Watch: King says banks should be split up
Mervyn King, the governor of the Bank of England, yesterday called for mega-banks to be split up.
In a highly critical speech yesterday he said:
Why were banks willing to take risks that proved so damaging both to themselves and the rest of the economy? One of the key reasons – mentioned by market participants in conversations before the crisis hit – is that the incentives to manage risk and to increase leverage were distorted by the implicit support or guarantee provided by government to creditors of banks that were seen as “too important to fail”.
Such banks could raise funding more cheaply and expand faster than other institutions. They had less incentive than others to guard against tail risk. Banks and their creditors knew that if they were sufficiently important to the economy or the rest of the financial system, and things went wrong, the government would always stand behind them. And they were right.
The sheer scale of support to the banking sector is breathtaking. In the UK, in the form of direct or guaranteed loans and equity investment, it is not far short of a trillion (that is, one thousand billion) pounds, close to two-thirds of the annual output of the entire economy. To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.
His speech was also covered in the news.
Writing in support in the Financial Times today, Martin Wolf also calls for something to be done, nothing that many banks have already started recovering from the crisis without learning from it.
Finally, as Mr King stresses, banks that are too big or important to fail cannot be expected to manage risk wisely. As he notes: “It is important that banks in receipt of public support are not encouraged to try to earn their way out of that support by resuming the very activities that got them into trouble.” In a market economy, the taking of risk is disciplined by bankruptcy, not underpinned by taxpayers.
Imposing either a “windfall tax” or special curbs on bonuses is an understandable political response to what is happening. But since the aim of current policy has been to transfer money to banks, what is the point of taking it back again? Again, while undercapitalised institutions should not pay dividends or discretionary bonuses, until they have reached their targets, do we wish to see permanent controls on levels of pay? The issue is whether incentives encourage excessive risk taking. That is where regulation should focus.
Whose Tory meritocracy is it anyway?
291 women and 4559 men have been elected to the House of Commons since women were enfranchised in 1918. So those shouting “not in my name” and “meritocracy” to argue against the possible means of all women shortlists do have a prima facie case to answer.
David Cameron’s claims that his party gets it enough to continue if he fell under a bus is rather challenged by the ferocity of the response from the Tory netroots. Aspiring candidate Iain Dale declares not in my name while the Isaby/Montgomerie co-premiership at ConservativeHome seems to think the sky might fall in. (Tory ppc Joanne Cash has offered a rare pro-leadership view).
By definition, meritocrats must share the goal of “fair chances and no unfair barriers”.
The simple question: what is the cause of the scale of under-representation? And what is the solution to deliver fair chances and equal representation?
2001 was the last General Election in which no party used an all women shortlist measure. How did we do on gender equity? Most noticed a small drop from 120 to 118 women in the Commons. The real story was missed. Just 9 out of 92 MPs elected in mainland Britain were women. Not quite 10%. The Conservative class of 2001 – 38 white men and 1 women (2.5%)- was well below the post-1918 historic Commons average.
So whose meritocracy is it anyway?
continue reading… »
Revealed: Home Office communication on G20 Protests
contribution by Kevin Blowe
A week ago, I said on my blog that Home Office had received a Freedom of Information request asking for documents it held or produced between 1st and 8th April of this year that were either “briefings, notes, minutes, emails or letters prepared for ministers and senior officials concerning the 1 April 2009 G20 ‘financial fools day’ demonstration” or “memos, papers, emails, minutes or documents relating to either the 1st April 2009 demonstration at the Bank of England or Ian Tomlinson’s death”.
The Home Office website indicated that these were available “in hard copy only” so I requested them last Monday and, with surprising speed, they turned up in the post this week.
There are some 80-odd pages and they have been zealously redacted – in fact in one instance, a civil servant has decided to block out the name and contact details of Charlotte Philips, Head of News at the Independent Police Complaints Commission, even though this information is publicly available on the IPCC website.
continue reading… »
Watch: Griffin in trouble over Generals threat
ITN News had this report last night on Nick Griffin threatening Army Generals, which we highlighted earlier.
BBC political editor Nick Robinson asked Griffin about the threat, who has since back-tracked since we first highlighted this story.
The leader of the BNP Nick Griffin has told me that he does not, after all, want to see two former heads of the British army put on trial and hanged for war crimes.
Earlier Mr Griffin was reported on the BNP’s website comparing Generals Sir Mike Jackson and Sir Richard Dannatt with Nazi war criminals hanged after the Nuremberg trials. The BNP’s leader now says that this was “black humour”.
Black humour indeed. It’s political correctness gone mad!
US “rupture” with Cameron over Europe
The Times reports today that the US government is worried over David Cameron stance towards the EU.
The Obama administration is reportedly worried his approach towards the Lisbon treaty would cause a “rupture” between Europe and a British government.
Disclosure of Washington’s concerns comes on the day William Hague, the Shadow Foreign Secretary, arrives in the US capital for talks with Mrs Clinton. A source close to the State Department said: “Hillary always likes to ask questions and, as she is such a candid person in these meetings, I would be surprised if she did not ask Hague to explain the position.”
More worryingly for Cameron, Louis Susman, the US Ambassador to London, has suggested that Cameron’s new allies in Europe, who have been linked to anti-Semitism, would diminish Tory influence in Brussels.
Jewish leaders in the US are closely watching how Cameron will respond to the allegations made about Kaminski and Tory allies from Latvia.
