Banks: prepare to meet thy tax

The financial industry must have been expecting something like this for a very long time now.
But it must be done internationally.
I think you meant "countries" in your last line Robert.
You would think that France, Germany, Russia, China and Japan would be in favour of such a move.
It would be very popular amongst voters.

Robert

It appears that Lehman's collapsed due to dodgy accounting practice yet no move has formally been made against it's former employees or their auditors. The same has also not happened for the rest of the banking/hedge fund service sector. Why?

The legislative powers are there even in the ineffectual FSA. As far as I see many of the executives, regulators etc should be doing some serious jail time. Is the reason this has not happened because current politicians are eyeing future well paid sinecures in this sector? Don't rock the boat and all that.

Any tax on our banks would cost us, the consumer,an increase either in charges or higher interest spread - it would also drive business out of the UK.

The Tories are seeking a populist measure, with no regard for basic economics nor common sense.

If the state owns the banks, the state taxing the banks makes little sense.
A tax on wholesale borrowing by the banks will be passed on to those borrowing from the banks, and lead to higher interest rates for buisnesses and consumers.

Doubtless the Conservatives have discussed this with the City or with people in it prior to this announcement.
It's very easy to suggest that it will drive business out of the UK, but when you consider the practicalities of doing that, for what may be a tiny tax on the banks is probably a measure they aren't prepared to take.
Besides money, London is an excellent city for doing business in, so there's still more 'pull' factors than there are 'push' ones.

taxing state owned banks does make sense from the point of view that it's simply money flow within the economy (public sector staff still pay income tax & national insurance even though they're being paid from public coffers)
i do, however, agree that any tax imposed on the banks (based on wholesale funding levels) will simply be passed on to both personal and business customers by way of higher minimum lending margins.
this may, in the short term,lead to more aggressive institutions (i.e those with higher levels of wholesale funding and thus tax bills) losing business to those who are not as agressive in the market.
although that principle will only work until those less agressive institutions 'max out' on how much they are able to lend against their deposit bases, before they too have to seek wholesale funding to meet demand.
all in all a complete mess. and not something that the conservative party has thought through when announcing such populist (yet ultimately vague) policies.

The subtext is that everyone knows that there must be a period of debt deflation. This includes both the state and the private sector - the price of borrowing will go up and the returns from investments made from borrowed money will decline, substantially. Savings will again be valuable. Savings can hardly be less valuable than they are at present and the capitalism system to remain intact.

The problem is really one of regulation and past (and present) regulatory incompetence. Labour seems to believe that banks cannot be regulated and must be left to leech the life out of the nation whilst the Tories see that the people will not put up with this and propose taxing the banks. I return to the problem of the Bank of England and its manifest incompetence as a regulator as it refused to use its only regulatory control, of interest rates, and substantially caused the bubble and thus the inevitable crash. We have to face up to this and reform regulation (and put up interest rates.) If we don't the seeds of the next crash are already growing vigorously!!!

None of the parties have said how a tax will help anything !!
The government of the day will get their money back when they sell the stakes they have in the banks - as long as they do not forecast when the sale will take place as this will just drive the price on the market down just as it did when our gold reserves were sold.
Or are they suggesting that this money goes into a pot that will not be touched until it is needed? Hmmm, sounds like the con that NI is - make people believe there is something in place when indeed there is not.
Anyone with an ounce of common sense knows this is just another way to raise money to pay for things the public never asked for and probably do not want eg EU, ID cards, CCTV etc
As others have said, the tax will just be paid for by customers.

This is pure electioneering.

#7 John
"I return to the problem of the Bank of England and its manifest incompetence as a regulator as it refused to use its only regulatory control, of interest rates, and substantially caused the bubble and thus the inevitable crash"

The BoE were tasked with meeting inflation targets set by the then chancellor GB. This they did and so they kept the interest rates at around 4.5 - 5 %. Again, perhaps the man who saved the world is one of those who helped to destroy it in the first place

This is completely wrong. We must remember that 10% plus of our GDP is made in a square mile in London. We must protect this at all costs, unlike Germany we produce no cars, white goods or electronics anymore. Our economy lives on what we do best, financial innovation and services no other economy can offer. What we have in London is truly world class.
I see the government is hiding from the underlying causes or this financial disaster.
Lehman didn't fall due to bad accounting or over paid staff. It fell because of the complex web of credit default swaps and collateralized debt obligations. Short term funding through repo desks e.t.c. Individual units within the bank becoming too powerful and disjointed from managment.
Without a clear understanding of the financial products flowing around the system it is all to easy to wack a flat tax on the system and claim it has been fixed- not the case!
Regulation has been too specific on individual organisations and not the industry and ******how it works******- there is the answer!

Tax is avoided. And (ab)used by those in power for their populist agenda. And transferred to the customers.

The only answer is separation of commercial and gambling. I don't understand why after all this evidence, the governments still try to find ways around this. Unless of course they try to avoid telling the truth that the people don't want to hear.

What they really need Robert is a good spanking. You know what I mean, the sort of thing they got at public school. Get all those bankers together and spank away. That'll teach the naughty boys for stealing public money and ruining the global economy. Oh yeah, nearly forget, after we've spanked them we can parade them around the streets naked and then empty their accounts and hand it all to those people they've destroyed over the last couple of years. Tell you what Robert: you can be the head spanker, how about it?

#10 charles12345 wrote:
"We must remember that 10% plus of our GDP is made in a square mile in London."

It used to be 30% only 2 years ago. What happened? Lehman, Madoff and the likes proved that their wealth is no more than a bag of lies. And Lehman did it through their London office.

"...unlike Germany we produce no cars, white goods or electronics anymore."

Unfortunately. And this is because we "protect this [the City] at all costs"

"Our economy lives on what we do best, financial innovation and services no other economy can offer. What we have in London is truly world class."

This sounds like we should be proud of that, yet somehow I am ashamed of London loophole.

