Do no harm: why banks continue their agonising, slow death plunge

It seems too easy, and almost cliched these days, to bash the banks. And yet, astonishingly, just when you think you’ve heard the worst of it, some new piece of information comes to light that shows just how sick and rotten banking is right now. I fully understand, of course, that not every banker is corrupt and that not every bank is rotten all the way through. But as with so many lawyer jokes over the years, it’s beginning to feel like 99% of banks are giving the 1% of good ones a bad name.

Maybe it’s helpful to be more specific about my issue today. My scorn is directed mainly at the large, global investment banks, or large banks with investment arms. These banks have shifted over the past decade or so from institutions that provide the oil that makes the economy run smoothly and morph into profit-making and profit-hungry players in their own right (and players that add no physical value to the economic system at that). They’ve also been the chief catalysts behind pushing executive pay into stratospheric (and catastrophic) heights, and building an unhealthy culture of excessive pay for a few individuals who are not similarly ‘punished’ for losses and the risks they take. They seem to have no sense of shame that they needed to be bailed out by the public that they no longer serve in many countries around the world. They have deliberately misled customers – and, in some cases – actively reducing client’s profits in favour of their own. The list of charges is seemingly endless.

But, then, a few days ago, Goldman Sach’s lawyers accidentally released a series of internal documents that they had been spending millions of dollars to keep private over many years. It’s easy to see why they didn’t want these communications to be made public. They show a systematic failure of ethics, a widespread disrespect for the rule of law and a fundamental disregard for delivering value to clients. These specific documents shine the spotlight on the issue of ‘naked short selling’ (often thought of as a ‘myth’ in banking circles), but they are damning and embarrassing on so many levels for Goldman (and by implication, other banks like Goldman).

Read Common Dreams’ report on these released documents. At very least, banks should “do no harm”, and yet it seems they’re actively and deliberately causing damage to our world.

This story really just makes me sad. And I feel kind of helpless. If there was another industry so roundly screwing the planet, there’s be an outcry and pressure groups pushing for change. With all due respect to the “Occupy” and the 99% movements, we need more than a few hippies camping out somewhere – we need high level economists, politicians and business leaders to take a stand here. But, as Goldman’s documents show, these people are often bent by the money and power at play in the system. We also need those good people who work for banks to stop being either defensive or ignoring the issue and start to fix their industry from inside.

Banking is in trouble, and the system is rotten. Change must come.

For those inside banking right now, you must realise, surely, that each time banking as a whole gets hit with another jaw dropping issue like this, another nail goes into your industry’s coffin. All around the world, non-banking competitors are gearing up to ambush your industry: mobile phone operators, Google, Amazon, retailers, technology companies and governments are all eagerly seeking ways to replace you. Don’t be fooled: your industry is not bullet proof and it is not unassailable. Change will come, but meanwhile bankers are sleep walking into an agonising, slow death in which they do serious harm to all around them.

What can we do? What can we do if we do it together? How can we get the rich and powerful to join us?


0 thoughts on “Do no harm: why banks continue their agonising, slow death plunge”

  1. Rockyann says:

    Oh where to begin.
    Firstly, let me thank you for publishing this article about the banks. Matt Taibbi has described Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
    I don’t think the evil that the banks has wrought has been emphasized enough in our media and most people just don’t realize the extent to which they have ruined the world economy.
    However, I take issue with this comment:

    “With all due respect to the “Occupy” and the 99% movements, we need more than a few hippies camping out somewhere.”

    That the Occupy movement is “just a bunch of hippies” is exactly the meme that the elite want you and everyone to believe. I personally know many people in the Occupy movement and they are not hippies. If you are referring to the students and the unemployed who camp out in London and in various cities throughout the US, then… yes. Students and unemployed people do that because they have the time. If they had jobs they wouldn’t be camping out. Most populist movements start off as student-driven. However, they are then taken up by the mainstream and that’s how change and reform are made. You should be extolling the virtues of those kids who are out there, spending their days and nights in very uncomfortable conditions and getting beaten up by the police. They are the only people who are drawing attention to the gross inequality and injustices that are taking place within our system. And don’t think that the Occupy movement is anti-capitalist either, which is another favorite media talking point. They are NOT an anti-capitalist movement. Those kids want a way IN to the system. They want a fair shake.

    I support and applaud the members of the Occupy movement and I wish you would too.

    1. Graeme says:

      Rockyann, thanks for your excellent response and reminder about the power of group of people who draw attention to an issue.

      I do support the Occupy type movements, just as I have supported similar types of movements and campaigns in the past. My point (possibly badly made) is that the Occupy movements have been too easily sidelined by the power of the banks, largely because they are unfocused (and sometimes even incoherent). This is also a point that is true of most liberal organisations as opposed to their conservative counterparts. This is not a criticism, just a statement of fact.

      But thanks for the reminder that their message – and their personnel – are worth listening to.

  2. Graeme. thank you for your heartfelt and accessible blogpost regards the banking industry. We in the UK are exposed hugely by banks being in crisis as London is known for its financial services industry. It has been one, if not the bedrock of its economy for decades.

    Your asking for the people who work in banks to help with their healing is timely. as is your chilling message that “Don’t be fooled: your industry is not bullet proof and it is not unassailable.” Go well Graeme, and keep on speaking up and out when we really need to listen.

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