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Thread: Why do governments allow the banks to behave as they do?

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    Politics.ie Member Disillusioned democrat's Avatar
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    Default Why do governments allow the banks to behave as they do?

    All across Europe and North America governments have allowed banks destroy their citizens lives time and time again in a business cycle as old as capitalism and seem to collectively shrug their shoulders and ask - "what do you expect us to do about it?".

    That the CEO of a failed Irish bank that 24 months ago needed tax payers money to survive earns 4 times the salary of the Taoiseach and gets to do the 2 finger wave in relation to salary caps goes a long way to demonstrating the contempt banks have for governments, but more importantly the complete lack of authority governments exert on banks.

    These banks have systematically worked through Europe bringing more destruction than an invading army, but ultimately bar a few casualties at lower and middle management the big guys are still either pensioned off with golden parachutes or still calling the shots.

    I know governments and banks shouldn't mix and governments need to leave the "free market" alone for it to work properly, but it seems no matter what they do it's tails I win, heads you lose for the bankers and the only loser is the tax payer or bank customer. Now the trust in banks has hit a new ebb that may well destabilize the global economy at a time when growth is very much required, but still government seem powerless to intervene to protect their citizens.

    Simple question - why?
    The more things change....

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    Politics.ie Member tigerben's Avatar
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    I wondering why we elect governments , pay them , advisors and drivers, when it seem s it's the bankers are running the country and making the rules.

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    Politics.ie Member ger12's Avatar
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    Lack of courage and too tied to vested interests.
    At 12 weeks the “clump of cells” toes curl, her mouth makes sucking movements, she has a human face and if you prod the tummy she will move in response

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    Politics.ie Member Lúidín's Avatar
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    Maybe we should look at governments as the agents of the banks and not the other way round. Government Ministers and leading bankers belong to the same group in society and act in their mutual interest.

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    Quote Originally Posted by Disillusioned democrat View Post
    All across Europe and North America governments have allowed banks destroy their citizens lives time and time again in a business cycle as old as capitalism and seem to collectively shrug their shoulders and ask - "what do you expect us to do about it?".

    That the CEO of a failed Irish bank that 24 months ago needed tax payers money to survive earns 4 times the salary of the Taoiseach and gets to do the 2 finger wave in relation to salary caps goes a long way to demonstrating the contempt banks have for governments, but more importantly the complete lack of authority governments exert on banks.

    These banks have systematically worked through Europe bringing more destruction than an invading army, but ultimately bar a few casualties at lower and middle management the big guys are still either pensioned off with golden parachutes or still calling the shots.

    I know governments and banks shouldn't mix and governments need to leave the "free market" alone for it to work properly, but it seems no matter what they do it's tails I win, heads you lose for the bankers and the only loser is the tax payer or bank customer. Now the trust in banks has hit a new ebb that may well destabilize the global economy at a time when growth is very much required, but still government seem powerless to intervene to protect their citizens.

    Simple question - why?
    1. Banks cannot be allowed fail because of the effect that would have on the economy. 2. Banks operate in the free market. These two facts are not compatible.
    Firstly the retail banks should be nationalized, or at least government run banks should be created, that will provide an alternative to the private sector banking that has proven itself incompetent and untrustworthy.
    But this is not enough, though many believe it is, because investment banks control finances such as pension funds, so the same approach will be required as for the retail banks.
    This will provide choice between private and public banking - and those who opt for the private banks should be exposed to the full rigors of free market capitalism, no bailouts, no recaps, no guarantees.

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    Politics.ie Member Disillusioned democrat's Avatar
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    Quote Originally Posted by tigerben View Post
    I wondering why we elect governments , pay them , advisors and drivers, when it seem s it's the bankers are running the country and making the rules.
    Seems like it - the simplest solution to the banking crisis would have been to create a new bank, new bank license, capitalized by the government instead of the stupid bank guarantee and bailout and culd have been up and running in a matter of two months to secure deposits and provide loans, allowing the bad banks to fail.....instead our government rowed our money and future in behind the bankers who had been lying to us for years and committed my, and my kids future to keeping the zombie banks alive by sucking the k=life out of our economy.

    A fool could have foreseen the inevitable, but the government sleep-walked us into this without a whimper. They're doing fine, the bankers are doing fine, but the country is ruined.
    The more things change....

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    Politics.ie Member Disillusioned democrat's Avatar
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    Quote Originally Posted by Sailor View Post
    1. Banks cannot be allowed fail because of the effect that would have on the economy. 2. Banks operate in the free market. These two facts are not compatible.
    Firstly the retail banks should be nationalized, or at least government run banks should be created, that will provide an alternative to the private sector banking that has proven itself incompetent and untrustworthy.
    But this is not enough, though many believe it is, because investment banks control finances such as pension funds, so the same approach will be required as for the retail banks.
    This will provide choice between private and public banking - and those who opt for the private banks should be exposed to the full rigors of free market capitalism, no bailouts, no recaps, no guarantees.
    I completely agree with that sentiment.

    Outside of state run "retail" banks NO bank should ever have been allowed to become systemic or too big to fail and NO private bank should ever have been baled out.
    The more things change....

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    Quote Originally Posted by Disillusioned democrat View Post
    Simple question - why?
    Simple answer - money.

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    Government licenses banks to trade. Governments are there to regulate the industry. They dont. Why? Well governments get all the money they want to deficit spend. imho 'too big to fail' banks and derivatives particulary should be outlawed as well as the fractional reserve banking model and domestic community banks with no licence to invest or speculate on the market, with lending practices exclusively based around a solid deposit base should only be licensed to accept retail deposits.
    Fianna Fail - The Anti Democratic Party & The Anti Constitutional Party. Traitors of Irishmen and Irishwomen.

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    Politics.ie Member Disillusioned democrat's Avatar
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    Quote Originally Posted by EUrJokingMeRight View Post
    Government licenses banks to trade. Governments are there to regulate the industry. They dont. Why? Well governments get all the money they want to deficit spend. imho 'too big to fail' banks and derivatives particulary should be outlawed as well as the fractional reserve banking model and domestic community banks with no licence to invest or speculate on the market, with lending practices exclusively based around a solid deposit base should only be licensed to accept retail deposits.
    You're probably right about that - so it's a double blow to the tax payer because (a) governments overspend and (b) banks get to fail and be bailed out by the tax payer.

    If governments spent within their means and transparently had to raise taxes to fund incompetence they would be far more cautious with our money AND be able to regulate banks, so the tax payer would be far less likely to be called on to pay on the double.

    We need a government with the balls to live within budget and regulate banks.
    The more things change....

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