We have been here before. Any tax that actually works will cause consternation among the bankers. And cause redundancies.
So the tax will be dressed up to work but will not do so.

We are either a developed nation or we are not.

You have public debt standing at 12.5% of GDP and you intend to tax yourself? If you own the banks then you will be taxing yourself surely!
Oh what a tangled web we weave when we plan to deceive !
What should happen is a major fraud investigation followed by people thrown in jail for mismanagement and deceit, also covering things up and doing illegal transactions.
But that would seriously under mine the general publics confidence in the banking system, saying that it cannot get any lower than it is now!
May be doing the right thing and jailing the individuals would do some good to a tainted industry.

The speculative banking investments need to be seperate from ordinary retail banking to restore the general publics confidence in the banking system.
The speculative banking side should then borrow cash and be charged interest from other financial institutions like anybody else. That way they will be extremely cautious in how they invest it!
If they make bad investments and they lose the cash they go under just like everybody else when you gamble at the bookers you lose your shirt!
Can somebody explain to me why the government has not instigated this reform?

ReformNotRevolution... you answer my case well!

You clearly have misinterpreted the Lehman's use or Repo 105. It is simply an accounting technique that prolonged the balance sheet exposure to credit default swaps a few more weeks... nothing more. A tax does nothing to uncover banks of balance sheet exposure to derivatives. Once we can do that the syatem is fixed. A tax is simply not the answer for a long term solution. Anyone who believes it is clearly does not understand finance.

You argue my case well for INDUSTRY regulatory reform. A simple tax does nothing. It is simply a way of gaining more votes! that is the reality.

The problem is the Government have dithered about watching bankers rub peoples noses in it while extorting money from the very people who keep them alive.

It needs a new broom to sweep through the whole system the people who should have done something haven't and are unwilling to.

"We must remember that 10% plus of our GDP is made in a square mile in London." this is the problem that people have to get their heads around ....the city produces nothing absolutely nothing its all just digits in a computer,its all a con job of astronomic proportions,compounded by regulation that is laughable.

You need to look at the structure of the banking sector and redesign that!, thats were the problem lies and nobody has addressed that yet.
The cash that was pumped in to these failed organisations has not cured this fundemental problem!
The organisation structure is flawed and it needs fixing and quickly to stop this happening again. Also the culture in the banking sector has not changed, you still have people thinking they are entitled to huge bonuses even when there performance is terrible!
Regulation can be used to set up the new structure so any fudge of this made it illegal and crimminal proceedings could follow.

10. At 1:52pm on 20 Mar 2010, charles12345 wrote:

"Our economy lives on what we do best, financial innovation and services no other economy can offer."

Surely it was financial services and innovation that has been the death of our economy?

Its funny how 10% of the wealth creation (paper shuffling invisible earnings) nearly matches the public sector debt, that in itself tells a story!
You cannot run a sucessful economy based on paper shuffling and dodgy high risk commercial transactions like credit default swaps! Its one big Ponzi scheme which will lead you to getting your fingers burned, no rephrase that the general publics fingers burned if it goes wrong!
If it goes well the bank makes a lot of money by using somebody elses cash,
win win for the banks.

Most western economies are mature and you will see very little growth in these markets for at least the next 20yrs. The movement of capital to the far east was started years ago by these investment bankers.
Our pension funds, life insurance, mortgages etc ensure they had a steady flow of capital coming in to then transfer over to Asia. Those investments allowed western companies to transfer production to the new consumer markets were demand is far greater.
In short the average European worker has financed his own demise with his own capital being used against him!Thats why the western economies are failing now the whole thing has been planned from day one. And they even conned the western governments into putting funds into the scam as well!

#10

"unlike Germany we produce no cars, white goods or electronics anymore."

And the fault for that lies very firmly with the City of London and consecutive Labour and Tory govts in Westminster that simply don't have the intelligence to understand the massive strategic damage they are doing and will continue to do unless we bring the City under control.

The City doesn't deserve our support because it hasn't earned it.

The tax does nothing.

It doesn't solve the problem of off balance sheet derivatives.


It doesn't solve the problem of CDS and the web of 'trust' that is in the system.


It doesn't solve the problem of excessive risk taking.


It doesn't solve the problem of bad regulation.


It doesn't solve the problem of managing and the pricing of risk.


It doesn't solve the problem that shareholders still dont understand what the banks are doing.

All it achieves is more votes and money back for the tax payer.

A false cure !

Wee Scamp
I am 52yrs old and I remember Thatcher in the eighties standing up in the house of commons and saying she does not need manufacturing we can make money in the financial services.
Shortly after that she destroyed the steel industry, coal mining, textiles had already been transfered to Taiwan and Asia. Essentially she wiped out any industry that was unionised or if it could be made more cheaply overseas it went.
Now the UK has an economy teetering on the bring because nobody has any cash to buy the products being made so wonderfully cheaply in Asia.
Thats were the root cause of this mess can be traced too!, back in the eighties.

