Grasping the nettle…..
Banking reform is one of the defining issues for our economic well-being. The story of this economic crisis is not just one of a ‘reckless few’ making bad calls and ‘light touch regulation’ but a systemic structural failure of our economic system, a system that has become dominated by the finance sector to the point where it is choking the life out of our economy and society. So, it is disappointing, to say the least, to see how quickly this crucial issue, the centrality of which has been brought into sharp relief by the Barclays rate-fixing scandal, has been railroaded into a somewhat esoteric debate about what kind of inquiry to have.
I can only conclude David Cameron has something to hide from his failure to accept Ed Miliband’s demand for a full public inquiry. Were it to be in his position, I would have happily accepted Mr Miliband’s suggestion safe in the knowledge that this inquiry would set the cause of sweeping reform on the road to nowhere. In other words, it would have been the easiest thing in the world to kick the issue into the long grass; contrary to what proponents of the full public route suggest, there is utterly no reason such a thing would lead to substantive change and provide ammunition for better legislation. As Shibley Rahman puts it:
There have been numerous inquiries in recent history, including the Saville Inquiry, the Chilcot inquiry and the Leveson Inquiry. It is far from certain whether these inquiries lead to enforceable end-points, let alone interesting and relevant law, and possibly are implemented to play for time and allow a political buffering space.
The remit of public inquiries tends to be retroactive and narrowly defined and they rarely have enough scope to consider the whole range of issues that necessarily require consideration to effect a fundamental change; that is of course, unless you are prepared to conduct them for a considerable span of years, at considerable cost and are prepared to accept that by the time they report the momentum for change is 99% of the time totally lost.
Indeed, this issue has already been lost in the mania of both Party leaders to score political points and the real debate about the change we need simply has been asphyxiated at birth. A public inquiry may well shine a light on endemic issues but simply don’t lead to the radical change necessary. Radical change is necessary and it simply isn’t a cultural issue, it’s a structural issue because structures breed cultures, not the other way around. Would, for example, giving the Financial Services Authority (or even the Bank of England for that matter) shiny new regulatory powers really change the culture outlined here? I doubt it very much. Regulation operates mainly post-factum, as such, merely proposing ‘tougher regulation’ is a political trick played in pursuit of the grand goal of appearing to be very busy while in actual fact doing sweet FA.
Be under no illusions. We have a structurally degenerate banking system which has produced a morally degenerate, grasping, culture. Now what we need is political leaders with the courage to grasp the nettle of this simple truth and propose the kind of radical changes we need to see, like the break-up of the banks, like short-term nationalisation as a stepping stone to long-term mutualisation. Currently, neither David Cameron nor Ed Miliband are doing that (each for their own reasons) and that is a shame because it suggests to me that neither are serious about making the neccessary changes to prevent another scandal like the Barclays one.