The article adds:
[President Obama] has less sentimental attachment than many of his predecessors to the traditional “special relationship”. Instead, he believes that Britain should be at the heart of Europe — a position that has been put in doubt by French and German anger over Mr Cameron’s decision to sever ties with the federalist centre right grouping in the Strasbourg Parliament.
Last night the Guardian also reported that a prominent Holocaust survivor has called on the Conservative party to reconsider its alliance with Michal Kaminski, the Polish MEP who leads the Conservatives in the European parliament, citing his “unacceptable” views.
He said:
These views would be anathema to any Jew or any decent person who knows about the Holocaust,” he said. “This is not a direct denial of the Holocaust, but in a sense it is accusing the victims of being no different from the perpetrators. There is a line here which must not be crossed.
The newspaper reports that the president of the [Jewish] Board of Deputies, Vivian Wineman, has written to Cameron asking for assurances.
Top 10 ways Cameron has made an arse of himself
Following my recently popular Top 10 Tory ‘out of touch’ gaffes, I thought I would follow it up with a focus on the golden boy David Cameron.
So here is an incomplete list:
10. Not knowing how many houses he’s got, only a while after John McCain made the same mistake.
9. Being photographed by Dave Osler.
8. Getting embroiled in a doctored photo fiasco in relation to some now embarrassing pictures of him being an arrogant-looking git at university.
7. Pretending he’s all green on his bike, when it’s total bollox.
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New Credibility Gap in Sex Trafficking Estimates
There’s no two ways about it, what I’ve got to say this evening is likely to upset, annoy and even anger more than a few people who are notionally on ‘our side’, but there are some thing that simply have to be said…
…so don’t say that you haven’t been warned.
My starting point for this evening is Nick Davies’ stunning exposé of the near abject failure of the Home Office’s highly touted ‘Operation Pentameter Two’ investigation into sex trafficking in the UK. Over the course of six months, hundreds of brothels/sex workers were raided, in the clear expectation of finding a thriving underground trade in trafficked sex workers, as part of campaign that involved government departments, specialist agencies and every single police force in the country…
…and turned up next to jack-shit – a total of five bona fide, honest-to-goodness trafficking convictions in total.
Nick’s article has already sparked off a pretty lively and entertaining row on Newsnight between Denis McShane and Jeremy Paxman and drawn a response from Rahila Gupta of Southall Black Sisters (which I’d cheerfully fisk if I thought it would make the slightest bit of difference) none of which, in any sense, detracts from the fact that neither of the Pentameter investigations has come anywhere near close to substantiating any of the claims that the Home Office or Home Affairs Select Committee interests have made about the alleged scale of sex trafficking to, and within, the UK.
To some that’s clearly a controversial observation – it shouldn’t be. continue reading… »
BNP issue coded threat to British generals
The BNP has published coded threats to army generals who distanced themselves from the party today.
In an editorial published on the site today, the BNP’s Nick Griffin said today:
Those Tory generals who today attacked the British National Party should remember that at the Nuremburg Trials, the politicians and generals accused of waging illegal aggressive wars were all charged — and hanged — together.
According to the BNP (link to their website), those were the words of Nick Griffin today in response to attempts by Army Generals to distance himself from the racist party.
The editorial added:
This hysterical attack on the BNP is nothing but a dying Tory toady gasp as the ordinary brave and loyal soldiers turn their backs on that party,” Mr Griffin said.
Mr Griffin also dismissed as “sour grapes” complaints about the use of the Spitfire and quotes from Winston Churchill during BNP campaigns.
Also at Left Foot Forward and LabourList
New reform group calls for open primaries
A newly launched pressure group demanding a change in our politics has called for open primaries to be made compulsory for selection.
Open Up Now claim to be a group of people from backgrounds who have “come together with a common motive of trying to do something to help improve a dire political environment”.
They say their aim is to increase transparency, fairness and accountability in elections and government by promoting positive change.
They call for Open Primaries on their website with this demand:
It’s not just about expenses. It’s about reforming our political system. The way Parliament is run and government does business must change – and getting the best possible people into office is the starting point.
That’s why we want the people, not the politicians, to select who stands for election. That’s why we want Open Primaries in every constituency, where the people select their own candidates, and where anyone can put themselves forward to be a candidate. That’s why we want all current MPs to agree to stand for re-selection in an Open Primary. We want this before the next General Election. And this is what Open Up is calling on every political party to do.
They have also created this video
A challenge for Tom Harris MP
A while ago Tom Harris MP wrote on his blog that:
Most organisations involved in this area [working with teenage parents] will concede that it’s about lack of self-esteem and a perception that the independence that follows childbirth – havings one’s own flat and independent income through benefits, etc – is an individual’s only route out of their current situation.
I asked him whether he could cite any evidence to support this claim, and he had a lot of links about low self-esteem and correlation between socio-economic deprivation and teenage pregnancy, but nothing to support the idea that getting a flat and benefits specifically was a major reason why teenagers got pregnant.
He said that he thought he had seen some research by the Scottish Executive which supported this case, but couldn’t find it.
This is an issue which I know that Tom is very interested in, so I would like to propose a charity bet. If, by the end of this month, Tom can provide examples of five charities who concede that many teenagers get pregnant to get a flat and benefits, or three pieces of peer-reviewed academic research which find that this is a major motivation for teenage parents, then I will give ten pounds to a charity of his choice.
continue reading… »
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