It’s the imposition of taxes (as such) that financial institutions need. Taxes will not regulate out financial institutions. The thought of taxes must be making the big-shot wheeler-dealers laugh out loud.
Do you really believe that there’s any sort of tax that these Wall-Street boys cannot figure there way around...and eventually, inevitably out of paying?
These substantial financial risk-takers aren’t bracing for the imposition of a substantial new levy; no, their planning to evade the substantial new levy.
Why do Tories feel more comfortable imposing a unilateral tax?
My answer: because in regards to financial institutions, a unilateral tax has absolutely no meaning. All the Tories are doing (as you say) is dispelling the notion that they won't stand up to their putative friends in the City. Oddly enough, the proposal of a unilateral tax does exactly that: It fosters the notion that the Tories are week in the knees when it comes to their putative friends in the city.
For the life of me, I cannot figure why any country would want to emulate the United States on anything that deals with finances. President Obama wants a levy on money banks borrow from big lenders; who’s paying the taxes, the lender or the borrower, or both? I would think it would be the lender, since it's the lender that makes the revenue from interest.
Great! Let’s levy a tax against huge financial lenders, who will, as I've said above, have already scemed their way around paying taxes on this revenue.
The way forward out of this financial quagmire is a Tobin Tax on all foreign exchange transaction. The smaller the investor, the smaller the impact. The bigger the investor, the bigger the impact. Therefore, it’s not likely to affect the common folk, but oh my gosh, will it wallop the Wall-Street boys.
Tobin Tax provides an audit trail for tracing taxes (and therefore collecting them) BUT Tobin Tax also will identify the RISK-takers, the gamblers, the financial institutions and the financial transactions that are causing world debt.
Tobin Tax will enable those responsible for bank regulation to point fingers and do it quite harshly, maybe even prosecute the gamblers.
Tobin will provide money for social programs.
Tobin will help Governments liquidate their debts without burdening taxpayers.‬‪
The EU should implement a Tobin, get their computers up and humming, and ignore the groaning and moaning from the other side of the ocean.
Now's the time! Get a Tobin up and running!!

The power house economies now are Asia, they will have the consumer driven lifestyles now. They will be the ones going out and having the consumer driven binge!
I suspect the western economies will be running with huge public sector deficeits for years to come. All that will be left in the west is low paid food and service industry jobs were the income is that low you will not be able to binge! Well not after all the tax has been taken out of your wage to support the ageing population!
That in itself will create tension among the younger workers.

How can any kind of tax (by itself) fix the underlying problems that afflict the UK and global banking systems?

Golden ladders?
Golden troughs?
Negative trading?
State sponsored attacks on other currencies?
Highly leveraged, speculative and over-financed speculators?
Poor accounting systems?
etc

Could keep writing all day.

Unless the solutions begins with reform of rights -v - privileges and proper recognition of stakeholder interests then any tax reform is by itself just a gimmick - because the banking troughers know how to circumvent taxes and will just keep skimming off the golden top slice before the accountants get there. So this will mean lower returns for shareholders and stakeholders being squeezed.

I'd like to see all bank employees get an improved bonus and not just the 'golden troughers'.

"period of debt deflation" - There is NO SUCH THING as debt "deflation". Defaulting on debt instead of retiring it in instalments means the money once credited stays "out there", hence defaults are, if anything, INflationary! This "fear of deflation" is just a ruse by central banks to keep inflating the money supply. Deflation does not keep people from spending – they always spend what's necessary. And money NOT "spent" is then saved which means it is credit to someone who invests it for capital goods etc. thus it is again being spent, only not for consumption. Money never lies completely idle to any extent whether there's inflation, deflation, stability or a solar eclipse. For deflation to seriously happen, not only the current extreme credit expansion by the central banks and states (through "quantitative easing", stimulus packages, monetising and then spending national debt etc.) but also the money that was released into the economy PRIOR to the collapse would have to be "mopped up" again. This is nowhere to be seen nor would it be technically possible (confiscation aside) so we will rather see inflation than deflation.

24. At 3:21pm on 20 Mar 2010, charles12345 wrote:

"All it achieves is more votes and money back for the tax payer."

Sounds like a good start to me

Blueberry
Your right they will find a way around the tax, the accountants will figure out a right off some way. The Tobin tax, is this a tax a global financial transaction ? eg a movement of capital between markets?
Interesting concept because these guys move capital around globally it would generate revenue for sure.

You need to look at the structure of the banking sector and redesign that!, thats were the problem lies and nobody has addressed that yet.
The cash that was pumped in to these failed organisations has not cured this fundemental problem!
The organisation structure is flawed and it needs fixing and quickly to stop this happening again. Also the culture in the banking sector has not changed, you still have people thinking they are entitled to huge bonuses even when there performance is terrible!
Regulation can be used to set up the new structure , this along with a Tobin tax on financial transactions should claw back some of the cash used to support this sector.

I think its an excellent idea.

The banks that the private citizen uses should lend money largely based on the investments they can attract - as they used to do -not by borrowing from iffy banks that have got us into this mess.

The iffy banks should be taxed on the games they play on the international markets.

Its funny that when bankers shuffle paper around (buying and selling debt, commodities etc) to make vast profits while creating absolutely nothing we call it commerce. When the public service shuffles paper around to provide services we call it bureaucracy.

Please check this link out its from a Yahoo page and it details a letter or report from a former Lehman executive warning the rest of the board about misstating the companies assets and misleading investors and officials.
https://ca.news.yahoo.com/s/reuters/100320/business/cbusiness_us_lehman_accounting

This comment was removed because the moderators found it broke the house rules. Explain.

You have public debt standing at 12.5% of GDP and you intend to tax yourself? If you own the banks then you will be taxing yourself surely!
Oh what a tangled web we weave when we plan to deceive !
What should happen is a major fraud investigation followed by people thrown in jail for mismanagement and deceit, also covering things up and doing illegal transactions.
But that would seriously under mine the general publics confidence in the banking system, saying that it cannot get any lower than it is now!
May be doing the right thing and jailing the individuals would do some good to a tainted industry.
complain about this comment
The speculative banking investments need to be seperate from ordinary retail banking to restore the general publics confidence in the banking system.The speculative banking side should then borrow cash and be charged interest from other financial institutions like anybody else. That way they will be extremely cautious in how they invest it!
If they make bad investments and they lose the cash they go under just like everybody else when you gamble at the bookers you lose your shirt!
Can somebody explain to me why the government has not instigated this reform?

#10
"We must protect this at all costs, unlike Germany we produce no cars, white goods or electronics anymore"

====================================================================

Like Germany we need a balanced economy.

Ten per cent of GDP from the City is not a balanced economy.

Incidentally, it might be a surprising statistic, but only 30 per cent of German GDP comes from manufacturing, 69 per cent of German GDP comes from services.

