Hello again! Been a small
while since my last post but thesis writing has been taking up most of my time
lately. I’ll have a blog soon about some of that but today I want to write
about what I feel needs to be done about our banking system.
My blog is based
on something I read a few weeks back. Mr Irvin hits the nail on
the head quite well with his points and I just wish to touch on a few important
points, points that I personally want to throw out there for your
interpretation. When I look at the banking industry today I see nothing,
absolutely nothing but greed. I see no one but the average person getting hurt
by the irresponsibility of our current financial system. The last great act
that we had to protect us was the Glass-Steagall Act. I
say us collectively because as the biggest unregulated financial sector, the US
has the ability to destroy what we have. I think it’s time we nationalise our personal banking system so that what
people invest and save can not be
touched or mercilessly gambled away like in 2008. I look at the bonuses that
the financial sector ‘rewards’ itself with for its ‘hard’ work and I ask
myself, if the average person was actually provided with a savings account that
was rewarding for them, how much fairer and equitable would society be?
Consider the pipe dream of a bank director getting a bonus of €10,000 instead
of a few hundred thousand euro, or even the millions that some get, and the
rest of the money being given to the loyal customers whose money the banks make
fortunes from. You know, a decent savings account rate that rewards your
average person for making the effort to save. I’d have a separate investment
banking side that businesses could invest in and they could take risks with
their money. You know, a business (the bank), taking both calculated and insane
risks with another businesses money. And I wouldn’t allow a personal bank have
an affiliation with a corporate bank. We’ve seen how easy it is for them to
suck money from one to the other to cover losses. I’d certainly give business
banks the ability to borrow capped amounts from personal banks. Nothing so
great that they could bankrupt a personal bank; However it would be enough so
that if they needed a short-term loan, it would be an available avenue for
them. I’d also make sure that these loans were fairly high interest due to the
risky nature of the loan. The interest the personal banks earn helps reduce
personal interest rates on loans for customers and/or adds to the kitty for
improved savings and investment rates for their personal customers. I’m fed up
with hearing about how the financial sector needs less and less regulations,
that they need tax breaks, that a Robin Hood tax would put too great a burden
on the financial sector in ‘difficult’ times for them.
Rubbish.
Maybe not in Ireland, but
worldwide the biggest banks are still doing ok. Their directors are still
taking home insane salaries. They’re still paying out stupid bonuses. Meanwhile
the people are unemployed, starving and their governments have somehow been
hoodwinked into bailing out the financial institutions. Two countries stood
tall and told the banks and world institutions where to stick their
recapitalisation plans – Iceland and Denmark and they’re doing
ok. We need to bring services back to the people and make them for the people.
Not for corporate profit. Corporations profit massively from short-term bets
and the CEO’s take so much money from the companies that when things go arse
up, there’s no money left to help the companies they run.
« To become truly great, one has to stand with people, not above
them. »
Montesquieu
I think banks should be run a
bit more like Credit Unions. They should be there to serve communities and the
people in them. Loans should be available and interest rates should be
dependent on the nature of the loan. Children’s Education? Minimal interest
rate. Necessary home improvements? Low interest rates. A second or third car?
Medium rates as it might not be necessary. Shopping trips? High interest rates
for discretionary, unnecessary spending. These are only examples of course but
I’m just throwing ideas out there! There has to be a better way to run our
banks and make them work for us. Institutions may complain that without massive
salaries then they can’t entice the ‘best’ to manage them. Em…. The best did a
right old job on the world economy in the last 5 years. How about moderate
salaries starting at €60,000 rising to €100,000 after 5 years of proven
ability? You want more money? Ok then. Go elsewhere. Oh look – a hungry,
employee who has worked under you for the last number of years and is perfectly
qualified to take over your position. A position needs to be filled? Oh look –
a qualified graduate who would be delighted to have a job in which career
prospects are good and it’s a solid job. Want the excitement of the private
boom and bust banks? By all means – go work for them. In no way is this aiming
to restrict people and their job choices. I think a higher management turnover
provides more job opportunities to our graduates. It means fresh ideas are
constantly being brought from our Institutes of technology, our Business
Schools and our Universities. People no longer get lifetime positions on
gigantic salaries and pensions. Job security is not affected as if you prove
yourself capable of doing the job – then it’s yours. Just like it is now. But
you work for the honest growth of an institution; Not for gigantic profits at
year-end and therefore a gigantic bonus for you. Even the Financial Times has opinions bubbling to the surface for a redistribution of bank wealth to make the banks more competitive. (You'll need to register free with the FT to read the citation)
“Nobody can go back and start
a new beginning, but anyone can start today and make a new ending” – Maria
Robertson
Change needs to come soon
