Vote Now to Counter Dangerous Finance

Following hard on the heels of the bankers' bonus cap the European Green Group are proposing further action to control the damage that the financial sector can do to the European economy. Sven Giegold, a Green MEP from Germany and member of the EU Commitee on Economic and Monetary Affairs has launched a public poll to identify the riskiest financial product, as a preliminary to a campaign to have it banned.

The proposals that have been suggested by citizens from across Europe give a glimpse of the socially destructive nature of modern banking. Many are complex forms of derivative, where the value to the 'investor' depends on one or more highly unpredictable events: such products are nothing more than gambling and should have no place in a properly regulated banking system. Others include vulture funds, where finance companies seek to profit from countries that have had to default on unpayable debts, or payday loans that charge punitive interest rates and force those on low incomes into debt. In the European context some of the most dangerous activities of banks have been to encourage EU citizens to take out mortgages in foreign currencies; as exchange rates have varied they have found the repayments impossible to pay and have lost their homes.

This is not simply a poll. Since its establishment in 2011 the European Supervisory Authorities with responsibility for banks, investments and insurance products has the power to prohibit products that threaten the vitality of the European economy or society. This power has already been used to ban naked short-selling but the Greens are now increasing pressure to have the powers used more widely. Once we have chosen the most dangerous product a campaign will begin to lobby for this regulation to be used to protect us from one aspect of financial degradation.

The financial products chosen offer a number of risks. Some threaten the integrity of the financial system by introducing high-level and large-scale risk to the banking sector. Others, such as those facilitating in land and food prices,  destroy the  livelihoods of the poorest people in the world. Use your opportunity to fight back against the socially destructive finance industry by voting in the European Green Group ballot - and learn something about the appalling behaviour of the finance sector along the way. Voting remains open until 14 March
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Not Waiving but Drowning

'There's not much to a bank except its licence, its computer system and its reputation.' Thus spake Martin Taylor on this morning's Today programme, the same programme that, with its recent behaviour as lackey of the elites, invited Bob Diamond to give its inaugural lecture in 2011. A member of the 'independent' commission on banking, Martin Taylor was Chief Executive of Barclays between 1994 and 1998. The extraordinary breakdown of retail banking services at RBS and its subsidiaries this week - the result, it appears, of offshoring vital services to under-qualified and under-priced programmers who could not be properly monitored - has seriously eroded confidence in one of those pillars. The fraud revealed by the IFS yesterday further undermines the reputation of Barclays, with other banks set to follow the same route to opporobrium. It only remains for the government to take from Barclays the licence of which bank executives have proved themselves utterly unworthy.

Although the Barclays scandal has pushed the Eurozone crisis off the front pages this morning, the two are intimately related. As the previous post on this blog indicated, the sovereign debt crises have also arisen as a result of banks bidding up the rates of interest paid by nations on the money they borrow from those banks, increasing bank profits while bankrupting countries and destroying their societies. As in their mainpulation of the LIBOR rate they have controlled what is supposed to be a free market to benefit their narrow interests, and the whole economy and wider society have suffered as a result.

What has not been mentioned in this recent round of scandals is that, in a capitalist economy, the banks' most important function is to provide the liquidity that brings into play the factors of production that enable economies to be productive. For years, our banks have failed to do that effectively, preferring to suck money out of productive sectors and local economies to feed it into speculative circuits and lucrative rewards to bank employees.

This situation has gone beyond discussion about regulation, of whatever degree of touch, and into the realms of serious political action. The government already holds controlling stakes in RBS and Lloyds on behalf of the citizenry. The withdrawal of Barclays' banking licence would leave the vast majority of UK banking in public hands. The government therefore has the active power to operate a proportion as public interest banking, keeping the value of money creation to invest in public projects, while the remainder are broken up and made available to be operated as a system of locally based community banks.

Please sign the e-petition calling on the government to withdraw Barclays banking licence.
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Turner Turns Again

In between the story of the sweet child being reunited with his family in Pakistan and episode 37 of the media's latest favourite soap The Ashcroft Files you will have been forgiven for missing something rather important that happened yesterday. I've already referred to Adair Turner as 'crumpet', but my feeling for him grows warmer by the day.

First he broke ranks with the ranks of capitalist pigs by supporting the Tobin Tax, before questioning the social value of much of what happens in the Square Mile. Yesterday's intervention in the unaccountably muted debate about the structural problems of global capitalism and how to resolve them was different in kind. Lord Turner, former head of the CBI and therefore advocate on behalf of the business sector, suggested greater political control over the economy.

The specific policy suggestion that caught my eye was that the government should return to managing credit for the public good, but he has other policies that are clearly directed towards reversing the disastrous and amoral licence which has been enjoyed by the finance sector since Big Bang in 1986. The Turner Review is a regulatory review, that is to say it explores the relationship between private finance businesses and the political authorities. And the man who once argued for the interests of the private sector is now calling for more intervention by government.

It was quite a shock for me, reading a report from what I confidently consider to the opposition, and find in it many of the proposals I have myself been calling for. It would be nice to think that Lord Turner had seen the errors of his ways, or experienced some kind of moral conversion. Much more likely is that, just as Thatcher became converted to environmentalism to make sure she could control that debate, the interests of capital realise that an adaptation is necessary. And if they are beginning to support a change as radical as allowing even a modicum of political control over the worst excesses of the casino economy, we can assume that the the globalist capitalist system is much more vulnerable than it portrays itself to be. Tweet