The City does not deserve priority treatment. We most definitely DO NOT want to protect this at all costs.

#25

KeithRodgers

At 53 you are a mere child :-)

Yes - the roots of this mess lie in Thatcher's "big bang" when the City was deregulated. The bit Thatcher left out of the deal was that the banks et al in the Square Mile would be left alone to do their thing provided they supported UK industry properly.

Charles 12345: given how adept the financial institutions have proved at sidestepping regulation, exploiting loopholes and feigning ignorance when it suits - how would you structure reform to deal effectively with such issues.

A number of posters have mentioned the Tobin Tax and I must admit it sounds
like a good idea as long as the US is on booard - no doubt you will have a contrary view?

#36
"Can somebody explain to me why the government has not instigated this reform?"
====================================================================

When the proverbial hit the fan Brown had one plan and one plan only - 'Golden Goose Preservation'.

Nu Labor needs tax revenue from the city to fund its extravagant spending plans.

One instinct only - to spend - without caring about the morality of the tax source, or more to the point, the moral hazard of a bailout.

#25
"Thats were the root cause of this mess can be traced too!, back in the eighties."

====================================================================

Goes back further. It goes back to the end of the empire and the failure of post war Labour administrations to deal with private education and social mobility.

Thatcher just cleared up the detritus of non-competitive industries.

#2
"Is the reason this has not happened because current politicians are eyeing future well paid sinecures in this sector?"

===============================================================

You probably thought your comment was cynical, however it almost certainly has more than a ring of truth.

Part of the rotten culture in this country is that top management are never held to account. This applies to...

- partners in top accountancy firms
- top executives in poorly performing public bodies
- bankers
- government ministers

It is a peculiar anglo-saxon thing. A subtle form of corruption. Heads we win, tails you lose.

#36
"May be doing the right thing and jailing the individuals would do some good to a tainted industry.
complain about this comment"

==================================================================

You can't jail someone unless found guilty of a crime. There was no crime just poor judgement, incompetence and greed.

The only sanction for 'poor judgement, incompetence and greed' is the market.

This particular 'judge, jury and executioner' was thawted by this labour government because they also suffer from 'poor judgement, incompetence and greed'.

#41

Richard Dingle said "Thatcher just cleared up the detritus of non-competitive industries"

So how come all those non competitive industries are still operating quite successfully in other countries. I must take you to Norway, Finland, France and Germany amongst others and show you their shipbuilding industy, Germany and France for cars, the USA, Germany, France and many others for high value electronics and so on and so forth.

I'm still unable to work out how this tax will not feed it's way through to lower interest rates or a higher cost of banking for the customers..... 'us'

In the same way the it does on pertol, booze, fags, etc.... OK the 'duty' is post B2B, but the customer always pays

Legislate to stop Casino Banking, but no more tax please!

#44
"So how come all those non competitive industries are still operating quite successfully in other countries"

==============================================================

Because they are NOT non competitive in those other countries. The products are well designed and manufactured; unit labour costs are under control.

Thatcher can't be blamed for everything, she just refused to issue any more blank cheques (i.e. British Leyland). The reason why these industries failed is to do with management quality, our education system and the bias in UK against engineering.

If this country under Thatcher had possessed a BWM or VW it would have been a different story.

Bluesberry

You are correct, a Tobin Tax is ecxactly what is called for. I'm no fan of G Brown Esq. and his record over the last 12 years but the Turner-Brown idea of a Tobin Tax not just on FX but on all Financial transactions sounds like a good start to me, a sort of tax on casino capitalism to which no one can surely object!

I just doubt he has the cojones to put it in place, maybe he'll surprise me and put it in the Labour manifesto?

Just to clarify about Tobin - if tax is collected where transactions are settled i.e the City of London and other major settlement centres then no worries about firms fleeing to tax-free jurisdictions, coz there wont be any!

# 48. At 8:49pm on 20 Mar 2010, ThorntonHeathen wrote:

> no worries about firms fleeing to
> tax-free jurisdictions, coz there wont be any!

Rogue banking states must get the same treatment
as any other pariah state, e.g. Iraq, Afganistan etc.

46 Richard Dingle
Richard virtually every other western business has subsidies to hold on to key sectors of its local economy. Nobody is that naive to think it does not go off surely? , each respective government in each country cannot afford to let key industries go under.
Here we are fighting by the qeensbury rules obeying every rule while everybody else is street fighting.
Yes British Leyland got subsidies, so did British Steel, Rover, British Aerospace, BA Airways and lets not forget the millions of pounds going to farmers in the form of subsidies. Some of those said farmers are or were MPs in previous governments lining there own pockets!
Now we are subsidising the failed banks !, financial aid has to be provided to help industries through a sticky patch if thousands of taxpaying jobs are at stake.

Former Lehman employee spills the beans then gets sacked months before the failure became public!
Please check this link out its from a Yahoo page and it details a letter or report from a former Lehman executive warning the rest of the board about misstating the companies assets and misleading investors and officials.

https://ca.news.yahoo.com/s/reuters/100320/business/cbusiness_us_lehman_accounting

When a former top level employee of Lehman compiles a report about his concerns (see item 51 for link to the article)and then delivers it to the management team.
Two days later he gets sacked and the report gets binned, thats not bad judgement thats a cover up in my book! There is no way that can be called bad judgement or errors, to me thats deception!

#42 Richard Dingle

'It is a peculiar anglo-saxon thing. A subtle form of corruption. Heads we win, tails you lose.'

-------------------------

It certainly is not an Anglo-Saxon thing!

You really do need to start doing some serious research!
https://bbc.kongjiang.org/www.bbc.co.uk/blogs/newsnight/fromthewebteam/2010/03/tonight_on_the_programme.html

...although some Anglo-Saxons are good mimics and have unwittingly become 'useful idiots'...ala 'Weeeee Willy Walsh' of BA.

Dontcha just think he's loving the limelight just a bit too much?

