Banks: You Can Bank on It!
We all knew that cultures were different and that we all had a unique way of doing things that run our daily lives. In Europe they tell the banks that they will die if they are weak (apparently, after the statement issued by Danièle Nouy, overseer of the Singe Supervisory Mechanism). In the US, it’s only the cost of lawsuits and legal expenses that stopped the banks from making all-time record highs in 2013 and still there is hardly a line written about the money that is being raked in. In the UK, they intend to sack 12, 000 people and say thank you very much by dishing out the biggest bonuses this-side of the Atlantic (for the top dogs, not the redundant low-life). Yay! If your kids are looking for something to do when they grow up, they need to become a high-flying banker. Even better, one of the fat cats that gets the cream, does the dozing and slips off with the sandman. Even better than better: Mr. Sandman could always throw the sand into the eyes of those that are losing their jobs, being made redundant and into the eyes of the public so that they don’t get to see it.
Danièle Nouy says that banks that are weak will have to say goodbye to the high life and die. But, please, this is Europe, she is French and there has to be a certain panache about this death. Even death has to be original, confident and accompanied by reckless courage and flamboyant acts. Let’s watch them go out with a glass of champagne. Remember, she wants them to die ‘in an orderly fashion’. Does that mean there won’t be any ‘crime passionnel’? The only crime of passion that will be committed may indeed be on Nouy herself when the people discover that she will have whittled down the banks to a handful that hold the purse strings even tighter. How very fitting that the one part of the male anatomy that she will have us all held by is also the very same word for ‘purse’ (‘bourse’) where she comes from.
The USA is doing pretty well with the six biggest banks in the country (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley). How have they been treated since being the main instigators of the financial crash which has put us in the predicament that we are in now? They have been treated very well indeed. Those six paid out $18.7 billion to settle lawsuits against them last year for financial misdemeanor and violations of the Banking Secrecy Act as well as misrepresentation of mortgage-backed securities. The list could go on. Even so, those six still made more profit than they had made before the financial crash (all we have to do is go back to 2006 to see figures higher than these ones).
Net income for the six rose by 21% and reached $74.1 billion. That was all thanks to the rise in the stock market, due to false hopes from the Federal Reserve and virtual booming of the economy. All of that looks today as if it may actually continue since Janet Yellen is announcing that it’s not time to pull the plug completely and the economy is still not out of danger. In 2006, when the housing bubble was raking in more money than ever before (right at the peak before it burst), those six earned $84.6 billion. JPMorgan Chase, for example, is expected to make $23 billion in profit alone this year. Wells Fargo is expected to see an increase in profit for the fifth year in a row, hitting $21 billion.
In the UK, things are marginally worse (if that is at all possible). Take Barclays Bank, for example. Not only have they leaked 27, 000 files related to customer data accidentally, but they have also just announced that they will be incurring a 32% fall in profits, making 12, 000 employees redundant and at the same time (in one fell swoop) they have decided to give investment bankers £1.6 billion in bonuses. Is this one of the weaker banks of the ilk spoken about by the French lady espousing the passions of crime? Total bonuses in fact stand at £2.4 billion (up by £0.2 billion from last year). Profits have fallen from £7 billion to £5.2 billion. So the bank is not weak, it’s just ‘misguided’, ‘mismanaged’…? Antony Jenkins, who was promoted to head Barclays after the £290-million Libor scandal defends the decision to make thousands of employees redundant. He shall have slightly more trouble rendering it more acceptable to swallow the bitter pill of losing the data (and subsequently not contacting any more than 300 customers) as well as handing out the bonuses. Barclays says they are ‘Fluent in Finance’. We obviously no longer speak the same language.
The Sandman has sent us all to sleep over the years while the banks are making more money today than they ever were in the past. Continually, it seems, we are still going round in circles. Once upon a time, the banks sacked the employees and paid the shareholders and gave the top financiers hefty bonuses. Now, even the shareholders are not getting as much as they used to. How long will it go on for until the financiers get lynched?
Originally posted: Banks: You Can Bank on It!
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