Saturday, 16 January 2010

If The Banks Are "Too Big To Fail" It's Time To Make Them Smaller!

When the banks were bailed out we were informed that the reason was that they were too big to fail. Now that the bailout has occurred and the banks have shown little/no remorse for failing so spectacularly as businesses and having threatened our money, why hasn't anyone moved to break them up? Surely their continued existence as economic behemoths is a risk to our economy and to our individual well beings?

Of course, the indomitable Vince Cable of the Liberal Democrats has come forward to call for some Government action:

"This is yet more proof that Labour's badly designed bonus tax is having no effect on bonus payouts" said Vince Cable, Liberal Democrat Shadow Chancellor, commenting on evidence given to the Treasury Select Committee today by the Chief Executives of RBS and Lloyds.

"Bankers tell us that their bonuses are a reward for their skills and ingenuity.

"At the moment, this seems to involve borrowing taxpayers' money at half a percent from the Bank of England and then lending it back to us at eight, 10 or even 20 percent.

"It's hard to find the skill in that and even harder to see how bankers feel that they have a right to collect bonuses for it.

"This is yet more proof that Labour's badly designed bonus tax is having no effect on bonus payouts.

"The best way to deal with bonuses and achieve a fair deal for the taxpayer, who guarantee these institutions, is to split the banks up. Before this is done an additional 10% levy on their profits should be introduced.

"This is a much more effective solution than a one-off windfall tax and recognises the debt that the banks owe to the taxpayer."

But perhaps there is a more direct and effective way of doing this; is it time we moved our money?

Bill Maher suggests so in a Huffington Post article (via rickydee1955). Which has gotten me thinking... perhaps it is time we started putting our money into local banks and credit unions. Not only will this help split up the banks and hopefully create a proper economy (i.e. where some businesses DO fail) but it will also benefit local people and give the customer more say in the workings of the business that is looking after their money.

Break the banks, join a credit union!

Further Reading

The Storm: The World Economic Crisis and What it Means - Vince Cable (UK Amazon, US Amazon)

When You Ride Alone You Ride with Bin Laden - Bill Maher (UK Amazon, US Amazon)

If you feel benevolent and particularly generous, this writer always appreciates things bought for him from his wishlist

1 comment:

Anonymous said...

Amen to that. Nothing should be too big to fail. Even the government.