This is what Labour have become - spineless. It is why they must NOT be re-elected. At a time like this, Robert you comment, "....while Labour feels that even now it can't afford to be seen to be anti-capitalist." That's the whole point, if it WAS seen to be anti-capitalist, it might actually earn some popularity!

In other words if Labour actually decided to step up to the plate and finally decided to control Capitalistic excess and the perversion of business that comes with it, Labour might begin to earn some respect.

And yes, the right wing press would indeed try to label it "Socialist." But ordinary voters would see this as someone in power, for once, doing the right thing!

The banks will only pass this down to the ordinary punters in higher charges. What we really want are the Fraud cases to start rolling out, but they will take time and gathering evidence, even from whistleblowers, will be fiendishly difficult. I'll be there, though, with my knitting, at the foot of Madame Gilloutine.
It is the generation of bankers who caused this fiasco that need punishing, not the truncated, state-owned banks. Wrist-slapping is a token political sop. Parties will have to work harder than that for my vote. Especially ones who had the love affair with that cess pit - the City - in the first place and removed the regulation that might have curbed its excesses. We want more teeth shown.

"Come thou Daemon Mammon..."

Here is the USA version of what needs to be done to clean up the financial sector, how many people will block him is another question!

https://ca.news.yahoo.com/s/capress/100320/business/us_obama_finance_reform

Here is what the US president said about banking reform in a video broadcast from the whitehouse. The finger is pointed well and truely at the banking practices and the excessive powers they have.

https://www.politico.com/news/stories/0310/34729.html

#2 John
if I remember with the B of E, GB changed the index by which they calculated inflation. House prices were no longer considered, and I firmly believe that had they been included the B of E would have raised interest rates and the desire for loans and mortgages would have not reach the massive supply and demand that it did.

Add in the demasculation of the B of E's control by sharing it with 2 other bodies rendering financial regulation of any kind impotent, it is no surprise that banking went to hell in a hand basket taking us all down with it.

You didn't have to be a banker, politician or economist to see what was going to happen. I said to my husband in 2005 that I couldn't see how houses could continue to increase in price much longer when hardly anyone could possibly afford to pay a mortgage when they were getting 100 pc loans on multiples of 7 times salary or more.

I'm no economist, just a parent who worried about how my kids would be able to get on the housing ladder. My only dubious claim to fame was that I was a mortgage manager in a bank in the eighties. Back then a loan was a max of 3x plus 1 or 3.5 x joint - we never did 100 pc mortgages, the most was 95 pc, with a guarantee premium payable of up to 20 pc of the loan. We also had to do proper income and expenditure checks and credit checks on little green request forms. Sounds very quaint now!

Frankly, I'm surprised house prices haven't fallen a huge amount more into negative equity.

IMHO, include house prices in the price index for calculating inflation, tax the banks (especially on the charges the make to customer accounts) and split the retail and investment sides apart. Give regulation to the B of E and take politics out of it.

Clip their wings properly, instead of just talking about it!

#42 Richard

I'm not sure it's a disease peculiar to Anglo Saxon kind....

Power corrupts
Absolute power corrupts absolutely

A human condition I think, but more prevalent lately it seems among bankers and MP's!

No wonder us little people are so fed up with politicians!

My alert buttons are always pushed by people who claim to be "precious", or are perceived as such by ruling classes and/or their agents.

The collapse was caused by accountants if my memory serves me well, usually within companies that hawk statistics, advice, diagnosis, prognosis, and halitosis. They pop up regularly on the media with their own brand of the top ten, twenty, fifty, one hundred, or whatever, but you never see them in a league table do you?

If information is power then misinformation is the ultimate weapon. Tax? No, can we not just put them all to sleep as humanely as possible and get back to trying to run honest finances?

I see this latest tax levy by Cameron as purely political. He states that this is a way of getting the tax payers money back. The tax payer will get their money back with the value of the shares increasing. The value of all the nationalized bank shares is increasing and the monies loaned to the banks will return a profit, not exactly good politically for Cameron. This move is a ploy to reduce the value of bank shares or certainly to slow their increase before the election.

59. Tigerjayj 'I'm not sure it's a disease peculiar to Anglo Saxon kind....'

The Anglo-Saxons were of Nordic, Germanic origin, and so were most of the Wall Street banks. Lehman and Goldman-Sachs are not, however, Nordic names. One has to be careful with class contrasts on this matter. Search Google for 'Masters of The Universe September 17 2007 Newsnight' as the same demographics changes which were wrought there, are now happening in London, and with the same subterfuge. Just look at the figures. A few years go, the London Mayor's office projected that over the next 30 years that 99% of London's population growth will be in BME groups. Have a look at NYC and how its demographics have changed (se link refeence above).

This has all been about encouraging markets, i.e uncritical (sub-prime) consumerism, and it's been right-wing (i.e free-market libertarian, aka anarchistic) political correctness which has tried to stifle discussion of this, because airing it is deemed bad for the markets (consumerism).

Most people have got this all wrong as a consequence, even bright people.

China will just get stronger and stronger because it regulates its population, and because the USA's enemy, is an enemy within which it is too blind to see.

To begin to see all this in a fresh light, I suggest we think of the word labour instead of 'behaviour'. There is an effective science of behaviour, whether 'economists' understand this or not.

We, in the liberal-democracies, control (more accurately, we liberated) the exchange of 'labour' differently to China.

The Renminbi is undervalued by design, the Chinese Government limiting its exchange. What's the effect of that in terms of US/UK productivity? Money is what's called a Discriminative Stimulus or conditional incentive. It is used to shape/manage behaviour (labour).

Which group (if any) has pushed for Liberal-Democracy and Human Rights at the expense of human duties? Which group (if any), looking at SES by group, has most benefited in the Liberal-Democracies, and at whose expense?

A tax to help curb irresponsible risky borrowing and cheap credit seems like a reasonable idea in principle.

Will the government take their own medicine or is this a round about way to make their borrowing relatively cheap?

