Published: September 20, 2011
Look To The Swiss, Mr Cable.
Yesterday’s rather pathetic speech by Vince Cable demonstrates once again that British politicians – even those who appear to be critical of the banks – are, in reality, working for them. Rather than coming onto the Liberal Democrat conference platform and telling the truth, Cable lied his way through his half hour speech. He claimed for example, that the legislation arising from the so-called “Independent Banking Commission” provides the means to stop the “dangerous nonsense” of bank profits going into bonuses and banking losses covered by the taxpayer.
If Cable had been telling the truth, he would have told the Lib-Dum conference that the IBC report provides nothing of the sort. The “ring fence” idea so loved by Mervyn King will be utterly impossible to police.
If Cable had been telling the truth, he would have informed the Lib-Dum conference that the only way to guarantee that the “dangerous nonsense” is stopped, is full institutional separation of the banks, as was the case in the USA between the 1930s and the late 1990s.
If Cable had been telling the truth, he would have informed the Lib-Dum conference of the fight on this very issue happening in the Swiss Parliament, almost as he spoke.
The Swiss, in fact, rather than going for legislation requiring separation, were going for a law which simply makes it illegal in Switzerland for a commercial (retail) bank to take part in investment banking operations. The legislation would have forced banks such as UBS to make a decision about what kind of bank they wanted to be, with the Swiss government only providing guarantees to commercial banking credits to industry and savings.
In the event, the fight yesterday was narrowly lost, and will have to be re-submitted in the next Parliamentary session.
Nevertheless, I would say this to Mr Cable – unlike you, no-one in Switzerland in calling for further Quantitative Easing. Ironically, it is in Switzerland that there are politicians who are willing to stand up for their country; to put their country’s needs ahead of the banks. The fight is on in Switzerland. Bring it on here.
Full Glass-Steagall, Mr Cable. Nothing less will do.