This letter, regarding the decision by the Financial Conduct Authority to drop its investigation of banking culture, was published by the Independent on 1st January 2016.
Following the banking collapse of 2008 we were told that both the structure and the culture of banking were at fault. The central structural flaw, the fact that the public was required to guarantee the casino economy, has not been adequately addressed. Instead of the essential separation of retail from commercial banking only a much weaker ring-fence is proposed but yet to be implemented.
With the removal of Martin Wheatley earlier this year, we now see that the Financial Conduct Authority is to drop its investigation of banking culture, which was so widely blamed for the banking collapse. So neither structure nor culture is to be radically changed following the worst financial crisis in the history of capitalism.
In an economy where money is created in the private sector based on debt, a banking licence represents an extraordinary power granted to a small number of corporations by the state. Strict regulation of their activities, particularly when their risks are guaranteed by the public, is therefore essential.
An insistence on the need to reform both the structure and the culture of banking is nothing to do with “banker bashing” but rather a necessary defence of the public interest against the destructive behaviour of the greedy few.