The Global Credit Crunch: Banking on the Fall Guys

September 30th, 2008 | Money | E-Mail Article | Print Article

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I’ve tried them all. I hate them all. I hate all banks. I hate my bank. I hate banking with bankers even though I used to be a bleeding banker myself but that was another lifetime ago.

Safe as Houses My first job after leaving school was with one of the big four banks in the City of London. They called themselves Midland Bank International Division, then, but these days they are better known as HSBC; one of the largest banking and financial services organisations in the world with some 9,500 offices in 85 countries. They are, therefore, part of the global banking network of financial institutions that are currently falling prey to the so called “credit crunch” and “toxic debt” syndrome.

At Midland Bank in the 1980s, we were jokingly known by our customers for lending money to anyone who could prove that they didn’t need it. How times have changed. Greedy global banking networks ever hungry for increased profits and market share now offer huge mortgages and dodgy under-regulated derivatives to practically anyone, taking insufficient security based on the false assumption that property prices will continue to spiral out of control (and therefore beyond the affordability of most ordinary hard-working taxpayers). Clearly this constitutes short-sightedness and irresponsible lending practices. But bankers get paid massive bonuses anyway. And why worry about any threat to the economy when your croonies in power will bail you out at the slightest sign of trouble in the financial system? So, once again, for the rich folks, it’s another win-win situation.

George Bush - Another Fine Mess Where I come from, lining your pockets with other people’s cash is the quickest way to get yourself banged up by police under maximum security. Yet George Bush and his money-hungry goons - not satisfied with the billions they’ve reaped from the war in Iraq - are now fleecing ordinary US taxpayers of $700 billion on their way out of the White House by instilling another bout of fear and confusion not just among the American people but right across the world. For as the popular saying goes, when America sneezes, the rest of us catch a cold. How can this be? Are we all so blindly naive and stupid?

This “rescue package” will not make it any less likely that American citizens will not lose their homes. This “bailout” will not reduce the price of gasoline globally or offer universal health care to those who may suddenly fall ill and cannot afford to work or meet their medical bills. What the buying up of Wall Street’s toxic debts will do is ensure that there is no correlation between greed, risk and reward; and that privately owned banks and bankers bear no consequence for their own irresponsible actions.

In other words, the rich keep getting richer while the rest of us foot the bill.