Last Friday, Mervyn King, Governor of the Bank of England, issued a dire warning that Britain risks another financial crisis unless the government introduces reforms of the banks.
In an interview with the Daily Telegraph, King claimed that, ‘We allowed a system to build up which contained the seeds of its own destruction.’
He went on to bemoan the state of the financial system where the banks are ‘too big to fail’ and consequently carry on in the same reckless fashion, secure in the knowledge that in the final analysis the state, that is the taxpayer, will bail them out when they collapse.
King characterised the banks as being only interested in short-term profit.
This, he said, led to banks destroying companies with their obsession with takeovers and seeking to make money out of ‘gullible or unsuspecting customers’.
King’s remedy for the ‘imbalances’ of the capitalist banking system is simple – split up the banks between investment and retail banks.
Retail banks would be the nice ones on the High Street looking after personal savings, while the investment banks would be entirely separate and run by the wild-eyed speculators gambling their all for huge profits or losses.
The banks were naturally swift in putting King in his place describing his criticisms as ‘superficial’ and ‘outdated’, with some calling for Cameron to sack him out of hand.
The biggest rebuff for King, however, came with the announcement that the giant HSBC bank will now almost certainly move its headquarters from London to Hong Kong, citing the restrictions placed on the banks by the coalition’s ‘Project Merlin’ deal.
This was the supposedly strict new rules placed on the banks by the government in the face of public outrage over the huge bonuses paid out to bankers at the centre of the financial collapse.
In fact this ‘deal’, allegedly imposed on the unwilling banking system, was laughable.
All it did was request that banks lent more to small business and not dole out millions of pounds in bonuses.
No penalties were involved for banks ignoring these polite requests.
Even this, however, has proved too much for the HSBC.
As far as the banks are concerned the role of the Governor of the Bank of England and the government is one of complete servility to the requirements of finance capital and the banks.
What King really fears is that British capitalism is heading for a crash that will dwarf anything that has gone before and the revolutionising effect that this is already having on the working class.
On a number of occasions, King has expressed his amazement that workers, whom he acknowledges did not cause the crisis but are being forced to pay for it in wages, jobs, pensions and the entire existence of the welfare state, are not expressing more anger at the bankers.
What is giving him nightmares is that instead of venting anger against individual ‘greedy’ bankers, the working class is rapidly developing an understanding that the entire capitalist system needs to be brought down and replaced with a system of production based not on private profit but on human need.
What is occurring in the working class is much more profound than an outburst of anger against individuals, they have been forced by the crisis along the road of revolution that will put an end to the capitalist banks once and for all.
The urgent requirement today is to build a revolutionary leadership that can match up to this situation and lead the working class to power and the establishment of socialism.
That leadership is the Workers Revolutionary Party. Join it today!
