Thursday, 12 February 2009

What to do about the banks

What to do about the banks? I was listening to Gordon Brown saying we all held shares and that they would recover their value and we'd all be quids-in. I'm not sure that returning to the situation that led to the credit bubble would be that clever.
I'm not alone in noticing the number of people calling for Capt Mannering style bank managers and this does under score an important point, namely that there are two types of banking that have got mixed up. In the first instance there is the 'utility banking' that most of us and businesses need. Secondly there is the merchant/investment banking which is high risk venture capitalism stuff.
Vince Cable who has been writing and talking about banking reform well before this crisis has suggested that having effectively nationalised the banks that a mutual model of ownership could replace the ownership by share capital. I am attracted to this idea as it would seem to anchor the banks in service to their members rather than in the pursuit of shareholder profit and bonuses.
There is a whole range of other issues which need to be tackled around regulation. All those who heard the Tories baying for less regulation and listening to the stick they handed out to Vince for daring to suggest that the credit bubble was about to burst. (In fact the Tories were so badly behaved had our own dear Mrs Parry observed their behavior I'm sure she would have reported them to the standards board and they would have instantly reformed)

A number of people have drawn my attention to this posting and asked me what on earth it means?
Of course we all know that this situation is not all down to "glorified spivs in the city" but many factors not least of all a Government that did not save for a rainy day and when hit by a global recession were not prepared for it , now a recognised point of fact. Strong measures have to be introduced that will be supportive of local businesses, and that is not being done at this time. There are 7524 premises in Sefton who currently pay business rates with the average bill in 2008-2009 £7950 raising a total of £59.8 million a year in tax which is handed over to Whitehall. It is not only our businesses that need help but also our elderly and many others in our community but as in the past we will unite and beat these hard times but urgent help is needed to give added support and this is not happening. The good news of a cash injection into Pontins in Ainsdale is welcomed and will eventually have a positive effect on Southport and our tourism trade, as well as providing additional local jobs for local people, but help is needed now and this Government is not delivering. Those of us in a position to lobby for change must do so with some urgency.


Interestingly one thing it does reveal is that the author fails to understand that the failure in government regulation was a key component in this crisis. Now remind who was it who wanted less regulation and didn't think the credit explosion was a problem?