HEADING FOR BANKING DISASTER 2

Posted byiainlawson27Posted inUncategorizedTags:, , ,

A letter sent to a number of newspapers. Only one published it so far. Well done the Edinburgh Evening News.

Dear Editor,

Jeremy Hunt’s disastrous roll-back of banking regulations, imposed after the 2007/8 global financial crisis, is extreme folly. He had the effrontery to announce them in Edinburgh, where responsible banking was pioneered.[1]

Since the early 19th century, Scottish banks had a reputation for ethical and sound banking, stemming from the 1925-6 English banking crisis when 61 English banks failed, triggering a world-wide crisis. But Scottish banks, which were organised along join-stock principles, came through this crisis unscathed.[2] Scottish bankers even had to pass a Banking Qualification that maintained the high standards and levels of trust. 

Then neoliberal ideology took over in the late 1970s. Thatcher’s ‘Big Bang’ eliminated banking regulations and allowed banks to operate as private companies with the sole objective of maximising profits. Any consideration of the public good or national interest was tossed aside. 

We know what happened to RBS. Fred Goodwin, who never took a banking qualification, led the bank to a spectacular collapse in October 2008. The government bailed it out and took it over. Thousands of businesses and people lost money. The bank has never recovered. 

After the crisis, the government set minimal banking regulations, but many warned they didn’t go far enough and that another financial crisis was likely. 

The global financial system is teetering and Hunt foolishly believes that by stripping away regulations, he’ll revive the Brexit-induced sagging fortunes of the City of London, a global centre for money laundering. Enriching the banking oligarchs is what this government prioritises. 

Meanwhile, Scots are freezing and banks and energy companies are profiteering. The way to restore sanity is for Scotland to restore its sovereignty.  

Yours sincerely,

Leah Gunn Barrett

24 thoughts on “HEADING FOR BANKING DISASTER 2”

  1. Casino Banking is back with unlimited bonuses for the risk takers.

    Monte Carlo or bust. This how the crazed gambler with the stumbling pot will become great again.

    It is the neo Liberal Tory way.

    As Hunt says, we need to abandon regulation to facilitate growth.

    Given the circumstance of the past the probability of collapse is exactly the same. And like the overbubbled property prices and overbubbled company share prices it is a house built on straw.

    But what option the little people. Its their savings, their pensions when it all, as it will goes wrong.

    Another Brexit Bonus, the Great British folly continues.

    Liked by 6 people

  2. Funnily enough, I travelled to Perth on Saturday with a couple of fellow yessers, and that was one of the topics of conversation. One friend remarked that the amount of debt offering letters he had received recently from a variety of banks, had markedly increased. The last time that had happened was 2008.

    Liked by 4 people

  3. totally agree! there is a bigger issue of borrowing and clean money. Should a citizen of Scotland only be allowed to borrow from Scottish regulated banks?

    That has implications for EU membership but the EU hasn’t its problems to seek about clean money too.

    Liked by 5 people

  4. The evolution of the British Empire is very much like that of a star that grows too large. It became a Red Giant owning, managing and exploiting 25% of the planet’s territories before inevitably collapsing back in on itself after overreaching itself. It is now in the last stages of its existence and heading at an ever increasing rate to White Dwarf status.

    Hunt’s scheme, like all the other chancers of the Exchequer, will merely speed up the arrival of the inevitability of second World status for the UK.

    There will, sadly, be even more causalities along the way than there has already been. Scotland’s people continues to one of these.

    Liked by 5 people

  6. I am old enough to remember investigative journalism in the MSM. I now have to turn to Blog sites to have any insight to the reality of Government Machiavellian plans.

    Liked by 6 people

  7. Reminded me of a quip from Private Eye at the time.
    Q. Odd one out?
    * Fred Goodwin (RBS)
    * Andy Hornby (HBOS)
    * Terry Wogan (Radio 2)
    A. Terry Wogan has a banking qualification.

    Liked by 7 people

  8. Just for a second – think Gers! The movement – the manouvering of money. How we complain and criticise!

    Now stop, and look in your wallet or purse for your bank card.

    Here’s my bet – you will see either the logos of either Visa or Mastercard.

    Now ask yourself HOW they earn the profits that they make – just here in Scotland.

    It is a percentage of every transaction, of every payment, made in Scotland, when we use those cards.

    Now add in the likes of Apple Pay etc on your phone.

    Fact: It is we who are guilty – each and every one of us,, because we are complicit in that happening.

    For the record: A few months ago I gained the approval (in writing) from the Financial Conduct Authority and the Payment Systems Regulator to establish a “Scottish” Payments system – one we can design and operate as a “not for profit” entity. A Payments system upon which a Scottish currency could be established.

    Liked by 8 people

    1. I don’t think folk really understand how significant a public payments system could be Mike. This is how the banks ensure that if they go down we all go down, and also why they’d love to have a cashless society. I’ve often had confused looks from folk in finance when I say that banks should be free market and fully privatised. A free public payments system would be a game changer and provide a much more resilient system. I’d add to that the option of a central bank current account.

      Not enough folk know that the balance in your checking account is simply a record of a ‘promise to pay’, and I wonder how far we are from ‘bail ins’, where the bank will simply take your deposits to avert disaster.

