Change your bank

Dan Roberts in a recent Guardian article talks about the further bail out of the banks. Incredibly, they’re now getting even more public money than the “crisis” last year. Even more incredible when big bonuses had just been announced – though the government has tried to secure some meagre restrictions on these.

According to Dan, the whole thing has been a big mess, designed to save the government’s face:

Had the government had the courage to bite the bullet last autumn and admit that both banks were, in effect, fully nationalised, it is possible to envisage an alternative scenario. The improved trading conditions would have fed directly through to increased value for taxpayers (rather than leaking out to other investors). We would have avoided hundreds of millions in fees to the advisers who dreamt up all these convoluted schemes. And it would still have been possible to consider privatisating them both (ideally in smaller bits),l when conditions improved.Unfortunately, this would have flown in the face of Treasury orthodoxy that insists the stockmarket is the only judge of long-term value and reliable source of capital. Neither seem to be case at the moment, and instead, the taxpayer is paying a high price to preserve the fiction that British banking is back on its own two feet.

But the government’s solution won’t solve everything. There are still other banks that aren’t affected and are still paying out huge bonuses with a cavalier attitude, regardless of the what their customers think. The whole system needs a shake. And we are the ones to do it.

Tweet This Post

Tags: bail out, bonuses, Dan Roberts, Guardian, Lloyds TSB, RBS