Dec 22 2011

Why doesn’t the FT use swear words when writing about bankers’ threats?

Posted by: Nick Shaxson in: Thoughts

From Treasure Islands:

“Financiers threaten politicians in the US and other large economies with the offshore club – ‘don’t tax or regulate us too heavily or we’ll go offshore’, they cry – and the onshore politicians quail and relax their own laws and regulations. As this has happened, supposedly onshore jurisdicitons have increasingly taken on the characteristics of offshore…”

Now, from the Financial Times today:

The UK government this week offered a compromise to some of the country’s biggest banks, which had threatened to leave the City of London if tough new capital rules were imposed across the board. HSBC and Standard Chartered, two UK-based banks with enormous overseas operations, have been rattling sabres about proposals from Sir John Vickers designed to make Britain’s banking system safer for UK taxpayers.

The compromise is that the banks will be able to avoid the high capital requirements if they can show that those businesses will never need rescuing by the UK taxpayer. What a lily livered, scared-of-his-own-shadow, boo-to-a-goose response from the UK Chancellor, George Osborne, who approved this cave-in. The FT article gives this possibility short shrift: for all the bells and whistles you might put in a regime to make banks safer, recent experience has taught us that there is no way to guarantee that the system you put in place is safe.

The cave-in is just that: a cave-in, pure and simple. And all credit to the FT for giving the correct riposte:

What the government must not do is to water down its rules simply in order to prevent a bank relocating. That would be a very poor bargain for the taxpayer.

I think the FT ought to have included a few swear words in its riposte – but this will do for now I suppose.

one comment

Nick Flynn 12th December, 2011 12.29 pm

Such management of established wealth is the main expression of an English tradition established centuries ago by the Norman invaders, of the powerful exploiting Joe and Jane Public then taking the proceeds abroad thereby placing them beyond the reach of the Taxman so as to reintroduce them back into the economy in due course masqueraded as foreign inward-investment and therefore deserving of special tax-exemption status, whereupon the same-old same-old happens all over again ….we live in a traditionally abusive environment where a Prime Minister was so contemptuous of the Electorate that she believed Society does not actually exist as such and had the nerve to say so publicly, while her apologists now expect her’s to be a State funeral to celebrate her life: imagine, those who say we don’t exist nevertheless expect us to do so just for the sake of burying her body in pomp and ceremony – what insane hypocrisy …. and such greed ….

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