Harringay, Haringey - So Good they Spelt it Twice!
Banking Shocks
The discussion below was moved from a thread about street scams:
Clive Carter 4 hours ago
BANKS are absolutely essential to our economy and to our entire way of life.
Some got a glimpse of what would have happened had the government not stepped in to bail them out: in October 2008, we stood within 24 hours of a total freeze of the banking system.
That would have meant all plastic cards would have been worth the value of the plastic alone. Cheque books would be worth the value of the paper pages. Bank accounts would have been completely inaccessible. All bank branches and cashpoints would be shut. We would have been left only with the cash in our wallets and possibly in safes. It is and was too horrendous to think about and the price of avoiding this is that our collective futures are now mortgaged for many years.
We need banks. But is is equally clear that we need banks that are regulated under a quite different regime to the slack laissez faire regime that has existed in the Anglo-Saxon world.
The exception has been banks of Australia and New Zealand whose banks are now rated amongst the safest in the world (see slots 11 to 18 in attached file – survey of Feb-09). It is not because they are big. Even less is it because they are less greedy. It's because they're supervised properly by Regulators. (mainland Europes banks also faired better than those of the UK & US).
The next big shock to finance capitalism looks like being fall-out from Dubai and its extravagant real-estate boom, if that place goes bust.
Reply by StephenBln 3 hours ago
Yes, it's the US -UK axis that's doing badly.. as well as those countries pegged to the US Dollar, like Dubai, Saudi etc., mostly because of the deregulation set up by Reagan-Thatcher and continued by the Blair-Brown government .. The so-called Anglo-Saxon way of doing things financially is broke..
Those countries pegged to the Euro are not doing so badly ..like Denmark (ERMII) whereas Iceland (part of Denmark but not pegged) did badly.. http://en.wikipedia.org/wiki/Euro#Currencies_pegged_to_the_euro
I heard the new leader of UKIP wittering on on the today programme today about the EU's desired regulation of British Banks .. What irritated me about the interview was that the BBC allowed him to get over the three headlines he wanted.. Out of the EU, Immigration, German control of the currency .. Although the Germans really don't control it - even though the European central Bank is in Frankfurt/Main.. I really despair for the country if UKIP ever gets it's hands on the levers of power.
PS: The new ex (CON) now (UKIP) leader.
Listen to Pearson sneak in Immigration and Germany into the conversation and the Interviewer let him get away with it.. the wretched person. The BNP with a posh voice..
http://news.bbc.co.uk/today/hi/today/newsid_8383000/8383974.stm
Alec-Douglas lives again.. jolly hocky sticks ..we want orfff out of Europe
Clive Carter 4 hours ago
BANKS are absolutely essential to our economy and to our entire way of life.
Some got a glimpse of what would have happened had the government not stepped in to bail them out: in October 2008, we stood within 24 hours of a total freeze of the banking system.
That would have meant all plastic cards would have been worth the value of the plastic alone. Cheque books would be worth the value of the paper pages. Bank accounts would have been completely inaccessible. All bank branches and cashpoints would be shut. We would have been left only with the cash in our wallets and possibly in safes. It is and was too horrendous to think about and the price of avoiding this is that our collective futures are now mortgaged for many years.
We need banks. But is is equally clear that we need banks that are regulated under a quite different regime to the slack laissez faire regime that has existed in the Anglo-Saxon world.
The exception has been banks of Australia and New Zealand whose banks are now rated amongst the safest in the world (see slots 11 to 18 in attached file – survey of Feb-09). It is not because they are big. Even less is it because they are less greedy. It's because they're supervised properly by Regulators. (mainland Europes banks also faired better than those of the UK & US).
The next big shock to finance capitalism looks like being fall-out from Dubai and its extravagant real-estate boom, if that place goes bust.
Reply by StephenBln 3 hours ago
Yes, it's the US -UK axis that's doing badly.. as well as those countries pegged to the US Dollar, like Dubai, Saudi etc., mostly because of the deregulation set up by Reagan-Thatcher and continued by the Blair-Brown government .. The so-called Anglo-Saxon way of doing things financially is broke..
Those countries pegged to the Euro are not doing so badly ..like Denmark (ERMII) whereas Iceland (part of Denmark but not pegged) did badly.. http://en.wikipedia.org/wiki/Euro#Currencies_pegged_to_the_euro
I heard the new leader of UKIP wittering on on the today programme today about the EU's desired regulation of British Banks .. What irritated me about the interview was that the BBC allowed him to get over the three headlines he wanted.. Out of the EU, Immigration, German control of the currency .. Although the Germans really don't control it - even though the European central Bank is in Frankfurt/Main.. I really despair for the country if UKIP ever gets it's hands on the levers of power.
PS: The new ex (CON) now (UKIP) leader.
