Blog 2023 Malcolm Blair-Robinson

It has taken a very long time and a very distinguished Commission to arrive at the same conclusion as a great many did months ago. I wrote about it in my book in 2009 and have been blogging about it ever since. Although we still have to wait until September for the official report, Sir John Vickers, Chairman of the ICB, made it as clear as a bell yesterday, in which direction his and his colleagues’  thoughts, were going.  The present arrangements for banks are, according to the Governor of the Bank of England, the worst of all available options. They are also utterly destructive of a sound and socially enlightened economy.

Up to the crash, the banks gambled vast sums of electronic money on wild bets, unsecured by any asset capable of realising the cash pledged because no such cash existed, while at the same time lending without regard to prudence, sums which customers could not afford to repay, thus hyper inflating the value of property to enable them to lend more and more. All of this was done not with hard cash, but on money the banks had themselves borrowed beyond all levels that any previous generation of financial mangers would have thought other than stark, staring, mad. Add to this they parcelled up mortgages on these hyper inflated properties owned by customers without hope of repaying, and sold these fraudulent and worthless securities to any patsy willing, which included each other.

Having drained the pockets of ordinary people who wanted only to house their families in decency, they suddenly discoverd they had run out even their own funny money because the countries of the middle and far east, having scooped up between them 90% of the total foreign currency reserves of the world, decided to break for tea. The resulting global crash, a phenomenon brought about entirely because bankers, who had been behaving like drunks in a casino, had destroyed the economic model upon which all the economies of the West to some extend depended, but in no country more so, than in no more boom and bust New Labour Britain. Then to add insult to injury, they ran to the very people they had been milking for years, the taxpayers, and demanded rescue from terrified politicians who mortgaged generations to come in order to prop up a system which would have been the envy of Al Capone.

Well, all this is coming to an end. The voices of sanity grow louder. Mathematicians have arrived. The people have discovered what has been done to them.  Ministers now fear the wrath of the people more than the threats from the bankers. Only the Tory party hesitates, not least because its most avowed members are the bankers. Thus the Lib Dems now approach their hour of glory. If in the autumn Osborne and Cameron hesitate to act upon the recommendations of th IBC against their own and dear, the Lib Dems will bring down the coalition. When the inevitable election comes the Tories will be wiped out on a 1997 scale and beyond. So the Tories will have a choice between suicide and capture. Such will be the pressure from the public, they will choose capture. Capture by the Lib Dems, without whom, if the AV voting system is adopted, they will never again be able to form a government. The prize of demanding reform of the banks for the Lib Dems will be as big electorally as their outright and principled opposition to the Iraq war. Indeed, Chilcot reporting later in the year will bring that to the fore, so both will be in play.

No wonder Nick Clegg was full of himself on the Andrew Marr show this morning.

This entry was posted on Sunday, January 23rd, 2011 at 3:41 pm and is filed under Malcolm Blair Robinson. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.