A “religious war?” The controversy surrounding the behaviour of the banks and what regime should be imposed on them has almost taken on the appearance of a religious war, not only in the sectors affected and amongst the different pundits, but also among the political authorities defining the guidelines and making the decisions. In the EU, criticism of the banks made by the French president Nicolas Sarkozy and Italian minister Giulio Tremonti has often been harsh and the measures they advocate are radical. Nor are they the only ones - we haven't mentioned any of the different political movements. The substance of the measures outlined is sometimes very complex and for those who do not have a specific financial culture, the significance and detail is not easy to understand; quorum ego, I count myself, a priori, amongst the uninitiated. The different points that follow are therefore addressed to the non-specialists among us.
I believe that it is possible to summarise the main points in two sentences: certain authorities consider that bankers should totally abandon the purely financial manoeuvrings that have too often enriched to inadmissible proportions those responsible for them, and that have led to the disasters of which we are only too well aware. On the other hand, most of the banks demand the freedom to act as they deem fit, possibly with enhanced rules, the moment they stop taking the public aid they have largely benefited from in order to overcome the crisis. It is therefore not just a question of rules, precautions and limits to introduce with regard to excessive bonuses, but also a question of establishing whether banking should be brought back to the essential role it is supposed to fulfil of using the savings it receives to finance productive activities or, on the contrary, if it should be allowed to re-embark upon speculative ventures and other manoeuvrings that enrich a few people at the expense of the economy in general. I didn't come up with this idea by reading the revolutionary press or learn it from political extremists. Neither Mr Sarkozy nor Mr Tremonti, as mentioned above, is regarded as a far Left revolutionary. The most negative description of speculative financial activity I heard was in a speech by Valéry Giscard d'Estaing, who regards this activity as being akin to producing counterfeit money. In his opinion, nothing distinguishes the activity of certain bankers from that of forgers who make false Euros or dollars and who would now like to start up again!
Support for common principles. Member states do not share a common position, which is understandable because the importance of the finance sector varies from country to country and city to city. Ms Merkel, Mr Sarkozy and Mr Brown, however, managed to define a number of principles which, in their opinion, constitute the EU's “strong and common message” for the next G20 summit in Pittsburgh. They are calling for the financial markets to be organised in such a way that it makes any new crisis impossible by transforming a number of principles into compulsory rules: remuneration in the financial sector; governance; transparency; speculation activity; counter measures against non-cooperative countries to be implemented from next March. The measures outlined must be accompanied by further global economic cooperation and involve rapid reform of the IMF and World Bank.
Most banks demand autonomy. The banks have not exactly built any barricades in opposition to the reforms but their attitude, particularly in the US but also in some places within the EU and elsewhere, effectively demands autonomy when engaging in financial practices and pay policy.
With the goal of re-conquering this autonomy, several banking establishments are currently paying back or proposing to return the financial support they received from the state. Public scrutiny of their behaviour, in their opinion, would be incompatible with the principles of the market economy.
Reasons for specific scrutiny. The response of the authorities in countries in favour of maintaining and strengthening controls can be summed up in a single principle: the guarantees and support, provided by the state to the banks to prevent them going under, justify a scrutiny that would be unthinkable in other domains where companies are free to go bankrupt and disappear if they are badly managed. The failure of the big banks would have led to unacceptable consequences at the expense of savers and the general public. The authorities and public bodies (such as the European Central Bank) rushed to their assistance to prevent this meltdown: this constitutes a special situation that requires special scrutiny. There is now a trend towards correcting the excessive dimensions banks have assumed and which make it impossible, in practice, for them to go bankrupt because of the repercussions this would create. According to this thesis, banks that have become too large should be dismantled by separating up the different branches of their activity.
(F.R./transl.rh)