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The too big to fail banks are up to their old tricks again

Shares falling, CEOs taking huge bonuses, fears about bad debt and cascading bank failures, and senior bankers coming out to tell us (“trust me, I’m a banker”) that they do not have liquidity problems… it’s 2008 all over again.  And the UK banks have been taking liberties recently according to the New Economics Foundation (NEF).

NEF list six key changes that the UK banks have successfully persuaded George Osborne to make:

  • Reversing changes to the bank levy which were meant to allow more competition
  • Sacking Martin Wheatley as Chief Executive of the Financial Conduct Authority
  • Watering-down the ring fence between retail and investment banking
  • Producing a disappointingly weak report from the Competition and Markets Authority
  • Confirmation that the Bank of England will not require banks to hold significantly more capital;
  • Imposing a time-limit on claims for the mis-selling of PPI.

As NEF point out:

“With the global economy facing a slowdown and economists warning that another crash could be just around the corner, it is more urgent than ever that we address the shortcomings of banking reform that promised to fix our broken financial system.”

Given that the UK public is still suffering from the impact of the 2008 crisis through cuts in services and benefits and anaemic economic growth, NEF’s call for reform may be too little too late.  Now is the time for UK opposition politicians and campaign groups to call on the government to rule out any further ruinous bailouts and quantitative easing.

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