17 Feb 2011

Vampire squid banks sucking our economy dry

Earlier this week I linked to a good new very short film re the banks - well here is another below. We’re told that bank profits are essential to the UK economy. But are they? To find out nef asked whether big banks were benefitting from hidden subsidies, in addition to the unprecedented public support for the financial sector over the past three years.

I've sent a copy to Neil Carmichael and asked him to sign Early Day Motion 1141 put forward by Caroline Lucas on the reform of the banking system calls for radical change in the banking sector. From the limited information available, nef analysts were able to identify a range of hidden subsidies that dwarf the Treasury’s bank levy, and the £300 million put aside for the ‘Big Society’ bank. In fact, the public is supporting the banks to the tune of at least £32 billion a year, outstripping Cameron’s ‘Big Society’ bank by a factor of 100:1.

"A great vampire squid, wrapped around the face of humanity, relentlessly jamming its blood funnell into anything that smells like money." That was how journalist Matt Taibbi described Goldman Sachs in a Rolling Stone exposé from 2008.

See the nef report here. Here in the UK, the banks are preparing for another round of staggering bonuses - an issue I've already covered here. The banks claim that these payouts are necessary for attracting the best staff. Interestingly the evidence suggests otherwise. Psychologists at MIT found that when students were set a task that required even the most basic cognitive skill, a larger reward actually reduced performance - see a short film here on that. And there's living proof that bonuses aren't necessary for success. A major Swedish Bank, Svenska Handelsbanken, with over 80 branches in the UK, doesn't pay any bonuses at all.

So what to do with your money?

Here is what nef says: "We don't have to keep our money in the coffers of the big banks. In the USA, the Move Your Money campaign, launched by the influential online news source the Huffington Post, has inspired Americans to move all or some of their money into accounts with alternative institutions. Here in the UK, the banking sector isn't nearly as diverse as in the States, but there are still good alternatives. Check out Triodos, the Co-operative, the Ecology Building Society, the credit unions, National Savings through the Post Office, and the exciting new territory of person-to-person lending at Zopa."


Philip Booth said...

Hundreds of protesters are expected to occupy banks around the country amid signs the direct action movement that has shut more than 100 high street stores in the UK is spreading to the US. Activists from UK Uncut, a campaign group set up five months ago to oppose government cuts and corporate tax avoidance, will stage their first national day of action against the banks on Saturday with protesters expected to bring more than 30 high street branches of Barclays to a standstill.

Philip Booth said...

Bailed out (84% publicly-owned) Royal Bank of Scotland (RBS) reported losses of £1.1bn for 2010, but will still pay bonuses to its staff of £950m, down on £1.3bn last year when it made an even higher loss of £3.6bn.