They are as guilty as anyone in both allowing and feeding the credit bubble and now they might give themselves a bigger false advantage over the private sector in the process of "efficiently" reallocating capital and resources.

Charles12345 makes the excellent point that the UK is dependent on banking and finance (B&F) for making money. The problem is that banking and finance are, as someone once said, 'as far as wealth creation is concerned, that's just re-arranging the deck chairs'.

Meanwhile, Germany and others are making the deck chairs.

I say, tax the banks, BUT USE THE FUNDS WISELY. Get us back into making stuff.

Of course if other countries refuse to introduce new banking taxes, Wall St and London may be putting themselves at a disadvantage, just to pay for past recklessness.
Those other countries may say......"serves them right".

Though a tax will take back the money owed to the British people it can only do so if the banks are well funded and functioning.

The problem with a tax is it does nothing to stabilise the banking industry in a way that will prevent the recurrence of another credit crunch.

As yet we still do not know what action, if indeed any, the banks have taken to address toxic debt and reckless lending.

I still believe that it's possible to have 20 credit cards and yet not have the necessary income to support them.In that scenario lots of debt can be racked up before it's realised that the cardholder does not have the capacity to repay.

It's also possible to increase your credit limit online by quoting fictitious income figures, because, unlike the good old days, banks do not seem to contact employers to verify incomes.

It would be great if banks would make a public statement which clearly outlines the action they have taken.

If nothing has changed then the imposition of a tax will be meaningless because if banks go under the taxpayers get nothing.

Maybe we need to give bankers a bigger incentive to behave.Perhaps long Enron style jail sentences might be the answer especially for those at the top who still support and disproportionately benefit from the benefits culture.

Any money we do get from the banks needs to be used to reduce the deficit and to build up the other areas of the economy which have suffered from under investment. Hopefully, we can produce a more balanced economy that removes our reliance on the finance industry and gets many of our unemployed back to work.

65. WolfiePeters wrote:
"someone once said, 'as far as wealth creation is concerned, that's just re-arranging the deck chairs'.

Meanwhile, Germany and others are making the deck chairs.'

...and the bankers take one or two for themselves each time they re-arrange them - and currently faster than we can make them.

So unless we get the deck chairs back from the bankers sharpish there will soon be none left for anyone else....

Oh yes, Brilliant!

I've lost all the money I had invested in Bradford and Bingley.
What money I have left is now earning nuppence in deposit account ISAs.
My remaining bank shares (already just scraping along) are now going to go down like lead balloons in response to these tax threats.

Who do they think they are penalising, 'cos it certainly won't be the bloated bankers.

One very much hopes that the establishment of a bank tax, which one can agree will help to deal with the fiscal deficit caused by collapsing banks, will not also deter a future government from separating the retail banks from the casinos. This latter is the most important reform of all which just has to happen.

The modus vivendi of de-regulation:'Business Secretary Lord Mandelson said he had "no recollection" of talking to Mr Byers about the issue of food labelling regulation - an area where he claimed to have influenced policy.'

Just try proving that he (or anyone else) did have 'a recollection'.

All that matters is recorded verbal behaviour....and observable outcomes.

These poor impoverished ex ministers couldnt even wait until they are in the Lords where cash for influence seems to be more accepted practice,with no way of removing offenders and police unable to take action.

The worst that can happen is they are named and shamed. That only works if you can be shamed , these people would prostitute their grandmothers for a cash bonus....

Perhaps we should go back to hereditary peerages they werent as easy to buy.

72. AqualungCumbria 'The worst that can happen is they are named and shamed. That only works if you can be shamed'

Spot on.

Liberal-(Social)-Democracy is a self-selecting disaster for the majority. It's why those threatned with it abroad declare 'Jihad'. This term used by Zinoviev in Baku when translating John Reed's words 'Class War' for the locals....

Ironically, Zinoviev was Jewish, but also one time head of the Comintern, an earlier version of today's Socialist International, which is currently presided over by...... the Greek PM!

Unilateralism is bad when it comes to disarmament, but it can be entirely appropriate when it comes to setting standards.

https://cityunslicker.blogspot.com/2010/03/in-praise-of-unilateralism-and-high.html

We know the consequences of the 'race to the bottom' in banking regulation. It was Brown's explicit policy and it has cost the UK disproportionately.

THE BANKS NEED TO PUT SOME MONEY INTO THE TAX SYSTEM AND IF THIS IS A WAY FOR THAT THEN I AM ALL FOR IT. THE PEOPLE OF BRITIAN ARE FEED UP WITH THE BANKS MAKING FAR TO MUCH MONEY AND PAYING OUT FAR TO MUCH IN BONUS. THEY NEED TO BE BOUGHT BACK IN LINE IN A BIG WAY. THE RBS SHOULD HAVE BEEN LET TO GO BUST IN THE PEOPLE EYES. I AM ALL FOR SAYING THIS DOES NOT GO FAR ENOUGH. HOW ABOUT A SMALL TAX ON ALL STOCK MARKET DEALINGS AS WELL IN THE COUNTRY. HOW ABOUT EXTRA TAX ON HIGH PROFITS THAT THESE BANK MAKES. IT TIMES TO BRING THEM DOWN THE EARTH IN A VERY BIG WAY. THEY HAVE CREATED THE PROBLEMS IN THIS COUNTRY AND ITS TIME FOR THEM TO PAY UP. AS FOR THE BOE IF THEY DON'T GET THE INTREST RATE BACK UP SOON THE PEOPLE WILL TAKE TO THE STREETS TO PROTEST. MERVIN KING FROM THE BANK OF ENGLAND NEEDS REPLACING NOW AS ALL HE IS DOING IS MAKING THINGS WORSE FOR THE SAVERS OF BRITIAN. HE IS JUST LOOKING AFTER THE BANKS PROFITS BY LOW INTREST RATES FOR THE SAVER AND HIGH INTREST RATES FOR THE BORROWERS.

