Growing fears over another bank crash

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THERE were renewed calls yesterday by Barack Obama, Gordon Brown and other political leaders of major capitalist countries for international cooperation to tackle the financial crisis and introduce taxes on banks.

In the US, Obama is clawing back government funds put into the banks in the wake of the October 2008 bank crash, with plans to sell off the state’s 27% stake in Citigroup and make a small contribution to reducing America’s record $1.4 trillion 2009 budget deficit (10% of GDP).

In Britain, addressing the Commons Treasury Committee yesterday, Chancellor Alistair Darling was challenged over imposing a new tax on banks. He said that such a tax ‘must be international’ otherwise banks would quit Britain.

He then turned on other members of the European Union. He said: ‘I am frustrated by the lack of movement in Europe. It would be wrong to say there’s been no change, but in places it has been sclerotic.’ He said they were not doing enough to change their banking sectors and get their economies growing.

What Darling was forced to acknowledge is the cut-throat competition between the banks and other major capitalist institutions in the different nation states, which are engaged in conflicting courses of action.

While Obama is selling off the 7.7 billion shares acquired in Citigroup, which cost $25bn out of the US government’s $700bn Troubled Asset Relief Program (TARP), in Ireland the government is expected to increase its stake in the banks, fearing they are heading for a further collapse.

The Irish government has already taken over completely the Anglo Irish Bank, has a 25% stake in the Allied Irish Banks and owns 16% of the Bank of Ireland. The Irish government plans to increase the state ownership in the Bank of Ireland and Allied Irish Banks and shift more ‘toxic debt’ into the National Asset Management Agency (NAMA), the so-called national ‘bad’ bank this week.

While Brown’s government was ruling out a unilateral tax on banks in Britain when the Chancellor spoke to MPs yesterday, last week Angela Merkel’s German government approved a levy on financial institutions there amounting to billions of euros.

The International Monetary Fund (IMF) has been asked by the G20 group of the world’s biggest capitalist states to come up with a plan for banks to contribute to insuring themselves against failure. This amounts to a call for a plan to deal with chaos and collapse!

Capitalist anarchy, and the dog-eat-dog activities of the banks and major financial institutions, which are heading for more collapses, are not subject to international control and planning.

The world slump, where production has dropped by more than 10 per cent in most countries over the past two years, has not been reversed, but is about to deepen. The latest figures from Japan show a further 0.9% drop in industrial production in February.

There is chaos, but the capitalist ruling classes do have a strategy to deal with this crisis. It is not about new regulations, it is to make the working class pay through mass unemployment and huge cuts in living standards.

The international working class needs its own strategy to answer the capitalist crisis and, at the centre of this must be the expropriation of the banks, and through workers’ control and management, using these funds to build a socialist planned economy.

In Britain, the latest sick joke to be played on workers and millions of middle class people is that their taxes are to be used to help pay the £28.6m fine for price fixing loans imposed on the RBS bank, which is 70% state-owned.

Most British banks only exist today because £1.2tn of working people’s taxes were used to bail them out. So all the major banks and financial institutions must be nationalised, without compensation.

It is clear that the Brown government is doing everything to prop up the banks at the expense of the working class. It must be replaced by a workers government that will expropriate the banks to fund a socialist planned economy to provide jobs and decent living standards for everyone.