A superb article by Aditya Chakrabortty of Guardian.
He says the Libor rigging crisis provides UK a second chance of reforming its financial sector. The first came post Northern Rock/Lehman failure in 2008 which was just withered away.
In the wake of the Lehman’s collapse of 2008, there was much talk about how the relationship between state and finance would be changed in the public interest. Those efforts were effectively killed off by the finance lobbyists and, if we’re honest, the unpreparedness of progressives in Britain to seize the opportunity. The Libor scandal offers a second go at the same argument. We either have it out this time, or we run the risk of repeating 2008. Only next time, the British might need to cough more than 20 grand each. A lot more.
This 20 grand bit is based on analysis which shows each UK citizen has paid nearly GBP 20,000 as support to the financial sector:
We don’t know each other, but I want to offer you a deal: You each give me £20,000. And that’s it. What do you get in return? Well, it’s a fair question but I can’t even promise to pay it all back. But let me assure you of this: your hard-earned cash will keep me in the style to which I’m accustomed. And that’s got to be good for all of us. So I’m sure you’ll agree that 20 grand is an absolute bargain. Indeed, I would call it a once-in-a-lifetime offer; only I can’t promise not to come back again.
You’ve probably guessed that the transfer I’m talking about has already happened. Each man, woman and child in Britain has already handed over £19,271. And our money has gone to the banks.
According to the IMF, the British stuck £1.2 trillion behind the finance sector. Read that again: well over a trillion pounds in bailouts, and loans and state guarantees on bankers’ trading.
In just a few months, and with barely any public debate, every household subbed£46,774 to the City. A sliver of that money eventually went unused; as for the remaining hundreds of billions, we have no idea just how much we’ll get back – or when.