Bring them to Book (2008) – Who’s Won (2013)?
More than 100 million people were thrust into poverty by the Global Financial Crisis (GFC) of 2007/8 according to a London barrister who blew the whistle on dodgy banking practices that preceded the failure of a major UK bank and, given the correlation between poverty and death, this likely amounted to a killing field.
Paul Moore, the lawyer concerned, was sacked in 2004 from his job as Head of Group Regulatory Risk at Halifax Bank of Scotland after raising concerns about excessive risk taking. He goes on: “The mortality statistics of people who go into poverty rise hugely for a whole range of reasons so the banking crisis isn’t just about becoming poorer, it was about killing people as well”.
And this week as they sought to show a commitment to prevent another GFC, EU Finance Ministers finally agreed a deal they claimed would reduce the taxpayers burden in future. However in doing so they tacitly admitted that major bank failures due to the GFC remain on the cards. In terms of the deal European banks, their investors and depositors will be required to cover at least 8% of potential losses before governments step in with aid, Der Speigel said. Finance Ministers agreed to a deal that would require owners, creditors and depositors — in that order — to cover the expenses of bailing out or winding down failed banks the magazine added. Trouble is the deal only comes into effect in 2018 and its anything but clear that there won’t be more bank failures or indeed a Euroland collapse before then. Furthermore the decision does nothing to reassure bank account holders who should be aware their deposits no matter how small, are bank property and subject to forfeit in any collapse irrespective of EU-wide government guarantees. (See here: “…money paid in by a customer amounts to a loan to the bank. That money is not held in trust or ‘earmarked’ for the customer: the money becomes the property of the bank, which it can use for its own purposes...)
The London-based Financial Times reporting on the EuroFinMin deal noted that European taxpayers had sunk an horrendous €1,600 billion of their cash into banks since 2008. For the French take on the agreement read here: La Tribune piece.
The deal had been preceded by a little reported speech by Mario Draghi, the former Goldman Sachs banker who chairs the ECB-European Central Bank. “Banking Union”, he told French parliamentarians, “is not the only example of where closer union is needed. Ultimately, the euro area needs to be drawing closer in all fields of economic policy… a true economic union means transferring some sovereignty over decision-making to the European level – accepting decisions that are made for the good of the euro area as a whole, even if, at that moment in time, individual countries may disagree with them.” This as it turns out was in sharp contrast to an apparent change of heart by his erstwhile paymaster, Germany’s chancellor Angela Merkel, who reportedly has now become a eurosceptic. “Just one year ago, the German chancellor was calling for ‘more Europe, not less’. But now she has completed a radical about-face. At a party summit in the Vienna Kursalon concert hall Merkel showed that she had transformed herself into a EU-skeptic. Her conservative colleagues were left with the impression that the German chancellor now believes that there is too much Europe,” reports Der Speigel.
Lawyer Paul Moore, formerly with a large civil set of London barristers, has called for a total revamp of the financial sector and the prosecution of reckless bankers. For while the City of London in tandem with Wall Street became the largest financial market place and hence banking honey pot in the world in the near four decades before the latest series of bubbles burst, banks remain bad, bust and unreformed elsewhere in Europe. Nowhere more so than in France where back in 2008 former president Nicolas Sarkozy called for the bankers behind the destruction of the global economy to be brought to account and punished. This short trailer includes the very firm assertions the then president made about hunting down those responsible (watch him during a Toulon rally).
However the gap between good intentions and effective outcomes remains as always where politicians are concerned, a chasm. As this hour-long video recently screened by France 3 for its 100th edition of the series Pieces a conviction shows, in France at least, the banking lobby appears to have won the fight to avoid the blame or to make any significant changes while earlier demands for punishment have been so muted as to be virtually silenced.
(The video above is captioned in French and automatic caption translation is available. Hover your mouse over the captions button, fifth from right at the bottom of the screen, switch on French captions then from the drop-down menu, select the language of choice.)
All it took it would seem, was for the big banks to point out – as they do through the voice of Finance Minister Pierre Moscovici in the film above – that 400,000 jobs in France depend on the financial industry for all the mooted ring fencing and banking break-ups to be watered down or put aside.
In the trailer announcing their video, the Pièces à conviction reporters noted: “The bankers promised to change five years ago as the world was shaken by an unprecedented financial crisis. Hoping to find a quick exit, politicians and bankers then agreed to transform the system. Their promises included: more morality in finance, more banking transparency, better consumer protection. This investigation reveals the current playgrounds of the world of banking and finance are ever more opaque, and that high finance is now even speculating on the dates of death of tens of thousands of people. Our film is an investigation into the mysteries of the powerful French banking lobby and its relationship with political power”.