Guess what - banks will pass the tax onto the general public by increased charges, so who's payimg in the end ? Correct me if I'm wrong but the banks have to pay back the money they lent from us to keep them afloat so why should taxes for us go up ?

76. Richard 'the banks have to pay back the money they lent from us to keep them afloat so why should taxes for us go up ?'

Because their research and experience tells them that the public can be duped into doing so, and if that doesn't work, they'll use threats that they can move anywhere in the global economy after calling in all their loans, leaving this manufucturing wasteland even more helpless? Look how they have dumbed down the population via Faustian pacts, especially to women. Why do you think the Islamic world is so hostile to 'Anglo-Saxon' ways? Look at our birth-rates.

#46. Richard Dingle wrote:

" If this country under Thatcher had possessed a BWM or VW it would have been a different story. "

You bemoan UK manufacturing competitiveness (and blame the lack of it).

I recall that the policies of Thatcher got the Pound /Dollar rate up to as high as 2.40 Dollars to the Pound and this was the main destructive force that mitigated against manufacturing and exporting from the UK / not importing into the UK.

Indeed, I myself recall moving a hi-tek manufacturing business abroad - not because of any productivity deficiency, but simply on the grounds of the exchange rate. These exchange rates slaughtered UK business, but of-course hugely benefited banks! (and were a direct and predictable result of Thatcher's policies.)

The stock brokers play commodities all day long and currencies for that matter. They are either totally oblivous or simply do not care what damage they do to British industry.
Any move in the exchange rate can either make or break a business and as a direct consequence hundreds or thousands of jobs could go.Lets face it every time a recession hits its the labour that gets culled not the line managers on the bigger salaries.

Work always flows to the lowest cost country but that in itself damages an economy because it pushes the western economies into a recession.
The collapse of the western economies was a deliberate attempt to force concessions by from the various governments. Effectively threatening governments to give concessions and cash aid which will all be used to build factories overseas not in the west.

Not signing the Social Chapter back fired on us because it made us the cheapest place in Europe to get rid of labour! While Germany was the most expensive place to get rid of labour. So were did the axe fall United Kingdom, are people so dumb they don`t see the bigger picture only whats happening here and now in front of there noses?

#81

Russia is the cheapest place in Europe to get rid of labour, and things are getting better there all the time

I have a *new* idea. A new tax that would make very sound economic sense, that would be relevant to Britain as a unilateral move and could be presented to the population as a fair (and moderate) tax.

We have a fiat currency, where money is created by a small number of banks who 'create' it (electronically) to provide to those who wish to borrow it under licence from the government provided (i) the borrower promises to repay it and (ii) it is no more than three to ten times the amount of 'reserve' they hold as deposits. When repaid the created money is 'destroyed'.

Rather than tax their balance sheet, I would tax any created money at (say) 2% and rebate any destroyed money at (say) 1%. This would increase the cost of borrowing so imperceptibly that consumers would not notice and it would favour building societys (who hold a greater proportion of deposits vesus lending than do banks).

After all they have this superb money creating machine - why should they not pay to use it?

8. At 1:26pm on 20 Mar 2010, yam yzf wrote:
> As others have said, the tax will just be paid for by customers.

We already know that the banks can't pass ALL the tax on to their customers, as I'll explain in a minute. But let's see if they can pass ANY of it on. First, nobody would be daft enough to pay their wages into a bank if it cost them money, so that's out.
Second, banks can't lower the interest rates, as they are already zero. Even if banks could “lower” their rates, then we would invest in the bond market, the share market, the gold market, the housing market, the fruit and vegetable markets and the whatever market. So, that's a non-starter too.
So maybe, just maybe, they could raise interest rates for their mortgages. But that would free Britons from their obsession with owning propriety - why pay tax to own your place, when you can pay none and rent it. So that's another non-starter. So what's left? Of yes, the bonus pot, and executive wages. Yes, that's do nicely, sir (ka-ching)!

Anyway, we know the banks can't pass all the tax on to their customers, because they hate the proposed tax. If they thought could pass it on, they'd love it...

I'll believe it when I see it.

All this proves is what we already knew.
a) Regulation has never worked historically - because it's always under attack from the financial sector

b) The Tories will throw away their main political ideology (less Government) in order to win an election.

I think this and the 'lobbying scandal' Labour are embroiled in now just about sums up politics.

Corrupt, worthless, borderline criminals who are more worried about make up and appearance than they are policy.
...and most importantly none of them actually understand Economics.

If you think about a banking tax, it means something like this:

1 - Profits are extracted from the labour process by banks
2 - Government tax those profits
3 - Government unwisely spends those taxes by engaging private companies (PPI etc)
4 - Those companies make profits from the labour involved
5 - The Government taxes those profits and spends them in the private sector


A totally fake and inefficient system, all we are doing it diluting the surplus value from labour more and more. Which inevitabley leads to the workforce downing tools as they can no longer support themselves through working - like BA staff.

Don't take my word for it, Marks wrote a big 3 volume book on the subject, how it starts, how it behaves and eventually how it ends.

Sadly the modern Economist thinks they have resolved the contradictions with Government intervention and tinkering.

Current events beg to differ.

85. writingsonthewall wrote:

"Don't take my word for it, Marks wrote a big 3 volume book on the subject"

Is that the 'Marks' of 'Marks & Spencer'?

86. At 10:17am on 22 Mar 2010, the_fatcat wrote:

"Is that the 'Marks' of 'Marks & Spencer'?"

No Groucho Marks - one of the greatest minds of our time - HONK HONK!

He made modern day Economists look like chimps.

# 75. At 7:47pm on 21 Mar 2010, Eunice Burford wrote:

> MERVIN KING FROM THE BANK OF ENGLAND NEEDS REPLACING NOW AS ALL HE IS DOING
> IS MAKING THINGS WORSE FOR THE SAVERS OF BRITIAN. HE IS JUST LOOKING
> AFTER THE BANKS PROFITS BY LOW INTREST RATES FOR THE SAVER AND HIGH
> INTREST RATES FOR THE BORROWERS.

