It’s 2015, not 2008. Let’s make RBS work for us.

June 10, 2015

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Photo: Sean MacEntee

Photo: Sean MacEntee

This week the UK’s biggest banks were given record fines for fraudulent and criminal activity, intimidated the government for reductions to “burdensome” regulation, and announced mass branch closures to feed their investment banking arms’ thirst for capital.

You’d be forgiven for thinking it was 2008, not 2015. We’re seven years on from the biggest banking crisis in a century, yet precious little has changed with Britain’s broken banks.

They’re still too big to fail (and getting bigger). They’re still causing job losses and refusing to invest in our businesses and regions. And they’re still profiting from financial crime, receiving fines so paltry as to be essentially ineffective.

In many ways, Britain is now more vulnerable to a financial crisis than before, not less.

Surely if the banking crisis has proven anything, its that this model of huge, “universal banks” is one that’s designed to fail. Ultimately, peoples’ savings, pensions and debt should not be on the hook for risky casino investment activities.

It’s even failing on its own terms, as recently admitted by The Economist, whilst continuing to crush small businesses and exclude people from the financial system – the exact opposite of what the banking system is supposed to do.

Given all the issues with these massive, universal banks, you’d think the government would be doing anything and everything in its power to reform them. In fact, given that we already own one, there are actually some pretty significant opportunities to do so.

Osborne Firesale meme

Yet in an obscene turn of events, George Osborne is now pledging to return the taxpayer-owned bailed-out bank RBS back to the very people who caused the financial crisis in the first place.

To make matters even worse, he’s planning to flog it off at knock-down rates, despite promising merely months ago not to do exactly that. It not only comes across as self-serving and hypocritical, it also makes very little economic sense.

Even the head of the Institute of Fiscal Studies, one of the most respected economic free-market think tanks has said that selling off taxpayer’s assets does nothing to help the government deficit. SME lending, on the other hand, has a very big impact on the deficit indeed, so why isn’t it being dealt with more strongly?

Meanwhile, RBS has been been proving its inability to support the British economy all by itself, crushing small businesses for its profit, and withdrawing from people and communities that rely on its services.

With massive, universal banks failing so abjectly to provide any of the functions we require of them, practically giving away our own for little discernable benefit is more than just a dereliction of duty. It’s an outright scandal.

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Move Your Money is partnering with SumOfUs and the New Economics Foundation to demand an end to the RBS firesale. Add your voice by signing the petition here.

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Tyrie meme

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