When a similar Summit was held in London a few years ago, City trader-types thought it was funny to photocopy money and lob the copies out of their office windows along with bars of soap at the mass of protesters below. It caused an angry reaction which resulted in a good deal of property damage.
This time around, Banks have sent around internal memos urging restraint and recommending that employees should turn up to work today and tomorrow in casual clothes for fear that besuited people will be automatic targets of the wrath of the protesters on their way to the G20 Summit at ExCel in Docklands.
How strange it is that the very people upon whom the traders poured scorn and fake money the last time around are the very people who have pledged real money over the next 30 years in taxes in order to save their very careers.
A modicum of humble pie would not go amiss.
Our Hopes
After Gordon Brown's rather forlorn round the world trip on a mission to nothing, G20 kicks off for real tomorrow and Brown has reassured us all that there will be a broad consensus on the strategy and actions in order to lead us out of the financial chaos we are in. The likelihood of getting such a general agreement was dampened when the French threatened to walk out of the Summit before it had begun as they disagree fairly diametrically with the UK and US approach to the problems faced. It is good news that President Sarkozy is on his way now, hopefully with the lovely Carla in tow.
As much as we all may be angry with how this disastrous situation has come about and however much we may disagree with the enormity of some of the solutions, the one thing I am sure we would all hope for is a broad agreement on what to do about it.
Gordon Brown refers a lot to Protectionism and I think he needs to be clear about what he means here. On the one hand we are concerned in Britain that British jobs were taken at places like Lindsay Refinery and on programs like 'The Apprentice' there is a definite swing toward doing things to support British business; we also need free trade between borders in order to help get our economy ticking again. But that isn't necessarily what the PM means - he wants more flow of capital and credit into the British economy as literally hundreds of billions have been withdrawn from our money markets in recent months and lending has dropped sharply. It's lending to other banks, of course, but he wants to get that into the wider economy to fuel more accessible mortgages and resurrect the housing market. This is what fuelled our economy over the last 12 years and the PM wants to reset the clock to August 2007 to get it all back to normal.
I don't think that will be achievable. Every country has a duty to get its own house in order and some have suffered more at the hands of the global markets than others. President Obama wants a global response but he was clear in his bail out directives on capital projects - American construction, American steel, American labour. He would have been stupid to have said anything different.
What we would all like to see as well is some kind of global consensus on how banking should look for the future. It is more than clear that the system was not just broken but it was flawed from the beginning - it needs radical change and a re-focus on the core duties of banks which is to provide capital and credit. We would like to see more active, watchful and powerful regulatory authorities which have a global remit to not just monitor wrong doing but to look at business models, profiteering, bonuses and business ethics to ensure we do not have the sleepy old yes men of last time. It is a tragedy that our FSA is being remedied by the same executives who presided over the mess we are in - we need new people, fresh ideas and a commitment to facing banks down not pretty words.
No matter what Lord Turner and Hector Sants say, the FSA had all the remit to tackle banking previously - they just chose to ignore what was going on.
Transparency is a word I like. I would like to see a more transparent banking system that we can see and understand. That people invested in banks in Iceland is all very well but they should have a clear view of how these banks act and what risks there are. How we do that? I don't know but it is tragic that the 300,000 or so investors at Dunfermline Building Society had no idea their savings and investments were at risk through the suicidal business activities of the society's executives. Somehow we need to see that.
Transparency means Government and Public Service too. We have been disgusted locally over the state of public servants' ethics and it is time we got a clear view what our elected and unelected officials get up to, who pays them outside of us, how they spend our money, why they pick fights with other countries and how they account for failure.
The last year has brought into sharp focus the difference between responsibility and accountability at the top level - not one senior politician has accepted the accountability for the actions or inaction.
The culture of greed has almost destroyed us - it is even apparent in the music of the young. We have become a 'must-have' society and it has made us all spend far beyond our means. We have been invited to leverage our assets to produce more money which has fuelled a frenzy of profiteering and a bonus culture which has literally driven us to the point of ruin. It would be something if we could get the G20 countries to agree that the bonus culture at the top end is curbed which will lead to more sensible lending - it means a reduction in personal debt is a priority rather than enticing us to grab the money being pumped into our economies to increase our borrowing.
That has to be suicidal.
Our Fears
The worst that can happen is that the G20 countries walk away with only a statement which does not address any of the above but that they issue some carefully worded platitudes which really mean there was no agreement on anything. The next few months could be crucial for us all and we need these people to agree on at least one course of action in unison - perversely, even if it is the wrong one.
I fear that the G20 group will look upon the protesters and believe they are not representative of a wider opinion. We all deplore mindless violence and unpeacful protest - the whole protest is at risk of being hijacked by those looking for a fight. But this time round, there is a profound and fundamental opinion pervading in our society that believes that much of what we see today could have been avoided and that it was the very people who are assembling in London who slept on the job to ignore the signs. With due respect to new guys like Sarkozy and Obama, our fear is that we aim for a return to the status quo and not to radically change our system so that this cannot ever happen again. Without tackling this, we will be cursed with more booms, followed by ever increasing troughs.
If, in 3 or so years time, we are all remortgaging to leverage regrowth in our assets, then G20 will have failed. We must find a way to get back to sensible borrowing based on household income and avoid the lunatic lending of the last 12 years.
The problem with capitalism is that it is great when things are going well - we talk of honourable projects like reducing carbon, funding new projects to find fuels and materials that will conserve our resources and of helping others less fortunate than ourselves. The moment capitalism fails, it tries to patch itself up at any cost. There is a huge risk that all the good work to drive environmentally based projects and awareness will, at worst, dissipate and, at best, get set back years as we clamour to pump precious capital and money into a system that failed us so badly at the cost of all else.
The cries of the developing world have been drowned out by the siren calls of international rescue packages designed only for developed countries. At a recent African Nations Summit, the theme was that Africa did not cause this problem - it did not bring down the banks or financial system. Its problems have remained constant while we fly around our cliquey groups, mustering resources and taxpayers' money to rescue the few elite people many of who were personally richer than the combined wealth of millions of African people.
My biggest fear is that we consume far, far too much of our money saving a few rich people at the cost of a generation of Africans desperate for our help.
Humble Pie
I have talked of the banking community viewing the protesters very differently from before. This time round, real money in tax pledges have saved the necks of the arrogant people who threw the photocopies of cash out of their windows. Today and tomorrow, they will avoid eye contact and being recognised by the protesters for fear they may get a piece of their mind - and it would probably not stop at mere words.
My biggest hope is that we will have a banking system that breeds people with sense, compassion and real purpose instead of self-seeking, greedy, arrogant and repugnant people who in the face of losing billions still feel they are owed millions. I hope that the current crew not just eat some humble pie but that they remember in future that it is our money and our future with which they play. Accountability, going forward, should be the watchword and next time around let us all hope that the law helps us redress any excesses instead of mere moral indignance.
I hope, perhaps unrealistically, that the G20 Summit will be a platform from which the world will change for the better. I don't expect it overnight but some time in my lifetime is not too much to ask.
No comments:
Post a Comment