Make more banks state owned

Wiseman Sat Oct 11, 2008 at 09:37:31 PM GMT Print-friendly version Facebook

Dear comrades

We should nationalise most banks in trouble.

Wiseman





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Make more banks state owned | 10 comments (10 topical)

Re: Make more banks state owned (#1)

by otware on Sat Oct 11, 2008 at 10:07:52 PM GMT

Possibly. Must be done on a case-by-case basis though.


Re: Make more banks state owned (#2)

by swatantra on Sun Oct 12, 2008 at 09:40:01 AM GMT

More on a cash-by-cash basis. If the State 'invests' in them, then it must be for the very long term in order to to reap the benefits.


[ Parent ]

Re: Make more banks state owned (#3)

by Free Radical on Sun Oct 12, 2008 at 09:55:48 AM GMT

See Will Hutton's article in today's Observer for a very clear analysis of the scale of the crisis confronting us - http://www.guardian.co.uk/commentisfree/2008/oct/12/marketturmoil-creditcrunch 

It's not just the banks, but the financial system of lending supporting them that is in trouble, and nothing short of wholesale intervention by governments to underwrite these markets can save the system from collapse and a slump on the scale of 1929.

Obviously in 1929 it was not just the immediate crash but the long and deepening recession that followed that was so damaging. Our economies are far more interconnected now, so hopefully there is more incentive for governments to act in a concerted manner than there was in '29, and hopefully the lessons of the necessity for state intervention have been learned (after being forgotten in the past 30 years). Basically, we all swim together, or we sink individually.


Re: Make more banks state owned (#4)

by NorthernMonkey on Sun Oct 12, 2008 at 02:24:04 PM GMT

Oh for goodness sake!

More banks may well come under state control, but only wiseman could actually positively want it to happen!

Wiseman, I do hope you realise that these banks are being nationalised temporarily rather than strategically. The government (particularly if the Tories win the next election) will sell them in probably 3-5 years time once the economy has recovered. And rightly so. It isn't good for banks to be owned by the state in the long term.


Re: Make more banks state owned (#5)

by doctordunc on Sun Oct 12, 2008 at 03:59:07 PM GMT

While I don't particularly want to start a big debate about hypotheticals, I can't help pointing out that the current situation is testament to the fact that it's not especially good for banks to be owned privately in the long term!  I know the usual New Labour response is to focus on regulation rather than ownership, but I certainly don't want to launch an attack on the FSA - and the only way to argue that regulation is better than control with regard to the banks is to conclude that the regulation in recent years has been grossly imcompetent.

All sorts of people are expressing all sorts of opinions about who banks should lend to, where they should borrow from, who they should pay bonuses (and who they shouldn't), whether they should repossess houses, etc.  The one thing that is clear is that if your long-term solution is one based on re-establishing a free market in global finance then all those opinions are quite worthless: those making the decisions may well be accountable to somebody but they aren't accountable to you.  And their interests are likely to be contrary to your own.

Yvette Cooper seemed to step back from ruling out any government (or 'tax payer') representation on the boards of banks when she was interviewed this morning.  Bailing out the banks is inevitably expensive, but if it came hand-in-hand with sufficient control to be able to ensure that new liquidity was used in a way to back up the 'real economy' and to protect people's homes and jobs (not to mention ensuring that it doesn't go in massive bonus payments) then it is certainly valuable.  Resuscitating the corpse so it can die again is worthless.


[ Parent ]

Re: Make more banks state owned (#6)

by Floating voter on Sun Oct 12, 2008 at 04:20:30 PM GMT

"the usual New Labour response is to focus on regulation rather than ownership,"

It would be better if the regulation actually meant something than ensuring that loads of forms are filled in. When we moved a bank account last year about the only thing we were not asked for was the birth certificates of all grandparents. The bank manager happily admitted that all the paper was meangingless but required by the FSA. After filling it in it would be locked away for seven years, probably never looked at and then destroyed.

 

"but I certainly don't want to launch an attack on the FSA"

Why not? You could make them disappear tomorrow and the financial and banking would only notice because the paperwork would decrease. The FSA are about as useless as they come. A cement bicycle is more practical...

 

"regulation in recent years has been grossly imcompetent."

Now we are in total agreement. 

 

"Yvette Cooper seemed to step back from ruling out any government (or 'tax payer') representation on the boards of banks"

Good. Set the regulatory framework by specifying what services banks can offer, equity / debt ratios, loan/deposit ratios, etc and let them get on with banking. Actually regulate the right stuff and it might even work.

If you really want to sort it out abolish credit reference agencies and force the banks to LOOK at the risk instead of ticking a box.


[ Parent ]

Re: Make more banks state owned (#7)

by Free Radical on Sun Oct 12, 2008 at 06:05:08 PM GMT

The current situation demonstrates the failure of private ownership of banking and the effects of deregulation. Why on earth should the public, having come to the rescue of banks (we hope) through partial nationalisation give up profit-making assets  when the economy picks up? It could help pay our pensions. Why would you wish to deny us all a return on our collective investment? That's one point. The other is that the banking system is reliant on state intervention, if not total ownership to actually make it work...

After the Great Depression all sorts of regulation was built into the financial system to make it work. The proponents of the free market have dismantled this in the past thirty years, leading to the abyss that we find ourselves in now.


[ Parent ]

Re: Make more banks state owned (#8)

by jaymason on Sun Oct 12, 2008 at 07:58:43 PM GMT

Anyone remember British steel, British Leyland and a host of other nationalised industries, an example to the world they were, of how to not run a buiness and what makes anyone think that the government will run banks any better. Especially as most of the trouble comes from lending to people who cannot afford repayments and it's these people who tend to form Labours core vote, so what are nationalised banks going to do either withold credit from people who can't afford it or lend them so much that they default and start the whole shenanigan off again.


Re: Make more banks state owned (#9)

by adwilliams134 on Sun Oct 12, 2008 at 09:12:47 PM GMT

"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank.

You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin!

You are a den of vipers and thieves."

(Andrew Jackson, 1767-1845, 7th US President, when forcing the closure
of the Second Bank of the US in 1836 by revoking its charter)


[ Parent ]

Re: Make more banks state owned (#10)

by e10rifles on Mon Oct 13, 2008 at 12:42:45 PM GMT

Nobody is suggesting nationalising banks and running them like British Leyland.


[ Parent ]

Make more banks state owned | 10 comments (10 topical)