So here we see a story of how Governor King of the Bank of England is so frustrated at the actions of some members who threaten to upset all their cozy arrangements, he has gone to the government to get some more enforcement power. Draw your own conclusions, but what this story says to me is that:
- There are now member institutions that have become SO greedy, they are willing to trash perhaps the greatest scam in history.
- Some members have probably become so hooked on non-traditional activities like derivatives trading, they literally cannot stay open as a real bank.
- There exists the very real possibility that the central banking model is breaking down from within. After centuries of unsuccessfully trying to control the world's privately-held central banks from the outside, stupid naked greed on the inside threatens to weaken these destructive monoliths in ways the followers of Ron Paul can barely imagine.
Sir Mervyn King tells George Osborne: you must act now to tame the City'Vested interests' are trying to kill reforms, warns Governor of the Bank of England 03 MAY 2012
The Governor of the Bank of England, Sir Mervyn King, has demanded that the Government speed up its reform of Britain's financial sector. He also attacked bankers for resisting new financial regulation in order to protect their large bonuses.
Sir Mervyn warned last night that "vested interests" in the City of London were trying to scupper reforms meant to prevent another crisis.
The Chancellor, George Osborne, met the bosses of Barclays, the Royal Bank of Scotland and Lloyds in the days before the Vickers report on reforming the banking sector was published in September 2011. Last December, The Independent revealed that senior bank executives met or called Treasury ministers nine times in the weeks after the report's release.
"Already we see vested interests rise up to defend their bonuses and profits," the Governor said during the 2012 BBC Today Programme lecture.
The Governor's call for reforms of the banking sector to be speeded up is likely to meet a hostile reception in the Square Mile. Sir Mervyn praised the Vickers commission – which has recommended that the Government compel Britain's largest banks to ring-fence their high-street lending operations from their high-risk investment banking arms and hold significantly larger capital buffers. "It's vital that Parliament legislates to enact these proposals sooner rather than later," he said.
Some regulators have suggested the present deadline for the implementation of the ring-fence – 2019 – will provide the banking lobby with enough time to ensure it is watered down.
The Government has said it will pass legislation on the ring-fence before the end of the present parliament, but some regulators fear Vickers could still end up diluted. Last November, Bob Jenkins, a member of the incoming financial super-regulator, the Financial Policy Committee, said: "Their deadline is 2019 – a date so distant as to be irrelevant to their careers; a gap so long as to allow lobbyists to chip away until the proposal becomes both unrecognisable and ineffective. Why wait?"
The Governor said the Bank, which is to be given far-reaching regulatory powers from next year, would not be swayed by the financial sector's lobbying. "As an independent central bank with over three centuries of history, we can resist those short-term pressures and take the longer view needed to prevent another crisis" he said.
Speaking about the roots of the 2008 financial crisis, the Governor put the blame on the excesses of the banking sector. "In a nutshell, our banking and financial system over-extended itself" he said. "Banks made increasingly risky investments [and] to make matters worse they started making huge bets with each other on whether loans that had already been made would be repaid." more