Banks are the only firms on high streets still consistently causing queues. Why are they continuing to operate short hours while other businesses are opening as normal? And why do they close on Saturdays and insist on cutting their high street presence even further, against huge public opposition?
A little over a decade ago, their scandalous activities drove the world almost to the point of meltdown, yet they have shown no contrition nor gratitude for what the taxpayer did for them nor rendered up any guilty scalps. And notice, please, how no Royal Commission was ever put to work to investigate that most monumental of scandals. Today, in this world of COVID, the banks continue on their merry way.
As a shopkeeper, I need change. I had to wait twenty minutes on my high street to gain entry yesterday and only one out of four counters was operational.
Part of the problem is that Brits are too polite. We stand in quiet acquiescence to the nonsense the banks are subjecting us to. It is not in our nature to make a fuss. Politicians will not come to our rescue because too many of them look to the banks for lucrative jobs when their days at Westminster are over.
One big mistake was not to let a couple of the big banks go down the Swanee as the US did with Lehman Bros. Considering banks ‘too big to fail’ made cowards of us. Now we must force them to accept their social responsibilities. Easy access to money should be a start and right. Abandonments of dreams to make us a cashless, at least for the foreseeable future, should be another. A little humility would also help.
Banks are not to be trusted. That is the shocking message the Troika of the European Central Bank, the EU and the IMF have sent out when they seized up to 60 per cent of the deposits of their wealthier customers in tiny Cyprus.
Governments have attempted to get themselves out of holes in years past by raising money in all sorts of unlikely places, some of them truly bizarre. But never, until now, had they felt themselves entitled to raid peoples’ bank accounts and plunder them. That island state of 1.2m people may only represent 0.02% of Euroland’s GDP, but the action of its powerful masters to curb Cypriot excesses has sent shock waves not just across Europe, but the entire world. The reason is simple: if you can’t lodge your money in a bank account without feeling that it is safe, where on earth can you put it? Under the bed, perhaps, or in a biscuit tin? For all the derisory interest savings have attracted in recent years, that might not seem such a bad idea. The trouble is that almost no one has a pay packet anymore – it has to go straight into the bank – and we have allowed ourselves to be seduced by the convenience of the hole in the wall that we can no longer contemplate anything else.
What has happened to Cyprus, however, should make all of us take stock. It has breached what hitherto has been held as a sacred principal: that you cannot help yourself to something which has been placed in your safekeeping.
People have believed that in an uncertain world their humble bank deposit was at least safe from predators. Just the same, what is to be done with a bank which has got itself into a mess? Is it fair that people – i.e. taxpayers – who did not even sign up to that bank should be compelled to ride to its rescue? Those taxpayers are even more innocent (if you want to use that emotive term) than the lowly deposit holders who did sign up.
What is clear is that we can never again allow ourselves to be held to ransom as we were with the 2008 rescue of British Banks. We have suffered as a result of that rescue for coming on five years now and there is no end in sight to the misery that it has inflicted. High Street banks – the ones we need most to trust implicitly – must be ring fenced against the sometimes crazy risk takers in their investment arms.
In view of the banking industry’s unique capacity to bring the whole system down – even discrediting capitalism itself – they must all be closely monitored. Had this been done it is arguable the catastrophe which has overwhelmed us could have been avoided, or at least mitigated. In addition to all this we must enact laws that permit us to send bankers to jail, where reckless conduct and dodgy practices puts all our livelihoods at risk. Amazingly, there was no law in place that could hold ‘Fred the Shred’, to account: he broke no laws. This must change.
What really sticks in the public craw is that not a single banker is behind bars. Even members of the political class including peers, have ended up sporting prison blue. Their crimes, by comparison with the enormity of what the bankers did and are still doing, is of no consequence. Soon, no doubt, those numbers will be swelled by overzealous newspaper hacks and policemen who have had the temerity to keep them in the picture, even where no money has changed hands. Everybody – ministers included – it seems, can be jailed except ‘fat cat’ bankers. But even before consideration is given to criminalising certain banking activities, the Libor manipulation was an actionable crime. Why then is there no move to bring those fraudsters to justice? Their scams involved tens of billions of pounds worldwide. That question is doubtless answered by recently released figures which showed that access to Downing Street by bankers was of an order of ten times greater than that of anyone else – captains of industry and their like. Meantime the bonus culture continues on its lucrative way rubbing salt into our wounds and insulting us. These ‘gentlemen’ really are laughing all the way to the bank.
It has to be said that the Germans were unfairly treated by the hot-headed Greek Cypriots when they lampooned them as Nazis. The Germans had not wished for deposits to be seized from small depositors: that was a decision by their own Cypriot ruling class. They were fearful of upsetting all that hot money – much of it illegally acquired in Russia and stashed in Cypriot banks. It now seems that a benchmark has been set that only big investors and that, regrettably – since not all are crooks – is how it should be. If you have big holdings you should have the sense to see that when banks are offering returns out of kilter with banks generally there is likely to be a catch somewhere. If still you are prepared to take that risk, then so be it. You cannot look to others to save you from your own folly. Also you should not expect careful Fritz, who does pay his taxes and beavers away in a cold climate, along with other diligent north Europeans, to bail you out. At least the so called PIGS (Portugal, Italy, Greece and Spain) have the inestimable luxury and consolation of making a living under the Mediterranean sun. It tells you everything you need to know – that whereas Germans over the last two decades have voted themselves a 20% pay rise, the French have voted 90%.
Apart from anything else it was an affront to north European taxpayers that they should be expected to protect the ill-gotten gains of Russian oligarchs and the like and that a Euro country was being used to launder money. But you could say much the same about Luxembourg except that with more rigorous stewardship its banks have not gone belly up.
As for the future of the Euro itself, on which our own recovery is so heavily dependent, the storm clouds refuse to go away. This is because of the disparities between the economies of the north and south and the huge differences in competitiveness between them. It is so great that it has built up debt levels in the Club Med countries that are unsustainable. My belief is that the Euro will survive, but the weaker members, which never qualified for entry in the first place, will be let go. If only those rules of entry had been applied, so much of the pain currently being felt could have been avoided. But, as is so often the case, politics triumphed over sound money and we are all left with the consequences.