For all the seething zero has been finished about banks | Ross Clark

Ross Clark & ,}

How crafty of Goldman Sachs to make known 3.5 billion value of bonuses for the staff in the week that it was sued for rascal by the Securities and Exchange Commission. It is not tough to theory what will occur next. Politicians on both sides of the Atlantic will bear an additional hitch of seething at the mouth over bonuses and will go on to suspend over the genuine problem: that banks sojourn as well big to fail.

Goldman Sachss increase and bonuses wouldnt make a difference a fig if the US Government was rebuilt to let it go bust. But that wouldnt happen, given when it did with Lehman Brothers in 2008 it caused such massacre that governments effectively underwrote all banks. Goldman Sachss staff know full well that, however good the risks they take with alternative peoples money, the taxpayer will regularly bail them out.

It is right away eighteen months given the promissory note crisis. In that time there has been a finish miss of reforms to forestall practices of the kind of that Goldman Sachs is accused. All we have had in Britain is a small reward tax. Alistair Darling even boasted in his Budget debate about how most it had lifted preoccupied that this success is unequivocally an denote of how small the taxation has altered banks behaviour.

By this theatre of the 1930s promissory note predicament the US had upheld the Glass-Steagall Act, separating sell promissory note from the pristine gambling sorry, investment banking. It was a elemental remodel that ensured typical depositors were not at risk from suppositional activities, and was not repealed until 1999 funnily sufficient about the time that the promissory note industry again began to turn out of control. This time around there has been copiousness of speak about slicing banks down to distance and separating retails from investment functions, but no movement whatsoever. Only the Lib Dems and UKIP hold out any guarantee of separating sell from blurb promissory note in their manifestos.

Why shouldnt banks be singular to a sure size, and limited to specific, nominated activities that could simply be assessed for the risks they poise to the banks stability? Bankers would pant and smoke and call it uncalled-for division in the free market, but we could afterwards have a correct entrepreneur economy in that speculators were probable to be punished, as they should be, for insane behaviour.

It doesnt occur given the British and US governments are dependant to the taxation revenues from monetary services and dont wish to risk you do anything that competence send banks overseas. So they bellow about bonuses to keep the open happy, whilst greedily eyeing up the rising profits. If I worked at Goldman Sachs I would gamble my reward on there being another, even bigger, promissory note crisis.