Listen to Pearson sneak in Immigration and Germany into the conversation and the Interviewer let him get away with it.. the wretched person. The BNP with a posh voice..
http://news.bbc.co.uk/today/hi/today/newsid_8383000/8383974.stm
Alec-Douglas lives again.. jolly hocky sticks ..we want orfff out of Europe
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Permalink Reply by james walsh on
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What do banks 'do' to earn salaries for all the staff ? If they 'do' anything and are paid a wage, surely this is enough incentive to go to work rather than paying themselves additionally with 'bonuses'. Does any other job offer more than a set wage as an incentive ? I don't mean simple pleasure of rewarding work like teachers and nurses. Bus drivers don't get bonuses.
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Permalink Reply by StephenBln on
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JW wrote: Bus drivers don't get bonuses
I'm not sure of the situation now, but when I worked for LT in the 1970s they did.. for 1/ percentage of takings on their duties.. 2/ good safety record & no accidents..
Then there was 'The one under club' - a macabre sweepstake held in the canteen each month, where you could bet 50p and pick out an underground station name out of the hat - If there was a suicide or attempted suicide at your station during that month.. you cashed in the money.. or it, excuse the pun, rolled over till the next month..
BTW Gambling was actually strictly prohibited on LT premises :o) But even the TGWU Union held sweepstakes now and then.. -
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Is that your answer ?
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That's more than one answer - it's three for the price of one-- a bonus, I would say..
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Permalink Reply by John D on
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Lots of salesmen ( cars, insurance, double glazing, estate agents ....) are on basic plus commission.
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Do they get $100,000 bonus ? do me a favour.
I'll say what i was trying to elucidate from you.
Bankers do nothing to earn all that money. You know it, i know it, so lets stop pretending they actually earn it. Again i'll remind you of the start of this thread.........
Question: whats the difference between starting a bank and robbing a bank ?
Try to focus you at the back ! -
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Permalink Reply by Clive Carter on
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Yes James, I can see that if you did away with all the banks you would certainly get rid of the bankers as well.
I continue to wonder though, what your opinion might be, of the repeal in 1999 of the (Federal) Glass-Stegall Act (1931) in the wake of the Wall Street crash, which intended to separate retail banking from investment banking?
Do you think that repeal made any contribution to the current banking mess? -
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Clive.
Did i say get rid of all the banks ? Where did i say that ? I'm constantly amazed when i post something and somebody else posts a response which has nothing whatsoever to do with what i said in my post yet pertains to do so.
Try to focus you at the back !
I don't know anything about Glass-Stegall acts. -
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James given that you're equating starting banks with robbing banks, it seems to be a small step to suggesting that starting banks is undesirable and that any banks that do exist might be better off shut. This is not unrelated to what you've suggested.
If you don't know about the Glass-Stegall Act, I think you might like to (if you want to understand why we are in a mess). I don't like to see these enormous banker bonuses any more than anyone else, but affect relatively small numbers of people and they're only a symptom of the problem. And they affect those in the merchant banking arm and capital markets, not employees on the High Street (NB Glass-Stegall).
As for "bankers do nothing to earn all that money" – most employees in most bank branches, if they are on any bonus at all, are not on $100,000 or anything like it and I'm sure they work hard.
If you want to any kind of deeper understanding, other than just make pub-talk, try reading up on the reasoning that lay behind Glass-Stegall – and how and why it came to be repealed.
On the other hand, its a lot easier just to compare starting a bank with robbing bank and rail against big bonuses (or you could throw eggs and tomatoes in the City).
Greed is something we prefer to ascribe to others. (I'm a wise investor, you take larger risks but he is downright greedy). We all have it, but it needs to be controlled. -
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I don't believe that Glass-Stegall, or its repeal, had much to do with the current crisis. The two main drivers were 1) a government policy in the US to increase home ownership through the explicit support of the agencies freddie and fannie mac. This led to brokers knowing they had someone to sell mortgages to and therefore had no drive to check credit worthiness etc. 2) US expansion of trading deficit with China which allowed interest rates to stay artificially low, again fuelling lending.
The focus on bankers pay and indeed private equity and hedge funds is nothing more than a desire to find some bogeymen in this, generally politicians who want to divert blame from their poor policy decisions. If, as private institutions, they wish to pay their employees this way then so be it, what I do agree with is that they need to make relevant payments ascribed to their riskiness and size to offset the relative size of their reliance on the government (or BoE) as the lender of last resort. The rest is just the politicians pandering to the voters.
Glass-Stegall, which as Clive says separated merchant banks from clearing banks in the US could be said to have little to do with the crisis as when you look at the failed institutions (Northern Rock, RBS, LBG, Fortis, AIG, Lehmans etc) there is failure across the board, not just those institutions which mixed their banking approach.
And to answer James' question, one is illegal, one is not. -
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Clive, Listen carefully.
The difference between bank robbers is: Bank robbers have an historical tradition of helping poor folk whereas bankers have a traditional history of robbing poor folk.
Clive, you refer to my comments as 'pub talk. Isn't 'pub talk' a central pillar of sociopolitical discussion. Pubs more than anywhere else are where our (UK) history has been planned and played out over perhaps hundreds of years. Why do you disparage 'pub talk' ?
Ordinary folk know the difference between when it is raining and when somebody is peeing on their leg. -
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