It is surprising that anybody is surprised about any of this, here's a good list of some of the financial scandals of the past two decades, I'm sure there are plenty more. It never seems to dawn on people that this is all part of the plan, it's just that every now and then they either cross the line or get found out.
What doesn't raise any eyebrows at all, is that when The Powers That Be became aware that Barclays et al were deliberately pushing down LIBOR to make the banks look more credit worthy than they were, instead of The Powers That Be doing something to stop it, they just turned it into official government policy - bailing out banks via Credit Guarantee Scheme and Special Liquidity Scheme, investing £66 billion in the most bankrupt two, reducing the base rate to 0.5% (well below inflation) etc etc.
The stuff going on at EU level is even more insane, the banks and the governments have merged into one huge cartel sloshing money back and forth at each other with absolutely no plan of how any of it is ever going to be repaid.
Even ignoring all these "scandals", there is a view that the whole nature of banking - being allowed to split the zero into a loan and a deposit and to earn money from the interest margin - is fraudulent, as this enables them to take a slice of output ("rent") without actually producing anything.
This is just how bankers work, they will never stop doing it, because they - and the landowners - are the people for whose benefit the whole country is being run. They are the main beneficiaries of and probably the main drivers behind Home-Owner-Ism; most of the business tax changes introduced by the current lot favour banks in particular and make things even worse for productive businesses. And what it all boils down to is the get-rich-quick culture, which is human nature I suppose, but in this country the get-rich-quick people are those who are worshipped and celebrated most, starting with people who boast about how much money they've made on their house.
Nothing
6 hours ago
13 comments:
"most of the business tax changes introduced by the current lot favour banks in particular and make things even worse for productive businesses"
as well as past dodges, like getting themselves exempt from VAT.
Agree with what you say Mark, but there are market pricing tools that could be replicated to get an accurate LIBOR, and the rate the market sets on interbank lending it a useful metric- more useful than the arbitarily set central bank "base rate" anyway. My suggestions can be found below:
http://tiny.cc/0w0wgw
B, for example.
TBH, nice one, I've added you to my blogroll.
Superb comment, MW - have retweeted this.
TBH / MW. Exactly. I posted that argument somewhere else yesterday - can't remember where.
Surely LIBOR needs to be a rate that reflects the judgments of lenders not borrowers? The fact that the BBA reversed this just IMHO shows how (a) corrupt and (b) delusional they are.
Once you have LIBOR set as a lenders rate you can shut down the Bank of England since the market will make judgements every day and as a bank starts to borrow more other banks will see what's happening and raise their rates to that bank. The 'bad bank' will then have to sort itself out pdq.
WFW, ta.
L, I thought we were going to shut down the Monetary Policy Committe on Day One anyway? Sure, somebody needs to work out how much interest to pay on government debt, but that's just a question of paying as little as they can get away with at any given time.
As to LIBOR, there are plenty of countries where bank-to-bank lending is simply forbidden because it inevitably leads to "contagion", this is one rule that actually seems to work in real life. So no need for LIBOR as there will be no inter-bank lending anyway.
Mark- what countries don't allow bank-to-bank lending? I like that idea (a lot) from the perspective of minimizing the money creating effects of fractional reserve banking, but I also understand banks hold all sorts of assets, and sometimes they need cash, which they can raise by secured loans on other assets.
"Once you have LIBOR set as a lenders rate you can shut down the Bank of England since the market will make judgements every day" "The 'bad bank' will then have to sort itself out pdq."
Two very good reasons why Libor is not a lenders' rate then. As Mark points out, this is the sort of thing that happens when you have the rules of the game made up as they go along by the players.
TBH, as far as I am aware, Canada and Spain, and they sort of had this rule in the USA while Glass-Steagall was in force.
Yes, banks have to make millions of payments to each other every day, and some of these are left open at the end of the day, but this can all be cleared through e.g. the central bank.
And if a bank "suddenly needs cash", well it's f-ed anyway, not my problem, they are free to sell assets to non-banks.
In re 'fixing LIBOR', the State 'fixes' interest rates every day....
Seen this?
http://en.wikipedia.org/wiki/Suffolk_Bank
Intriguing. Possibly appropos LIBOR, or possibly not.
Nailed it, but its not going to change. too much self interest in the status quo.
Serial twat Turner on Sunday was saying that Libor was exempt from criminality as it was not a listed instrument. I wonder why.
Sean. I am so pleased that you also think that about Turner.
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