Giant Swiss bank Credit Suisse stands accused of helping US plutocrats avoid tax by, among other things, shredding documents, holding meetings in a secret elevator, and hiding bank statements inside copies of Sports Illustrated.
The same bank also recently agreed to pay the US Securities Exchange Commission $196.5 million for another misdeed: cross-border brokerage and investment advisory services it provided to unregistered US clients.
14 other banks are under investigation by US authorities on the tax-avoidance front.
Late last year an even bigger, J P Morgan, did a deal with US authorities to pay a fine of $13 billion to mop up another scandal, mis-selling of mortgage-backed securities. J P Morgan is holding a scarcely-imaginable $23 billion in reserve for other fines or compensation on the same principle as an individual might keep a stash to cover parking fines.
Banks have effectively admitted rigging the Libor interest rate, a central factor in transactions between banks. British banks are paying fines and compensation for mis-selling payment protection insurance to personal credit-card holders and fobbing off dodgy credit schemes on small businesses.
Several banks also stand accused of rigging currency foreign-exchange rates.
All this has come out since the 2008 financial crisis put banks under closer scrutiny. And that crisis happened after many years in which we were assured that banks were more securely and efficiently regulated than ever, and in which, every time TV news wanted an “expert judgement” on anything economic, they would go to a financier standing in a City dealing room.
As the conservative Financial Times columnist Martin Wolf wrote, a while back: “Banks, as presently constituted and managed, cannot be trusted to perform any publicly important function, against the perceived interests of their staff [meaning their top bosses, not the ordinary workers]. Today’s banks represent the incarnation of profit-seeking behaviour taken to its logical limits, in which the only question asked by senior staff is not what is their duty or their responsibility, but what can they get away with”.
As if to reinforce his point, banks have responded to EU limits on bonuses for top bankers by, in the current bonus season, making similar pay-outs but calling them “allowances” rather than “bonuses”.
The TUC should campaign for the policy for “full public ownership of the [banking] sector and the creation of a publicly owned banking service, democratically and accountably managed”, decided by its 2012 congress.
Unions should press for the Labour Party to take up the demand.
