Secret bosses of the world? The tendency to see banks and bankers as the source of all evils (or almost all) is not a recent phenomenon. More cultivated observers than I have pointed out that, staying in our times, Bertolt Brecht wrote that “founding a bank” is a more serious crime than “breaking into a bank”; Ezra Pound cursed, in verse, naturally, what he called the Usurucracy, in other words the reign of usurers (whom Dante had already placed in hell); according to a more recent columnist, bankers are the “secret bosses of the world, who determine everything that happens”. But banks are not always damaging; back in the day, they paid for the discovery of America and, more recently, the rise of the automotive industry and many other important achievements. Yet there is no question that in recent time, the globalisation of the financial markets, the development of tax havens and technical progress have had a considerable role to play in European and global difficulties.
A complicated separation. In my ignorance, I tended to simplify the distinction between useful, and therefore positive, banking activity, and deplorable, or at least questionable, activity: the former funds economic activity, the latter grows fat on speculation. It is vital to draw a distinction between these two activities and to act as a consequence. However, the reality is more complicated; the distinction has its disadvantages and even the chairman of a bank in the former category can abuse his or her prerogatives, for example with unacceptable severance packages. In a recent case, the head of a bank had made such a mess of all operations that his departure became inevitable; but his contract was so watertight that he was entitled to astronomical levels of compensation, which was paid to him, at the expense of savers or the public coffers, which were obliged to intervene. As for the business banks, which speculate on the markets, when they get things wrong with their operations, they reveal them, speaking out against the abusive behaviour of operators lower down the chain, who of course acted on their own initiative, without following the rules; in order to be made public, the loss has to be astronomic; this makes us wonder how many similar speculative operations succeed and what profit this makes the bosses who claim to be ignorant of their existence; but the balance sheets of certain banks speak volumes...
In spite of everything, the banking organisations continue to criticise the tendency to oblige them to increase their own funds. Jean-Claude Juncker, president of the Eurogroup, said that the states which bail out the banks should take a seat on the decision-making boards of the establishments they support in this way and receive profits from their capital stake; and he added: “it makes people crazy to see their governments handing money over to banks” (EUROPE 10473)
Between truth and myth. There is certainly a good dose of myth and exaggeration in what we read and hear, which is quite similar to the myths which once surrounded Freemasonry and other similar groups, replaced these days by the Trilateral Commission of Rockefeller or the Bilderberg group, which exist, but whose power and mysterious nature have no doubt been overstated. It is certain that deserving banks exist, which are above reproach. But how can we contest the presence of harmful, abusive and amazingly selfish behaviour? When we think of certain unbelievable stock options, short-selling and short-purchasing, etc. The general observation seems to be that the more certain categories of financiers win out, the more the public finances lose out.
Race against time? I am not stating anything new, the above is well-known - I have simply tried to put together a summary to add to my comments in this section yesterday. In theory, the wherewithal to correct the situation exists, the EU has amply reacted in the right direction. The institutions have drafted a considerable number of instruments to bring in the appropriate levels of discipline - and approved many of them. Some aspects are under discussion, others are controversial. Every day, our Bulletin announces and explains new initiatives of the European Commission, relating to the creation of eurobonds and the requirement for budgetary balance for the member states; the separation between the two categories of banking activity is officially being examined. It is largely a question of timescale, a race against time: will the remedies be available and up and running soon enough? (FR/transl.fl)