The witch-hunting of bankers must stop – they say. That is right, and what is also right is that we must stop bankers from conducting their business the way they do now. Real and continous excessive profits, salaries, bonuses, surrealistic products, widespread speculation make it easy to cry wolf.
The bankers have largely been thinking of themselves and their own profits lately, being greedy bastards, and also having made a hefty contribution to the souring of the global financial system and the present crisis. The banks only purpose should be to serve the businesses of the world engaged in the production of goods and services, facilitating it all – and being a low cost, innovative producer of such services. The sorting out and clarifying their of role should be commenced right away.
The big banks are doing all kinds of businesses the supermarket way, and they mix it all together – private, business, investment, financial products, speculation – in their accounts.
Too many banks are” too big to fail”, they are part of holding structures that are intertwined and interdependent and where risk is difficult to see and follow. They are also global, moving funds here and there, risking loosing track of what is going on.
Banks are also heavy lobbyists, turning the the tide their way, pressurizing politicians to their advantage. Maybe this kind of lobbying should pure and simple be forbidden?
So we need a new banking industry, and regulation of reserves is not enough, more radical changes must be implemented.
First the banks must be made smaller, definitely more local understanding local businesses, more understandable, more transparent, we must break banks up so that capitalistic competition becomes a reality, so that they are small enough to fail, they must take their risks as they have set themselves up to. Regulation must work and bite, competition must flourish. Now the markets don’t work any more, the players are too few and too big. Complete laissez-faire is not good in the long run, it leads – always – to excess.
The basis of it all is commercial and industrial enterprise and the banking system must support that. We must reduce the importance of financial constructions and speculation, fancy unfathomable products, the complexity of the financial system must be reduced, banking and finance must be simplified.
Size and relations must be looked into as large also is risky and global is risky – the cost of failure is too big.
The parts of banking must be sectioned from each other – private, commercial, financial, speculation, investment – with separation of accounts. The fractional reserve system should be looked into.
The political power must be reduced, independent central banks must be built and allowed to work in cooperation with regulators.
So this could be interesting – and better – more banks, good capital regulation, restrictions on activities, reoval of conflicts of interest, lobbying forbidden, competition overseers that are fit and well.
The weakness of global risk exposure must be controlled, risk should largely be local and understood locally. Understanding and transparency must be there always, or businesses and people may suffer undeservedly.
Investors that really are banks should be included in this regime.
Banks and investors must not be allowed to hurt the real economy, they must not be allowed to become crass speculators, even financial terrorist as some say.
A new era is dawning – real risk understanding, real competion, good servants for the business community.
We can always hope, and see to it that we elect politicians that know the interests of a good real economy.