The recent takeover of Credit Suisse by UBS, with the Swiss state stepping in to cover losses, highlights the need to socialise the financial sector, says Movement for Socialism.
banking and financial system
After Commissioner Kenneth Hayne released the banking royal commission’s interim report in September, many of the headlines and takeaway quotes focused on its claim that banks “put profits before people”.
“Why did it happen?” the report asked. “Too often the answer seems to be greed — the pursuit of short term profit at the expense of basic standards of honesty. How else is charging continuing advice fees to the dead to be explained?...
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The tribulations of major European banks, starting with “venerable institutions” like the Monte dei Paschi di Siena (the world’s oldest bank) and Deutsche Bank (Germany’s largest), have raised the spectre of a repeat of the crash of 2008 — a “Lehman Brothers times five” in the words of one market analyst.
Deutsche Bank has been found to be seriously under-capitalised, both according to the standards set under the Basel III international bank regulation standards and according to its own targets. The same goes for British giant Barclays.
The federal government's much-vaunted parliamentary inquiry into the banking system was correctly called "a farce" by Labor MP Pat Conroy on October 4, the first day of a three-day hearing in Canberra. Conroy said: "I have two days of questions here" but no time to ask them.
The inquiry was an attempt by the government to deflect growing calls for a royal commission into the banking system.