest reforms:

* Voluntary redundancies only, and terms and conditions respected for the pay and pensions of bank staff on low- to middle-incomes. Workers in the financial services industry should not be made to pay for the greed of their employers.

* Executive pay, pensions, and other benefits should be capped at all financial institutions – even those in which the government has no shareholding. If executives want to flee elsewhere, let them – there are plenty of talented people willing to take their place and be justly rewarded.

* To prevent future banking crises, the nationalised banks should be mutualised rather than be privatised. Mutual financial institutions – the credit unions, building societies, and Cooperative Bank – have served their members/customers and behaved responsibly.

Stimulus-pocus

The recession is deeper than we thought, the central bankers say.

No shit? Gee, these guys are at the cutting edge. I wonder how they found out – perhaps they saw the unemployment lines…

Their solution is simple – keep interest rates at a record low and erm, print more money.

How much, you ask?

Oh, say another fifty billion pounds…

Quantitative easing. It sounds clever, but that doesn’t butter parsnips.

Why do I get the feeling that the only thing QE is stimulating is the profits of the banks?

Okay, so the bailed-out banks have reported losses – but things are going great for the remaining banks (their investment arms at least!)

As for the real-world stimulus mesures, like the car scrapage scheme and the reduction of value-added tax, these will not be extended.

Why do I get the feeling quantitative easing will be given another go?

Darling begs the banksters, yet again

Bad news for Alistair Darling.

No, not that his cat’s just died, which is sad enough.

But that the banks don’t listen to his pleas to lend.

For months now he’s begged them to do something to help the small and medium enterprises, which are the back-bone of the private sector, get affordable credit.

But no, despite having nationalised much of the banking sector, the banksters aren’t listening. They’re profiteering.

To cap it all, John Kingman, the head of UKFI, the arms-length company which administers UK citizens’ collective stake in the banks, has announced that he’s stepping down to get a bigger pay-packet in the private sector.

If Darling is serious about wanting to help people through the recession – to keep businesses going and keep workers in their jobs so we can get out of it – then he should put representatives on the boards of the nationalised banks and make sure they give small businesses a fair deal.

We need democratic public ownership – with workers’ representatives on the boards of the banks.

In another months’ time there will be thousands of people out of work because the banks are being greedy – and they won’t be begging New Labour to change course…

A 90% tax on banker bonuse: who could object?

Not the Daily Mail.

Who’s scared of the bankers? I mean, it can’t be any worse than Deal or No Deal, surely?

We could get Noel Edmonds on the phone to these guys…

Would he be any worse at it?

Truly the drunks are running of the brewery, the vampires are in charge of the bloodbank, the lunatics have taken over the asylum…

The Morning Star reports:

Labour MP John McFall tore into Prime Minister Gordon Brown in Parliament on Thursday over obscene bonus payments to bankers.

Mr Brown went along to a question and answer session with senior MPs hoping to fob them off with a tame document suggesting a few feeble banking “reforms.”

But the terrier-like Mr McFall made Mr Brown squirm, telling him: “I put it to you, Prime Minister, that the horse has bolted.”

He instanced the average bonus of half a million pounds each for bankers at Goldman Sachs announced just this week.

The West Dunbartonshire MP, who is chairman of the Treasury select committee, protested that the recent £9.6 million pay package for Royal Bank of Scotland chief Stephen Hester “is very similar to Cristiano Ronaldo’s contract at Real Madrid.”

He added: “The City has won. Like Ronaldo, they are running rings around both the government and regulators.”

Mr McFall demanded that Mr Brown must act to make sure that ordinary citizens can “trust the banks” and get a “fair deal from the banking system.”

Pale with tension, Mr Brown could only fall back on his prepared brief as he faced Mr McFall and other members of the Commons liaison committee in the Boothroyd Room in Portcullis House.

The Prime Minister agreed that “excess payments” to bankers were “unacceptable.”

Then he added weakly: “It is only on the basis of long-term performance that we can guarantee the bonus system.”

He said that an interim review of banking governance published on Thursday recommended that “bonuses and remuneration should be over a five-year period.”

Mr Brown stressed that there also needed to be “proper transparency” and a regulatory system “to take action where necessary.”

Thursday’s review was drawn up by City bigwig Sir David Walker – who was director of Lloyds Bank between 1992 and 1994.

He urged that non-executive directors of banks should be “better informed” and actually attend to company duties a bit more often. He suggested they spend “up to 50 per cent longer” at the bank.

Bonus schemes should include a “significant” deferred element to discourage short-termism, he added.

His wishy-washy report said: “Many boards inadequately understood the type and scale of risks they were running and failed to hold the executive to high standards of sustainable performance.

“Bonus schemes contributed to excessive risk-taking by rewarding short-term performance. And shareholders failed to exercise proper stewardship.”

Mr Brown told the MPs’ committee that Sir David “makes some very clear recommendations which I believe will be adopted.”

Tory MP Edward Leigh asked him whether there was any truth in press reports of plans for 20 per cent cuts in public spending.

Mr Brown dismissed this as “quite ridiculous,” but then added that “there are tough choices that have to be made.”

He said that £9 billion of cuts were being made in back-line public services “so that we can increase spending in front-line services.”

And he confessed that extra spending on the Iraq and Afghan wars had amounted to £14bn.

Let them eat guns!

Northern Rock – use it to set up a Post Bank, or sell it to Tesco?

The government nationalised the ailing bank, formerly a building society, but only after many months of foot-dragging. And only on a temporary basis, natch.

Word is, Northern Rock could be sold to Tesco, handing the supermarket even greater power in the economy. Given that a majority of shareholders voted against plans to improve workers’ rights at the company, we know that Tesco isn’t very socially-responsible – so why give them a stake in the banking sector?

There’s a better alternative, as Louise Nousratpour reports:

A coalition of unions and businesses will step up their campaign for a “post bank” tomorrow with proposals that government-owned Northern Rock be used to offer services via post offices.

The group will publish plans arguing that their proposal would give a boost to the Post Office network and provide a vital community service.

A Post Bank would “revive and protect” post offices, support local communities and help smaller firms, especially as the banking system was still in “disarray,” they argue.

The report Delivering the post bank outlines four options the government could follow to establish the post bank. These range from using Northern Rock as a foundation for a mutually structured people’s bank to buying out the current relationship between the Post Office and Bank of Ireland.

Support for the idea of a post bank is growing within all three main political parties as well as among a range of campaign groups.

Postal workers union CWU leader Billy Hayes urged Business Secretary Lord Mandelson, who has been pushing for the part-privatisation of Royal Mail, to endorse this “vote-winning” initiative.

“We have met the challenge to create a workable model for the creation of a post bank,” he said.

“Our new report builds upon the conceptual idea and provides practical blueprints that will appeal to the general public who are disillusioned with the old, tired banking model.”

Federation of Small Businesses chairman John Wright said: “Northern Rock presents the government with a considerable opportunity and it should not consider selling it off privately, but instead should use it to establish a post bank and invest in the long-term future of the Post Office.”

Finance union Unite national officer Paul Reuter argued that the ambition should be to “secure the future of the workers in Northern Rock as well as securing the Post Office network while, at the same time, resolving the problem of financial exclusion and meeting the needs of small businesses.”

Dot Gibson of the National Pensioners Convention added: “Ministers need to rise to the challenge and secure a future for the post office network that serves local communities rather than pander to those who want to run it down and sell it off.”

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