IT’S OFFICIAL. The experts who guided the global economy were flying blind. They failed to see the financial crisis coming because “The macroeconomic models available at the time of the crisis typically ignored the banking system”. The confession – a case of what lawyers call “wilful blindness” – appears on page 10 of the OECD’s […]
Archive | Banking
Why We Bash the Bankers
Sir Mervyn King, Governor of the Bank of England, wants us to stop demonising bankers. But what would be the consequences if people could not vent their frustrations on a few scapegoats? Bankers have served as one of the social system’s safety valves. Communities have been wrecked and lives destroyed by the Depression of 2010, […]
We’re All Taken for a Ride
Heaven forbid that I should excuse bankers who corruptly exploited the property boom, but let’s get the whole bizarre story in perspective. Bailing-out the banks is no different from bailing-out the people who are excluded from their rightful access to employment. Such bail-outs are the price that our pathological culture – the one we inherited […]
Rogues or Rotten System?
Have you noticed how Hollywood protects the villains? Whether the narrative is about 19th century cowboys, 20th century Cold War spies or 21st century virtual time travellers, the deviants are always singled out as lone rogues. By killing them off, the system is cathartically cleansed. But what if that behaviour was symptomatic of a deviant […]
Banks & bonds: the Rip-Off
Germany is being urged to support the creation of Eurobonds in the next futile phase of propping-up the eurozone. The Eurobond plan is yet another exercise in self-deception. It would shift a greater financial burden on Germany without solving the flawed foundations of the single currency. The rip-off began after the 2008 credit crunch. Banks […]
Beware the Rules of the Game
If a bookmaker decided he wanted to buy a savings bank and use the deposits of customers to gamble on horse racing or the performance of Indian cricketers at Lord’s, what would government do? It would outlaw such a “commercial” venture. But governments in Europe and the US allowed this to happen with the Big […]
A Depression, After All!
It’s taken central bankers four years, but they have finally conceded that the western economy is locked into a depression, not a recession. What they have yet to admit is that their policies will protract the crisis. The rest of us need to prepare for a drawn-out trauma with no end in sight. Ben Bernanke, […]
Buck-passing and the Bankers
Politicians who were responsible for the financial crisis that struck in 2008 have executed a successful campaign to shift responsibility on to “greedy” bankers. By focusing reforms on the financial sector they divert attention away from the way we are governed. This ensures that the next property cycle will terminate in 2026, with an almighty […]
Back to the Bad Old Days
When banks make losses, they are free to deduct the losses from future profits to reduce tax paid into the public purse. Banks are using this right to boost profits – and bonus pay-outs – at the expense of taxpayers who bailed them out. When employees lose their jobs because of bank-funded land speculation, they […]
Forecasting the Future – Again
You would think he knows what he’s talking about. Charlie Bean, after all, is Deputy Governor of the Bank of England. In fact, he doesn’t. So why has he informed the Royal Statistical Society that it was not possible to forecast recession? Answer: because he wants to exonerate the Bank and persuade us that the […]