      Financial resilience should be a HUGE selling point for an independent Scotland with the promise to let banks play and gamble so long as the spivs know that the buck will stop with them. That’s the real free market.

      Liked by 3 people

      2. As ever – two problems:

        1) “I don’t think folk really understand how” …

        2) However, those who currently do fully understand – will use every thing they can think of to stop the entry of an alternative into the world of money they currently control.

        The Central Bank current account is inherent in what I am working on.

        Why should those on low pensions, on universal credit etc etc – ever be lending what little they have to last them for that week or month – to commercial “for profit” entities?

        Liked by 3 people

    2. @Scott … Iain published an article from you – in reaction to which I suggested we should meet sometime. no rush, but may I simply repeat that suggestion.

      Liked by 2 people

      1. Yes Mike,
        Happy to catch up whenever. I did meet you briefly in Edinburgh to sign the indy declaration at the AUOB March. Can always catch up at a future one or separately.

        Liked by 1 person

    3. @Scott … Not sure it is apparent, but I am trying via the Declaration as an example to find ways individuals can simply express themselves but with a potential practical outcome, and one they can relatively easily understand. A Payments System falls short on the level of “popular” understanding, thus my earlier problem #1. So I have another item on my agenda which better matches the criteria I think is needed – one that breaks a mold – and which is better placed to come before the payments system – not least because it may very directly enable a better understanding of why a “not for profit” payments system could be transformative.

      Sorry – that’s a lot of words (hot air even), but designed to explain why I said, no rush. Sometime early in the new year – I will ask Iain to let you have my e-mail address and we can make arrangements – hope that is ok. And thanks – I am sure we will have a very interesting chat!

      Liked by 1 person

      1. Thanks Mike,
        Will look froward to a catch up!
        Yes, enabling a popular understating is difficult – especially when the corporate media is set up to obfuscate the truth. The popular understanding of govt deficits for example is 180 degrees off. I did a bit of work with positive money U.K. over the years. A few of us founded ‘positive money Edinburgh’ and ran workshops, talks, stalls across the central belt (both sides of indyref) to a lot of diverse groups.
        The thing I’ve learned is that it’s very tricky to pitch things just right and so you’re idea of a pre-cursor to a free payments system sounds interesting. I guess the framing around the payments system is that it is FREE, so small businesses can benefit. The side benefit of course is it’s resilience in the event of a financial crisis.
        There have been a lot of good ideas coming out from the grassroots since 2014 around the topic of money, but sadly our devolved govt doesn’t want to explore anything progressive let alone radical.

        Like

  9. I’m not sure Hunt initiated anything re: deregulation. Along with the scrapping of the banker’s bonus cap, it’s just as likely that the bankers marched into the treasury with their armies of lawyers and accountants and and, in a final act of the consolidation of their power, demanded deregulation from this terminally weak Tory government. The happy notion that governments actually possess the power to govern today, may have to be radically rethought.

    Liked by 5 people

  10. Events leading up to the financial crisis was a perfect example of bully culture and group think. I spoke to someone who noted that not one person in a senior level bank meeting had a banking qualification. They shipped in folk from retail to literally sell money.
    Tories love the free market, yet many are exempt from it. Those working in finance know that the city is more of a hybrid socialist project where profits are privatised whilst the public purse picks up the pieces when it all falls apart.

    Liked by 5 people

  12. A banking disaster may loom. Change, huge change is certainly in the air. Our economic model is no longer working. You only need to look around to see that. A declining UK economy with slumping living standards.

    But like the NHS which arise out of the disaster of the second world war, the disaster of our energy system may be ready for radical change.

    We all know of the obscenity of ultra high priced energy charges with tens of millions struggling to pay.

    But the greed of these corporates may be their downfall because as winter bills now start to land, the a tidal wave of non payment is about to beach.

    And what corporates can withstand tens of millions of non payers.

    As a result the British energy industry risks seeing suppliers collapsing on the back of so-called “bad debts” arising from consumer bills.

    Indeed, this is the conclusion according to a study by energy consultants Cornwall Insight and Complete Strategy.

    Their joint report showed on Tuesday that household energy suppliers in the UK could be exposed to as much as £1.9 billion ($2.4 billion) of debt, a significant portion of which could be unrecoverable.

    That debt could then lead to supplier failures, with the debts then being . added to consumer bills further exacerbating fuel poverty.

    All in all the UK energy supply system, or should I day the UK energy financial system could be headed for collapse before the banks.

    Deregulation and the break up of the state owned generation and supply assets into the financial labyrinth that is today the financial monster that it is could be the big driver of change.

    Power from the Glen’s for the Glen’s made so much sense all those years ago. Strategic state ownership and control of the means of generation and supply made so much sense. The fragmentation of national asset into a cartel of offshore corporates extracting eye-watering profits may be about to change.

    And maybe that is why international corporates like OVO who own many of our billers, for that is all they are, billers not generators or shippers but billers, may now be about to change.

    And it is change long overdue.

    Liked by 2 people

  13. The Banks do NOT create money. They create DEBT out of thin air.
    They are lending money they do not possess. A bank is a business like any other. At present they are all trading insolvently and nobody cares. If we all wanted our money back, now, the Brown stuff would really hit the fan!!

    Liked by 3 people

  16. Don’t know if it is just my device but I can’t get the numbered links to work. Anyone?

    Like

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