I left my house to a breakfast meeting this morning - before heading to Hayward (see below) - with a spring in my step on hearing the news, just breaking, that Bob Diamond had quit as chief executive of Barclays. Is it wrong to hope that a criminal conviction for fraud will follow?
And at lunchtime, his right hand man followed him. There's a need for clear-out at the top of a lot of the financial institutions that took the world to the brink five years ago and whose reckless actions have thrown millions into poverty and uncertainty.
It isn't just the criminal fixing of the Libor - a little known but crucial financial instrument - nor the miss-selling of payment protection or small business insurance, nor even the iniquitous bonuses these guys pay themselves. What is truly reprehensible about these investment banks is their role in jacking up commodity prices and throwing millions into food insecurity and worse just so they can enjoy another bottle of bolly.
There needs to be a root and branch enquiry into all this followed by wholesale reform. It needs to look at how these banks operate and how the regulators - both central bankers and politician - fell asleep as they lined their own pockets. It will be painful for politicians all the way back to Thatcher and her cabinet. It will be especially painful for New Labour and the present shadow cabinet. But without it, we will never lance the boil and clean the wound at the heart of our financial system and so never move out of the current recession.
"Is it wrong to hope that a criminal conviction for fraud will follow?"
I hope there will be a trial first.
"But without it, we will never lance the boil and clean the wound at the heart of our financial system and so never move out of the current recession. "
The only problem is that the recession was not caused by investment banking but retail banking over lending. Northern Rock, Bradleys & Bingleys etc did not have any investment banking. Reform of investment banking is needed
but it will not help with the vast quantities of private and public debt in the UK.
"What is truly reprehensible about these investment banks is their role in jacking up commodity prices and throwing millions into food insecurity "
Speculators reduce food insecurity not increase it.
"What would we like to happen? Should prices stay stable? We would all carry on using the amount of corn that we originally thought we'd get. And we'd run out – there may even be a famine. People tend to die in famines.
So what we'd actually like to happen is for people to prepare by consuming a bit less corn this year.
Put up the price and people will use less, while suppliers will make more. And what is it that the speculators on the futures markets have done in response to this report of drought? They have raised prices."
"It will be painful for politicians all the way back to Thatcher and her cabinet. "
Thatcher did many bad things, she didn't reform the benefit system, she introduced the poll tax, she did not react strongly enough to the events of 14th Feb 1989 - but she not create the FSA. That like so many bad things in the UK and abroad was done by Blair/Brown.
And yet we can't help thinking that greed is exhibited more in what we do with our wealth (how we spend it) rather than with how much we earn
Very few people are satisfied with their lot. I remember Bob Mumford saying that he had found a cure for avarice. "Lord, I really covet that man's car, but give him something better!"
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