Only a global revamp of the banking system can steer us away from a second financial crash and rebuild confidence, writes Joyce McMillan
IT is just eight days since the little video clip first appeared on the internet, but in that time it must have been viewed by perhaps 100,000 people worldwide, most of them – I’m prepared to bet – roaring their approval. It shows Channel 4 News’s outspoken economics editor, Paul Mason, delivering what might loosely be called an opinion piece from the pavement outside the Royal Bank of Scotland in Bishopsgate, London, on the occasion of the latest report into deliberate rate-fixing on the foreign exchange trading floors of RBS and four other banks.
And what Mason is saying, in this brief piece to camera, is that after six years of revelations of this kind, he is mad as hell, and not inclined to take it any more. He points out that, despite a clear e-mail record revealing deliberate conspiracy to deceive, there is once again no question of any individual facing criminal charges. The front page of the website of the Serious Fraud Office makes interesting reading, in relation to these events; in its first paragraph, it makes it clear that fraud is a “general criminal offence”, involving the “abuse of position, or false representation … for personal gain”.
Yet despite the fact no-one has denied that activities of this type were taking place in major UK banks, the sanctions being discussed are feeble enough to make the average man or woman in the street wonder – with Paul Mason – what planet those in charge of this industry are living on. We live in a society, let’s remember, where people are having their state benefits “sanctioned” – that is, in many cases, their entire income removed – for tiny technical breaches of complex claimant rules laid down by the private companies who now administer the benefits system, and where those who steal food, under these circumstances, are often sent to prison for weeks, over thefts to the value of perhaps £50.
CONNECT WITH THE SCOTSMAN
• Subscribe to our daily newsletter (requires registration) and get the latest news, sport and business headlines delivered to your inbox every morning
Yet faced with the activities of men – they are almost all men – who have been skimming millions from the funds of their clients, in order to help win huge personal fortunes for themselves, we talk not of imprisonment, or of seizure of their assets, or even of public trial, but of a new European Union measure – hotly contested by the UK government in the European court this week – that would reduce the size of the bonuses they receive on top of their already colossal salaries. We are supposed to applaud the outspoken radicalism of the present Governor of the Bank of England, Mark Carney, when he suggests – as he did this week – that bankers engaged in wrongdoing should have their salaries docked a bit, as well as losing their bonuses.
And as if the pathetic scale of these penalties was not enough, we are then told that we have to pay, as consumers and borrowers, for the pointless fines imposed on these businesses by their regulators, and that if we dare to vote for any government that plans to regulate this sector more strictly, then all the dazzlingly talented people who work in it will flee the country, leaving the UK without its largest single industry.
Now it may appear, from the vantage-point of the boardrooms and dining rooms where the leaders of the banking industry meet government ministers, that these arguments make some kind of sense. Yet in terms of what used to be called political economy, it is becoming increasingly obvious to any objective observer – including, possibly, Mr Carney – that the present system is unsustainable. Complete impunity for the powerful, in the face of wrongdoing that damages the lives of millions, is the kind of abuse that over a few decades can bring a civilisation to its knees. The basic structures of the financial system that led to the crash – including the unlimited power of banks and other lenders to create huge financial bubbles in the form of credit – remain unchanged. And public scepticism about the probity and competence of our financial system has reached levels that must make it highly vulnerable to any further collapse of confidence.
Behind all of this, of course, lies a series of false assumptions about human motivation and character closely linked to the neoliberal consensus of the past 35 years. Leave the confines of a City trading floor, walk into any shop or café or hospital or school or arts venue, and in these places you will find millions upon millions of ordinary British people deploying levels of imagination, creativity, skill and commitment that the RBS executives of this world can evidently barely imagine, and doing so not because they think they will earn enough to buy a Botox-enhanced partner and an ugly Porsche, but because they care about their work and want to live lives that are meaningful to them, while earning enough to live with some decency and security.
In a society made up of millions of such people, the banking industry’s talk of the great “talent” of those on their trading floors is, therefore, as delusional as it is insulting.
And what we need now – in the aftermath of the 2008 crash – is not more of that same deference to a class of number-crunchers who, to judge by their actions, are as morally inadequate as they are imaginatively impoverished, but something like a revamp of the global financial system on the scale of the post-war Bretton Woods conference, designed to bring money supply back under the reasonable control of governments, and to refound a banking system which understands that, in order to be worthy of the world’s confidence, it must seek to balance the demands of the market with those of society, and the law.
And as Paul Mason hinted in his roadside rant, we will not achieve that by listening to more special pleading from the chaps in gold cuff-links who brought us to this point. We need a new generation of politicians who understand that these men have already crashed the global system once, at vast cost to the taxpayer, and are now leading us nowhere, except towards a possible second crash; politicians who have the courage to take on those vested interests, to redesign the system, to fight for new and more sustainable times, and to win.
SCOTSMAN TABLET AND IPHONE APPS