So George Osborne has drawn a line under the Banks, no more need for banker bashing, the problems solved – Sadly someone didn’t tell Mervyn King!
Project Merlin was a disaster for George Osborne, a waste of time and effort with few results, in short the banks got off scott free, see previous post with an analysis here http://bit.ly/dNChDU
Nevertheless, the media have largely gone along with the idea that we now draw a line under the banking issue and it is not seemly to keep bashing the banks. However, this issue just will not go away. Until systemic change occurrs the spectre of the banks hangs over us like a dirty great cloud of nuclear fall out.
The simple truth as analysed here in more detail –http://bit.ly/fHAY9A, is that the banks need to be regulated properly, taxed fairly, large banks broken up, and preferably, the splitting up of investment banks from retail banking. We need to install capitalism back into our banking system so that they can be effectively denationalised, so that the rewards bankers get, match the risks they are taking. Banks that are too big to fail are simply too big and need breaking up.
George Osborne has done everything he can to undermine measures to regulate the banking sector in the EU, while at the same time taking credit for any annoucements negotiated within the EU.
Osborne must be reeling this morning as he read his morning papers while having his breakfast. The truth is that Mervyn King has said what we all know. It is not IF another financial crises will happen but WHEN, if the banking system is not systemically changed. Keeping silent hoping it will go away in the way the coalition appears to be dealing with the problem, is not an option.
This is a healthy signal to the banks however, as the regulatory system will shortly be reverting back to the Bank of England from the FSA. This sends a signal that just maybe, (a very large maybe) proper scrutiny of the banking sector will be on it’s way when the change occurs.
There was some good signs with the last report by the Independent Commission on Banking, that serious consideration of banking reform is on the cards. We all have to hope that this is not watered down by the Bullingdon boys to help their friends in low places.