11 Apr 2011
Independent Commission on Banking report means more debt and cuts
Mervyn King in a devastating speech argued that British banks are too big to fail.
If a bank collapses like dominoes it knocks over the banking system and crashs the economy.
Because they know this banks have a hidden subsidy, they can afford to take risks because if it all goes tits up, the government has to bail them out.
The bank bailout is part of the reason why we have a fast appraoching £1 trillion debt.
Sadly today's report does not advocate radical action.
Banks need to be run democratically for the community, after all we are paying for them.
By suggesting they act nice, getting Lloyds to sell a few branches and keeping the risky gambling finance bit linked with retail banking...if implemented, while pleasing merchant bank fans like Boris Johnson, Clegg and Cameron, it does not solve the problem.
The idea of a 'firewall' is not going to lead to real seperation, highly esoteric forms of gambling via credit default swops etc, are still going to be popular....no firewall is truly going to insulate one part of a bank from another or our economic system from bank collapses.
At present old people homes are closing, rail fares going up, university students being asked to pay £9,000 a year....close a school to pay for a banker's bonus could be the slogan of the Con Dem Party in this years local elections.
You can see why people riot, voting Lib Dem certainly just brings more misery, despite the noises made by Vince Cable.
Its no real solution but hopefully people will shut their bank accounts and move to the Coop.