The film shows Nicolas Sarkozy telling a public meeting in 2008: “self regulation for the banks is over; laissez faire is finished; the overbearing power of market forces is finished”. François Hollande, his opponent and victor in the 2012 presidential election, is shown waving his manifesto which at Point 7 promises that banking activities will be separated as they were in the US before the Glass-Steagall act was repealed. Later the film shows how the law drafted by Pierre Moscovici and designed to introduce the reforms promised by François Hollande, is hobbled by the all-powerful banking lobby via its networks in government. Indeed deputies who summoned the bankers to a parliamentary committee for hearings on the law were shocked to learn for instance that 99% of Société Générale’s activities would remain outside the planned separation of banking into retail and casino or investment business, in other words a non-reform. Effectively as the film records through a series of detailed interviews with ministers, leading defenders and critics of the banking system, the electoral promises of deep reform and a French-style Glass Steagall Act have been successfully repelled by a banking system with overall assets that vastly overwhelm France’s 1.5 trillion euro GDP — heralding massively disruptive consequences for the next collapse.
Paul Moore the HBOS whistleblower, relates some interesting insider experiences about the practices of bank lending, sales culture…
Speaking to the UK-based Independent newspaper Paul Moore, the HBOS whistleblower said that the punishments for the “HBOS trio” should include class-action lawsuits for breach of fiduciary duty, unlimited fines, and bans on holding directorships. “The problem is the whole system and it needs to be sorted out and others also need to be placed in the spotlight; the market; the major investors; the auditors; the ratings agencies, the politicians loosening the rules, the financial authorities etc… The executives were doing what the markets were demanding – ever increasing profits and growth. My point is that if you concentrate your ire only on the executives in charge at the time you miss the other guilty parties. The markets; especially the large investors such as pension funds and investment banks playing with our money. The auditors who took enormous fees but did not spot the problems and gave a glowing clean bill of health to these companies with no mention of the risks. The regulators who did not posit the question “what will happen if the world economy goes belly up” and set up rules to prevent some of the more risky practices. The ratings agencies who gave top ratings to these companies until the problems were obvious to everyone and then over-reacted. The politicians who loosened the rules at the behest of the City to allow bigger profits and to make London the market with the loosest rules to attract more business to become the financial centre of the world. The Financial Authorities supposedly overseeing the markets and the organisations.” Read his full testimony to a British parliamentary select committee here.
The five-year-old recession, directly attributable to the financial chicanery of global bankers and the highly dubious criminal enterprise many indulged in has destroyed economies around the globe and in Europe led to a lost generation with more than 50% of the young unemployed. As a result support for the European Project is fast dwindling while populism is on the rise. Just 41% of French now view Europe favourably according to some recent polling by (US-based) Pew Research, which found that “positive views of the EU are at or near their low point in most EU nations, even among the young. And fewer Europeans now say economic integration has strengthened their nation’s economy than did a year ago. According to a recent Pew poll, support for the EU has declined more in France than anywhere else:
By way of a footnote to these concerns about the European project read this essay in Der Speigel on how German Prussianism has outlawed the Spanish siesta and provoked revulsion: “Germany should not allow itself to be forced into the role of the Prussian taskmaster, who aims to implement strict discipline on the labor front throughout Europe and is being held responsible for the demise of cultural traditions. The social market economy does not follow the tennets of a radical, market-driven machinery of efficiency, which would of course have only one response to the subject of siestas: Get rid of them. Agamben’s popular call to defend Latin culture has a real background that would be foolish to ignore. Perhaps we should warm to the idea that the Spanish kings, in the days of the Fuggers, chose a solution that wasn’t half bad: They did not repay their debts. — Max A. Höfer, 54, an economist in Berlin .”
UPDATE: Max Kaiser says banksters admitted at Davos a few years back that the real size of the bailout needed to save the global banking system is 100 trillion dollars (listen from 5:09 mins), a figure he discloses in this report on the Anglo-Irish banking scandal (known as the #AngloTapes) recently revealed by the Irish newspaper Independent:
Listen at the start of the video to the clip of the exchanges between senior Anglo Irish executives over the figures used to “persuade” government to bail them out and then wonder, as FrenchNewsOnline has been doing for some years now, whether there is a criminal conspiracy at the heart of global banking and if so when will its protagonists be jailed?
- UPDATE 1-EU leaders push banking union despite German reluctance (uk.reuters.com)
- Crony Capitalism Corroding Democracy
- FN: A French Political Force on True Upswing
- Say Hello to the Merkozy Austerity Union
- Indignados reshaping European Democracy
- Merkozy Legacy: an EU on Edge of Implosion
- Are French Socialists Germanaphobes?
- Basta Bankers! Could Populists Crash the Euro?
- Iceberg Cyprus Set to Sink Euroland Titanic
- A Coup to Cure EU’s Economic Gangrene?
- Happy (Global-Debt-Jubilee) New Year to All
- How Bankers Bust The West and Killed the Kids
- Scapegoat or Rogue – a 4.9bn Euro Question
- Could Cantona Cause a Bank Run?
- Cantona’s Goalfree Bank-Run
- SocGen Staff Demand Kerviel Kompensation