The collapse of Lehman Brothers means that three of the five biggest US banks are no more – not that Morgan Stanley an Goldman Sachs are doing well. The US government is using taxpayer money to bail out the the financial system – by nationalising the lame ducks to stop the contagion spreading. Russia’s market economy is being being rocked by this crisis (and post-war capital flight).
The UK is deeply invovled in this international economic crisis – thanks to globalisation.
Faced with the prospect of another run on a highstreet bank, the UKgovernment has allowed Lloyds TSB to take over Halifax-Bank of Scotland. In 2001, Lloyds was prevented from taking over Abbey National on competition grounds. These laws have been conveniently waived, allowing Lloyds to acquire a rival at a knock-down price.
As the News Line points out,
[Lloyds TSB-HBOS] will have 38 million customers, 27 per cent of the country’s mortgages, and each employs over 70,000 people, making for a joint labour force of 150,000 workers.
The advanced merger talks are being encouraged by both the Treasury and Financial Services Authority (FSA), as any deal, whatever the consequences, is viewed as better than the bringing down of the HBOS.
An amalgamation will bring with it not just a bigger mass, but also massive rationalisations, with as many as 40,000 sackings, hundreds of branch closures, as well as the closure of numbers of call centres.
Who knows what will happen next – it’s possible more banks could go under.
The response from pro-capitalist commentators has been curious, with condemnation of bankers’ greed. Mark Steel, writing in his Indie column, finds also finds it curious:
Because the explanation for the current crash from people like that is they were right to demand an unregulated free market, as society could only be run efficiently if the world’s finances were put in the hands of these bankers. But then it turned out these bankers were more interested in their private wealth than in the good of society as a whole – and fair’s fair, no one could possibly have anticipated that.