There’s no other way of saying this: banks are taking the piss!

Well, now we know. Our worst suspicions have been proved right.  Having caused the financial mess we’re in, banks have not lifted a finger to help the country recover. We now have proof, straight from the lips of the Governor of the Bank of England himself. The behaviour of banks is actually working against the nation’s recovery.

Yesterday Mervyn King spoke out against the “harsh treatment small companies are still suffering at the hands of banks”. And, as if to prove the point, the latest statistics show that last year banks received £10.7 billion more than they gave out in loans. Since 2008  they’ve received a total of £82.7 billion more. He went on to add, “It’s obvious that net lending by banks to businesses as a whole has fallen quarter-on-quarter through 2011” – and every quarter for the past three years!

All this comes after the Bank of England conjured up £325 billion of ‘quantative easing’, which was supposed to persuade banks to lend to businesses and to stimulate demand. It has done neither. Instead, it’s ‘eased’ its way into the coffers of the banks. Quantative easing has been for the benefit of banks, not businesses or people.

So what does all this tell us? The message is clear. Banks will do whatever they want and will only ever do what is in their best interests, despite what the government wants them to do. They’re not interested about what’s best for the country nor about lending to business – and that’s not going to change.

It’s time we woke up to the fact that we have a feral financial elite who have become so powerful that they are able to design policy for their own benefit. There will be no change to the way banks behave until this problem is addressed. What to do? There are some obvious remedies to reduce their power which include: creating more banks to increase competition, and the splitting of the retail and investment arms of banks. These changes are ‘in the pipeline’, but there will be no fundamental change until the government takes control of business and infrastructure lending by creating banks designed specifically for that purpose. The responsibility of providing the means, the fuel, which enables wealth creation to take place, is not something that should be entrusted solely to third parties whose only interest is their own self-interest.

Be Sociable, Share!
Share
Filed under: Home Tagged with

Leave a Reply

%d bloggers like this: