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The lack of a proper inquiry into banking catastrophe seems odder by the day

Posted on 21 February 2012 | 8:02am

Am I missing something here? Am I the only one – with the exception I hear of Tory MP David Ruffley – who thinks there should be a full public inquiry into the banking catastrophe?

The thought came to me last night – to be honest it is never far away – watching Newsnight’s reporting of the seemingly never-ending Greece/eurozone crisis. For who should be exposed as being at the centre of the Greek drama but Goldman Sachs, golden boys of the banking world, self-styled masters of the universe?

Their defence for their role in hiding Greek debt – just a billion or two here and there – was basically ‘well, everyone was at it.’ It might just about get them through the embarrassment of a negative Newsnight package. But I would like to see the line tested by judges with powers to subpoena witnesses and call for papers and emails.

The Greece situation does seem to be coming to some kind of conclusion, admittedly not for the first time. None of the solutions are pretty.

It is possible to feel some sympathy for them at the thought of outside technocracts being installed to implement a terrifyingly austere plan. It is equally possible to sympathise with the Germans and the Dutch and all the others who are essentially having to foot the bill for the next bail-out. Where I feel little sympathy is for those European leaders of the political and fnancial establishments who shoehorned countries like Greece into the euro in the first place.

I now realise the terms of my banking inquiry are growing, but that too needs to be properly investigated. What was the purpose of the Maastricht criteria if countries were being welcomed into the euro when those welcoming them knew they had no chance whatever of meeting said criteria?

So back to Goldman Sachs, and the help they gave. Look back at recent economic history, whether sub-prime mortgages, the Global Financial Crisis, and now the Greek disaster in the eurozone, and B-A-N-K-S will be right there at the heart of what went wrong.

And there is to be no proper public reckoning? Really?

PS … thanks for all the nice comments and tweets about last night’s Panorama, and thanks too for the not so nice ones … at least you watched! But after the half hour on booze, tonight is the big one, an hour on bagpipes. First Love, Sky Arts 1, 8pm. I know there’s Champions League football, but this is bagpipes right!

  • Peter Farley

    Absolutely correct Alastair and totally scandalous. Even more so that the two people at the heart of regulatory oversight (or lack of!) during the buildup to the meltdown (Hector Sants as CEO of the FSA) and Mervyn King at the BofE, are now in charge of both the clean-up and the newly formed Prudential Regulation Authority. Just like Goldman Sachs’ role in Greece (and Italy etc..) and the subsequent presence of its alumni at the heart of the doomed Euro rescue and new politico appointees, everywhere we look the foxes remain in charge of the chicken coop. It really needs the appointment of someone completely untainted (or at least not enriched) by the banking excesses of the last decade to be given a free rein at overhauling the system. There are lots of candidates…..but the establishment is never going to let them have a look-in. 

  • You’re right – this is something that’s been playing on my mind too. The problem is, of course, that any inquiry would detract from the govn’s narrative that it was excessive public spending that caused the defecit and not a sudden, unexpected, drop in tax revenues.

    Maybe an ePetition – following an increase in debate about the subject around the media – set up by someone with quite a high profile may result in a parlimentary debate at least?

    Bagpipes on Sky 1 Arts – I think I’m busy hammering 6″ nails into my ears this evening…

  • Ian Eastwood

    Don’t think the suits and the money men would welcome to much digging do you? 
    I think your wrong about the Greek situation coming to a conclustion     they are still kicking the can down the road. 
    The bail out will be like a young couple getting a mortgage guaranteed by there parents. The ECB will pay the money straight to banks and bond holders so they can’t spend it on anything else they believe as non existential’s like schools, hospitals and any other public service.
    Much as I love Greece and the Greek people they, and the likes of Portugal should never been aloud in the Euro.
    Just like the banks it was “not” so cleaver accounting that lead to this mess.
    As you point out in your article Goldman Sachs have a lot to answer for, as is partly explained in the link below.http://www.spiegel.de/international/europe/0,1518,676634,00.html

  • Olli Issakainen

    Who owns British banks?
    Rothschilds control HSBC.
    Before the banking crisis, Rothschilds controlled Lloyds Banking Group through Legal & General Investment Management.
    Now the UK government owns 41% of Lloyds which in 2009 acquired HBOS plc and has brands Lloyds TSB, Halifax and Bank of Scotland.
    Lloyds is the largest retail bank in UK with one in three as customer.
    Chief executive of Lloyds is Antonio Horta-Osorio, who formerly worked for Citibank and Goldman Sachs.
    Directors of Lloyds include Winfried Bischoff who has worked for Rothschild-controlled companies.
    Cleaning costs of Lloyds so far have been £54bn. The share price is currently 35p. Taxpayers bought shares in Lloyds at an average of 73.6p.
    The UK government stake in RBS is 82%. Cleaning cost so far is £38bn. Share price is 27p – taxpayers paid average price of 50.2p.
    Together the cleaning bill for Lloyds and RBS is £90bn. 80,000 jobs have gone.
    Rothschilds also control Barclays. Marcus Agius is married to the Rothschilds family.
    Bob Diamond is according to the annual report of Barclays a member of the Rockefeller-funded Council on Foreign Relations.
    Rothschilds also control all main Wall Street institutions including Goldman Sachs and JP Morgan Chase.
    Rothschilds own the Federal Reserve, and control the central bank of all central banks: BIS in Basel Switzerland.
    Who controls credit rating agencies?
    Yes, you guessed it.
    Standard & Poor´s is a division of McGraw-Hill. Rothschilds control McGraw-Hill through Vanguard and State Street.
    Moody´s Investor Services has a parent company Moody´s Corporation.
    Rothschilds control Moody´s through Vanguard, T. Rowe and State Street. Warren Buffett´s Berkshire Hathaway also has a big stake.
    Fitch Ratings is owned by Fimalac and Hearst Corporation.
    The man behind Fimalac is Marc Ladreit de Lacharriere. He is a member of the Bilderberg Group and close confidant of the Rothschilds.
    He sits on the board of Casino Group with David de Rothschild.
    Credit rating agencies caused huge losses in the collateralized debt obligations (CDO) market by giving top ratings.
    Systematic corruption in the financial sector caused the financial crisis of 2008 and recession.
    Goldman Sachs and Rothschild-controlled JP Morgan Chase hid  Greece´s debt and were paid over $200m for this work.
    Rothschild-controlled Lehman Brothers collapsed in 2008 thanks to illegal short-selling and rumours causing the financial crisis.
    The man who let this company to collapse, Hank Paulson the then US Treasury Secretary, is the former chairman and CEO of Goldman Sachs.
    Goldman Sachs employees now head Italy, Greece and European Central Bank.
    These people are also members of the Bilderberg Group and Trilateral Commisson  – both founded by David Rockefeller who is the former chairman of Chase Manhattan bank.
    David Rockefeller has told Newsweek that he wants big companies to take the power from elected governments.
    Yet elected politicians like George Osborne cannot wait to get invited to Bilberberg Group meetings to discuss strategy.
    We need an inquiry into systematic corruption in the financial sector.

  • Anonymous

    Dear Alastair Campbell,

    You got it bang on in last nights Panorama. Hats off to you for your  obvious huge strength of character – I have also through drinking too much combined with depression pretty much ground to a halt and put my family through some awful times. 

    I just hope I can recover as you have managed!

    GR 

  • reaguns

    I think Goldman Sachs (and others) should be investigated to see if its true that they were telling some people to buy securities (of many kinds) that they knew to be junk. (And profiting from the other side of the trade themselves, or helping closer clients to do so.) That is effectively fraud though I don’t know how you legislate for it, whats next punishing non-german european car makers for building scrap.

    However lets be clear, the part Goldman Sachs played in relation to Greece is miniscule – the main culprits are the governments of Greece and the EU.

    It is all part of the same moral hazard problem of subprime. Banks that ordinary citizens use to deposit, lend out that deposited money to dodgy mortgages, CDO’s and Greek governments. They know full well that a lot of these loans are junk, but they know they have implicit bailout guarantees from governments. Nothing has changed, the banks will keep on lending money to Greece and other risky places because they know that when the loans go bad, the bankers will not be punished, rather the ordinary taxpayers of US, UK, Greece, Ireland will be required to pay back the financiers.

    We must make the bankers take the consequences of their decisions, rather than ordinary citizens.

    There are ways to do this. We haven’t done it hence a number of economists from left and right were able to predict the housing crash / credit crunch in 08, they predicted a sovereign debt crisis would follow if we didn’t solve that, and now they predict that a currency crisis will come next. Robert Schiller, Nouriel Roubini, Raghuram Rajan (who Ed Miliband has supposedly read) and Peter Schiff have all said this I think.

  • reaguns

    As for the program, its a pity it couldn’t be longer. I would like to see AC given an hour or more, to talk to more people, and give us more of a lowdown of facts and figures, and talk about possible solutions or at least improvements.

    Also well done for the honesty about drinking now, and about how AC disagreed with Tony Blair etc about 24 hour drinking. I wish more people in politics would feel free to disagree publicly with the party line. I know AC is partly to blame for this (it was his job), but I would have had more confidence in the labour party of the day if I’d known there were people in it who were against 24 hour drinking, or the euro or whatever else. These single voice zombie parties are unnerving.

  • Michele

    So are British politicians also in the pay of Goldman Sachs?

    What will be achieved by blaming a single company and all its past-employees spread far and wide in Govts and banks around the world.  Is there just a hint of anti-Semitism in all this?

    When the UK was declining the idea of ‘belonging’ to the Euro its political money men (apologies if there were any women involved then too) were part of cover-ups about the accounts of Greece, Portugal and Italy (the latter  hadn’t had any of its Govts in place for longer than 6m over the preceding 50yrs so how could it really have met the accounts criteria?).

  • Michele

    The denomisation of GS has been circulating for years. 

    Are some even here REALLY starting to be onside with this crowd:
    http://www.stormfront.org/forum/t632550/

    Every single story about ‘radicals’, about ‘illegals’ living like rats in attics, every disgusting germ that ends up in the ‘comic’ newspapers starts there.

  • reaguns

    I don’t agree with the bit about the Federal reserve Olli. Its policies have consistently favoured the US government of the day’s objective of getting re-elected at whatever cost. It doesn’t quite do the bidding of the banks though it certainly doesn’t do the bidding of the people. I’m with Ron Paul on this one – end the Fed!

    As for the Rothschilds, one of the famous ones in olden times said “Give me control of a nation’s money… and I care not who makes its laws.”This to me is not so much a warning against banks, but against supra-national financial arrangements such as the Euro. When the EU controls the Euro, it controls the countries in the Euro.

    Its about the one issue I can think of where Brown and Balls were right, and Blair was wrong. I heard Blair on Andrew Marr say lately “The political reasons for the Euro were clear, its just the economics that got in the way.”Ah Tony, I know the feeling, I wanted to be a billionaire “its just the economics that got in the way.”

  • Simon

    Let’s just hope the audience doesn’t get confused and think that furtive bagpiping is the big social problem…

  • Michele

    Your link reports this:
    ………… “The Greeks have never managed to stick to the 60 percent debt limit, and
    they only adhered to the three percent deficit ceiling with the help of
    blatant balance sheet cosmetics”…………….
    but it gives the impression that Greece itself applied the cosmetics whereas it was the EU leaders that made that accommodation.

    Should we suppose they did so in order to absorb and swallow Greece for economic reasons or the ambition for peace and prosperity across the continent ?

    I think the latter.

  • Libdem

    reaguns, you do it by sending them to prison. By their actions they have condemned millions of people to a life of penury. Bailing out banks that should have ‘gone to the wall’. The bankers, the credit agencies, the politicians should all be put on trial for ruining our finances as a nation.

    Regarding the EU, they are in my opinion inherently corrupt as a body apparently more interested in building empires and rewarding themselves accordingly. Ultimately they want to dispose of national government and run everything from Brussels or Strasbourg or Brussels or Strasbourg if they can only make their minds up….

  • Bob-nicassoc

    Thoughtful programme last night. Excellent choice of headwear – warms the heart as well as the head.

  • Richard

    I thought that Panorama was a very useful contribution: however, the presentation showing your endless running, with voiceover was tedious. The TV people should be shot, as such a presentation would have people turning off in droves. Why do they have to resort to polpulist screenplay on such an important subject? Dumbing down of course.

    Your message, eloquence and evidence were brilliant. Re edited as a serious Panorama edition it was a prog which would chime with all of the middle classes. Essential viewing for us all, and for our children and grandchildren.

    Just a thought. At the time when you ( and I) were drinking far too much during working hours, it was an accepted part of the workplace. Since then there is no doubt that the people working in our old jobs have to work far harder, and are under more pressure than we were. The drink culture at work is long dead.

    Accordingly much more of peoples’ pressure release is at home and this was well described in evidence last night.

    We are stil left with the employability prospects of people with alcohol &/or depression.We are light years away from the acceptance of such issues in the workplace, sadly.

    Congratulations on an important piece of work.

  • Michele

     FHS, democracy isn’t democracy is it unless there are varied opinions?

    Do you seriously think everyone in the ‘coalition’ actually does agree with what’s being done …… tory as well as so-called libdem?  If so why do they not all vote to affirm that instead of abstaining so they can affirm or deny in the future as things suit them then, whenever? 

    Tim Farron has been quite open about the sleep-around we can expect according to the offers open and the questions asked at the time.  I hope any offers from Labour will involve STD tests 🙂

    • reaguns

      Another example – there must be Tory politicians on the Libertarian end of the party who are against Workfare – but I hear none of them speaking out.

      Or perhaps they aren’t right wing for reasons of liberty, democracy and all that but are just bitter anti-immigrant, anti-poor, hang-em, flog-em types after all.

  • reaguns

    No I don’t think everyone in the coalition agrees with what its doing, the right wing tories for a start are not happy.

    The point is, how many of the dissenters would go on tv and say they disagree, and how many Labour people back in the day would have done so. For the career politicians not many. This is why I’d like to see open primaries so that MPs have to do their constituency’s bidding not their leader’s.

    By the way did anyone see the love in between Douglas Carswell (tory) and John Prescott yesterday on Twitter, both supporting each other in terms of localism, putting decisions close to the people, maybe even the open primary thing.

  • Ehtch

    Rothschild family has an incredible and amazing history – the period of the Napoleonic Wars especially, very rub chin it was. Wiki has an alright summing up of their history, and most importantly references at the bottom of the page,
    http://en.wikipedia.org/wiki/Rothschild_family

    Trans-global banking doesn’t seem to answer to anyone much these days, and the danger is their abilty to set up chaos for their own gain, increasing their wealth, and be damned the consequences to the common man on the street, it seems. They have little or no shame in profit hunting.

  • Anonymous

    Yes thats one way, the Reagan way, and certainly IF we are going to bail them out and save bankers from financial consequences then there must be other consequences. If not prison then at least heavy fines.

    For the future, I like the Storage Deposit idea put forward by various people for example Andrew Lilico
    and Mervyn King. Removes moral hazard, stops bankers being able to take crazy risks with our money.

  • Anonymous

    New low for politics tonight. Some Tory (I think she is called Harriet baldwin) on newsnight. Useless. Panel debating her – also useless. Worst of all Paxman – useless. She said workfare was voluntary, they keep saying to her “This is mandatory” and she keeps answering any other question. Paxman overrated. If that was Andrew Neil he would say “I’m sorry minister, but I cannot move on till you answer my question, is it voluntary or mandatory?” and he would stick at it till she either answered or proved her guilt by not answering.

  • Anonymous

    Too much socialism always and everywhere leads to forced labour. Minimum wage has destroyed jobs for young people and now they are forced to work for no wage.
    This plays into the hands of the authoritarian right wing as well (the nazis would have approved of workfare just as they approved of eugenics.)

    This is now the election issue for me, I will vote for the most anti-workfare party.

  • Anonymous

    The programme on alcohol was interesting – I think the two things I’ve retained from it were a) this country has adopted continental-style drinking habits without ditching its carousing ones and b) if you need a drink seven days a week you are on dodgy ground.  

    Not having watched Panorama for a very long time, I was shocked that the programme was only half-an-hour – I vaguely recall it as a very much longer affair and I thought I was in for an hour’s analysis of the country’s drink problem.  

    At any rate, I wonder if the current government has the balls to do anything much about the excessive consumption of drink in this country, particularly as it’s now something which happens in the privacy of people’s homes.  Perhaps the pub, like the post office, should be preserved for its social value.  

  • Michele

     There were plenty of Labour MPs disagreeing with what went on in a purely Labour Govt. 
    There was plenty of rebellion throughout TB’s tenure, especially from its women.
    Why else do you think AC is represented the way he is in a certain hilarious TV spoof?

    I was amused at the start of last night’s Panorama when AC was setting off for his run …. the ‘determined’ face that’s so often used in the Wail etc in support of the ‘bully’ accusations.

  • Michele

    Do you really think that your own ambition relates to what TB said?

    TB said …
    “The POLITICAL reasons for the Euro were clear,
    it’s just the economics that got in the way.”
    Caps and apostrophe are mine.

    How on earth you can manipulate this to equate with what you describe as ambitions to be a billionaire is anyone’s guess.
    Stop the fancy dress, it’s not a birthday party.

  • Ehtch

    Bugger bankers, bugger bankers on not planet earth non-planet earth existence – we could always cut groceries off to them when we finally find where they hiding, unless they put out a money contract on us for simply supressing simple hard work making groceries?
    http://www.youtube.com/watch?v=NHSMSS7F-KI

    Up to them I suppose, they can buy anyone and anything shallow, the gutter breaths they have become. Greece? The Rothschilds could wipe their debt out like that, destabalisation in world markest yo-yo’ing for a while, but better people live better than anything else. Stop fannying us bankers, for fuck sakes!

  • Ehtch

    Furthermore, maybe the Rothschild family should very very quickly set up research lines on where banking is going, since communication technology seems to be overtaking it, since the Rothschilds have at times been quite altruistic, when it has suited them, you could say. Anyway, worked for a company called Louis Newmark but got a new name, but the managing director was distant connected to the family. We eventually produced a modern search and rescue flight control system for brand new Westland Sea Kings helicopters in the 1990’s, to back up the coastguard and lifeboats, which our heir is, hey, in service with, SAR Seakings, that is. Tamar lifeboat from Tenby, down the slipway like a hot shit off a shovel – VRRROOOOMMM>>>
    http://www.youtube.com/watch?v=-nG4VPEED4o

  • Libdem

    I agree, storage deposit seems a sensible idea.
    White collar crime somehow always seems to get away with things when compared to more obvious law-breaking. I actually liked the way Reagan dealt with their air traffic control problem…. 

  • Michele

     Greece is in the mess it’s in because it has effectively had no national administration. 
    A populist economy where people retired at age 50 or 55 alongside truly massive groups of people paying no tax and no political party ‘threatening’ to change the latter has been a joke. 

    Would you really rather the international community let the country sink for the sake of cash in handers? 

    It was heading down the plughole before it joined the Euro, its govts shouldn’t have wanted the largesse of the EZ without being fully committed to their side of the bargain (just the same as RoI and its boastful bubble of the ‘Celtic Tiger’ economy).

  • Michele

     Given that exercise is one of the best purifiers for the liver I’d imagine that AC’s ‘endless running’ means his must be fully recovered since its abuse.

  • reaguns

    Come of it Michele, you can see the point right? If he were to say, I dunno something like free education does not make economic sense but politically we need it that might make sense (in a hurry bad example I know because that can make economic sense) thats one thing.

    But the Euro is a financial / currency arrangement if the economics of it don’t work then there is nothing else left.

  • Ehtch

    Money and the EU, since 2000 especially, has been living in some sort of utopian dreamworld where an irrational reality has existed, up to 2008 that is. I think let Greece sweat a bit more, and readjust how it all works, so to get them, and others, off the hook, and hope they all learn something. Baffles me how Italy carries on, their debt is quite huge, well over 100% of annual GDP I believe it is.

    And Ireland and the “celtic tiger”!?! That has become a standing joke, or a standing joke built on sinking sand – all built on fantasy irrational pie in the sky money again. It makes you think who is behind the wheel at times. Capitalism – who’ll have it?

  • reaguns

    Think its quite different from Ireland Michele, perhaps some of the same principles but taken much further in one than the other.

    Think Irish pay a lot of tax, government has a firmer grip, though they also have crazy policies of paying  200 euro per week dole, including paying it to those that have been resident there a very short time. Celtic Tiger was really “Celtic Tabby Cat with artificially low interest rates”.

    Good job we don’t pay loads for a welfare state, avoid paying taxes on industrial scale, neglect savings and manufacturing, and try to solve our problems with borrowing and artificially low interest rates… oh wait…

  • Richard

    Far from criticising AC for his fitness regime, I did not find that watching him running  was great TV.
    It will be very interesting to hear from AC whether it has been possible for him to go from “My name is AC, I am an alcoholic….” to being able to handle social drinking, contradictory to what we are always told. It will take a few years of social drinking plus a huge stressful event for him to say that he is “over” the problem.

  • Michele

    State-owned RBS have just announced losses of around £900Mn (allowing for bonus awards of around £860Mn).

    It does make all the kerfuffle about Stephen Hester’s £1Mn look a tad manipulated.  Can’t help wondering how far ‘down’ or along the chain of employees (and how far round the world) these bonuses are being paid and whether all the recipients will be paying UK tax.

  • Anonymous

    I don’t understand… RBS have made a loss, and not only are they still paying bonuses but they are paying almost as much in bonuses as they have lost??
    Crazy.

    I know that you can have a business that makes a loss but you might have a department or a star performer who has done well within that who deserves a bonus. But surely no chief executive of a loss making company should ever get a bonus.

  • Ehtch

    Heard Brazil is planning on helping the euro with their problems, and could educate the EU on the new world they find themselves in, via Portugal no doubt. Good on them. CIA must be working overtime as we speak at such suggestions…
    http://www.bbc.co.uk/news/business-17170157