How to escape the law - be a Banker! (Editorial)

One law for the rich and one for the poor.

You would have thought this applied sometime in the Victorian Age, or perhaps before it, but it seems that it is still true today and not hidden but RIGHT IN YOUR FACE.

If the Government had not bailed out some of our major banks they would have gone bankrupt and no doubt the subsequent investigations by the Official Receivers, Accountants and Tax Officials would have blamed the collapse on the incompetence of those in charge, namely the Directors and Executives.

They would have found too that the assets of the banks involved were falsely inflated and that the official accounts were thus equally untrue, This fact is now obvious as these banks do not have the required collateral to cover the current liability let alone those which will crawl out of the woodwork over the coming month and years. Knowingly trading when a company is insolvent is an offence.

If this had happened to any other company the shareholders would loose everything and the directors banned from involvement in any other company for many years, that is of course if they had escaped gaol for fraud. But did that happen to the bankers? No!

What they get is a huge pay-off either as a bonus or a massive pension the scale of which the rest of us can only dream of.

There was absolutely no need for this to have happened. The banks could have been left to fail and thus fall into the hands of the Official Receiver, the Boards of Directors would have been shown the door pending potential legal actions by various authorities and then and ONLY THEN the Government could have stepped in to pick up the accounts of the banks customers, they could have simply been transferred to remaining banks or event the Bank of England.

We, or a committee acting on behalf of the Government, would then have been able to pick and choose which accounts they wished to save and which could remain with the Official Receiver to fight over the bones. We then would not have ended up still paying the incompetent "fat cats" these ridiculous salaries, bonuses and salaries.

The Government says they did it to protect us. From what? and Who is us? The majority of the staff of the banks involved are still going to be made redundant, it might perhaps just take a little longer. We still cannot get a mortgage and small businesses are still failing by the minute through lack of available funds. The only people who seem to have been protected are the rich and the "fat cats"

Perhaps there is a lesson here for the future, that an official body, perhaps part of the Insolvency Service, be standing by to cope with major situations such as this with an agreed battle plan in place, backed if necessary by changes in legislation. The very minimum of which should be the immediate suspension of everyone involved that had an executive position in the organisation involved and that must include every other organisation that they are involved with too. Accounts under a certain limit, that is those of the General Public, should be immediately transferred to another bank with others following subject to strict conditions.

Stop BOOM and BUST.

It does not require much of a brain to figure this one out. All we need is to set different interest rates by law. All lending must then be charged within the limits set by the applicable interest rate band.

There should be one rate band for long term corporate borrowing, one for short term corporate borrowing, one for domestic mortgages and one band for personal unsecured borrowing. It should be illegal to lend money outside these defined bands.

Rate Examples:

• Long term secured corporate borrowing 2% - 4% above base rate
• Short term secured corporate borrowing 4% - 6% above base rate
• Domestic Mortgages/Unsecured corporate 6% - 10% above base rate
• Unsecured Personal borrowing 10% - 15% above base rate
  

The Chancellor could then control inflation by adjusting the various bands (with emphasis on the later) in relation to the base rate set by the Bank of England. In this manner the lending rate could be increased on personal borrowing, that is credit cards and loans, or even mortgages but not on long term corporate borrowing. This means inflation could be controlled without stuffing up the businesses trying to sustain the nation.

An additional benefit of this type of solution is that it would be illegal to overcharge customers for a particular lending type.

We need a fiscal policy designed to maintain stability in the long term, one that protects all the people of the nation not just a few.