Banking and Finance

The left was right to campaign against leaving the EU in 2016. Based on the tenor of the campaign, it was clear the Leave campaign would embolden the xenophobes and nationalists that exist across the class spectrum in the UK. This prediction was proven chillingly correct with both the spike in hate crime that followed the referendum and the movement that has emerged around Tommy Robinson over the last few weeks.

At the session on nationalising the banks at the AWL’s Ideas for Freedom event (21-24 June), we had, alongside Patrick Murphy speaking for that policy, a speaker from the campaign group Positive Money.

The thermometer-busting moment of the 2008 economic crash was the collapse on 15 September 2008 of Lehman Brothers, then the USA’s fourth-largest investment bank. It was the biggest bankruptcy in US history.

After it, it seemed doubtful for a while whether the other big investment banks could survive without drastic reshaping.

By 2017, so the Financial Times reports (12 June 2018), “group-wide profits last year of $78.4 billion across the top nine investment banks — excluding the much-changed Bank of America — were higher than the $75.4 billion recorded in 2007”.

Two Parliamentary committees, both headed by right-wing Labour MPs (Frank Field and Rachel Reeves) have called the UK’s big four accountancy firms to be referred to competition authorities for potential break-up.

Investigating the collapse of Carillion, which made its bosses millions from taking on outsourced contracts, the MPs found that the firms supposed to audit (check) the firm’s figures were a “cosy club incapable of providing the degree of independent challenge needed”.

In the last year or so, world capitalism has had its nearest approach to a general economic revival since the crash of 2008.

A clutch of figures at the end of April show that the revival is very weak. Britain’s first-quarter GDP growth was reported at just 0.1 per cent. Britain’s GDP growth figure is only 1.2% during the past year, the lowest figure since 2013.

The “purchasing manager’s index” for Britain’s industry was at a 17 month low in April.

The big banks — UBS, Royal Bank of Scotland, JP Morgan Chase, Citigroup, Barclays, HSBC, and others — are nearing a deal with the EU over their rigging of foreign-exchange markets.

They have already paid American, British and Swiss authorities more than $10 billion for the rigging, and the EU over $2 billion for rigging interest rates.

The 2008 crash has been followed by a cascade of investigations and scandals, triggered by resentment built up against the banks by government authorities and non-bank capitalists.