Friday, November 27, 2009


In a week that, by common agreement, appears to have been another good one for the banks, I found myself digging out some notes I made of a discussion on the BBC Today program (25 September, 2009) This involved a bunch of bankers, hedge-fund managers and financial journalists discussing what had changed since the 2008 banking crisis.

By common agreement the answer appeared to be 'not very much'.

And when considering whether there is anything that can be done to lessen the chances of future banking catastrophes, there was similar unanimity in agreeing: yes there is - we could return to a system that enforces a separation between high street (commercial) banking and investment (casino) banking. The idea being that, if investment banks were aware of the fact that next time they mess up there isn't going to be anyone riding to the rescue, they might have a healthier attitude to risk.

A system of this sort was originally established in the USA by the second Glass-Steagall Act (1933) in response to the 1933 Wall St banking crisis but was repealed again in 1999 after prolonged lobbying from the banking industry. And the rest (as they say) is history.

So why aren't we putting it right?

The answer, it seems, is that the banks don't want to do that; they think it's best to leave things as they are. We doesn't come into it.

Reader: That's all perfectly clear but what's worrying me is this business of taking notes of the Today program. Isn't that just a little bit unusual ?

"For goodness sake darling - please try to be a bit more careful; you've got marmalade all over my notes again!"

Omnivorist: Hahaha. Don't worry I don't make a habit of it. It's just that on that particular morning I remember feeling deeply shocked by the realisation that nowadays we are ruled by the banks. Up till then I'd believed I was living in a democracy.

Reader: Bless

1 comment:

  1. As a doctor I am sometimes asked: "Doctor, I have started taking notes on the Today programme again, is there something wrong with me?"
    The answer is no, there is no intrinsic pathology involved in taking notes of the Today programme. However if this problem persists, or if you find yourself trying to memorise the clever bits from "In our time" with Melvyn Bragg, you should consult a specialist.