Friday, March 26, 2010

Angela Knight asks for a grown-up debate on banks

Over on the Public Finance site, the spokeswoman for the banking industry, Angela Knight, has a piece calling for a grown-up debate about what to do next

My comment:
So what is the bottom line, Angela? Business As Usual, with a little more capital adequacy? Stagger on trying to reduce the burden of debt, (13% of which is down to bailing you guys out of the mire) until the next recession or bank crash, which will rachet up even more public debt (owed to - guess who - the banks)?

Sorry, we the people do not buy this line. Banks do indeed provide a service to the real economy, but many radical reforms of banking are needed, all of which you will oppose.

First off, we need a firewall between the core lending and deposit function of banks and casino banking. After this, we have a range of other reforms on the table, notably the Transaction Tax.

Finally, there are the Great Questions to be answered: why should private banking corporations have a monopoly on the creation of money? Why is profit the sole criterion for making loans? Why should the saving of energy not be a criterion, and the creation of technology that exploits a zero cost fuel, not be a criterion also.

Domestic energy saving takes people out of fuel poverty, and helps to close the rich-poor gap - the RPG that is aimed to destroy social cohesion. Exploitation of renewable energy provides energy security for our own and succeeding generations.

Bankers need to move the focus of their attention from exclusive study of balance sheets and begin to look at the real world.

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