Spot on. All those broke bankers got a bonus from our taxes, while savers
like us got it in the neck. Go after their assets, I say, and beat those
flabby fat-cats into shape.

...still we don't have to rely on such a recent analysis of Economics - we can go back to this little quote:

"... The system of banking we have both equally and ever reprobated . I contemplate it as a blot left in all our constitutions, which, if not covered, will end in their destruction, which is already hit by the gamblers in corruption, and is sweeping away in its progress the fortunes and morals of our citizens. ..."

Thomas Jefferson May 28, 1816

Strangely this idea of banks gambling at the expense morals and citizens freedom is not a new one - so why should the electorate think either Bonehead Brown or calamity Cameron have the ability to prevent the theft which is the FIAT currency system?

200 years or criminality and it all stops with our next prime minister? - don't make me laugh

Tax is not enough - money lending needs to be social. Private banking must be ended - or it will end us.

Those calling for reform are kidding themselves - you can't reform tyranny - you can only decimate it.

If the Banks add value do they charge VAT on transactions like any other business?

Charles12345 "unlike Germany we produce no cars, white goods or electronics anymore"

Whilst I agree with you that we must ensure the financial sector is not driven off you denigrate our manufacturers unnecessarily.

I suggest you go to Sunderland where you will find 1000s of cars being produced and exported from one of the most efficient car manufacturing plants in Europe.

We do make lots of electronics - it is just the small scale specialist stuff that we do now.

We do have a manufacturing sector but it has diminished just as fast under Labour as the Tories.

78. John_from_Hendon A thoughtful, and thought provoking, post. Thank you.

91. At 11:22am on 22 Mar 2010, Justin150 wrote:
> Charles12345 "unlike Germany we produce no cars, white goods
> or electronics any more"

That's right. In the early 80's, we had a gormless PM, who met with Chancellor Kohl and Presidential Regan, and they all agreed that there was too much capacity in their industries, and they would all cut back. Only Mrs. Thatcher actually carried through! Consequently, Germany and America still manufacture, while the workshop of the world is reduced to money-shuffling.

> Whilst I agree with you that we must ensure the financial sector is not driven off

As long as they aren't driven off in luxury limos, I don't care where they wind up. I jail would be nice. They've stripped the country bare to keep a small patch in London flush, while the rest of the place has been allowed to go to the dogs. Now its “The City's” turn, but they don't like their own medicine.

> I suggest you go to Sunderland where you will find 1000s of cars
> being produced and exported from one of the most efficient
> car manufacturing plants in Europe.

Or go to nearby Redcar, where the plants have closed and everybody's on the dole.

> it is just the small scale specialist stuff

I couldn't put it better myself.

91. Justin150 'Whilst I agree with you that we must ensure the financial sector is not driven off you denigrate our manufacturers unnecessarily.'

It's a matter of wording and scale. If 80% of the economy is Service Sector, and not all of the rest is manufucturing, what do we have to export? To drive the theme made here home, if China has a population of 1.1 billion and a mean IQ of 105, that means it has something like 16% of its population with IQs of 120 and above. So, if anyone here thinks we will be exporting intelligent services, think again, our population is tiny, our mean IQ only 100, and it is probably falling too. The working population of China's 1.1 billion is probably in the region of 40%, and even if one reduces that to just sort out the males, that 16% of 20% is still an awful lot of smart people. As one only needs some smart people to run railroads, even if they're computerised, by comparison, we aren't producing nearly enough anymore, largely, ironically down to our sex equality legislation and promotion of females in the workplace (China does not do this), and the answer is definitely not education, education, education, alas, for predictably poorly understood reasons, that just makes matters worse!

I wonder how many can see any of this, and how it is critical to the health of the economy?

The genesis of these proposals is the total failure of banks to regulate themselves, and of politicians from all parties and officials to notice during the "boom" years that something was up. Including the sage of Lib Dems, Vince Cable. Where were the Treasury, the FSA, the Bank of England, the Select Committees, the EU, the Government, most particulary Brown and Darling, the Tories and the Lib Dems, and all the other people who were asleep at the wheel. Allowing the Goodwins and the rest to run riot?

And now they want to introduce a penalty tax as if it will solve the problem. Quite the opposite, it will risk damaging the two main banks in the state aid story, RBS and Lloyds, just when we, the people, ought to want them to succeed. If they are successful then we can sell our 80% stake in RBS and 41% in Lloyds at a profit. We ought to be looking for upwards of 41% of £60bn or more from LLoyds and a much bigger figure from our 80% share of RBS. If they are successful we get our money back and make a profit on our investment, we get British owned banks rather than ones like Santander waiting to pick up more of the scraps, we get tax on the profits the banks make, employment for hundreds of thousands of British people, and banks back to what they were before the crash.

A penalty tax on things we own is like taxing ourselves. And it may well drive away some of the banks who were not in the frame for the banking fiasco. But we do have virtual control on both Lloyds and RBS at the moment, and the best solution is for us to act like owners and exercise control so that when they are sold off they are burdened with nothing more than a set of regulations that will help to prevent a recurrence..

Jacques Cartier

Your memory of the 80s is not the same as mine. The demise of our motor and other industries was born in the 60s and 70s - does Red Robbo ring any bells? Or all the other trades union barons who deliberatly tried to bring this country to its knees? As Unite is doing again now?

I accept that there are differing views on Mrs Thatcher, but her main legacy was that she helped to cure this country of trade union militancy of the kind that left us (during a Labour Government) unable to bury our dead.

The Sunderland experience is a brilliant way of moving forward - we make foreign cars (as we were doing in the pre-Thatcher years with Ford) because we have understood that if the workers in Sunderland were to go back to the 60s and 70s the Japanese would be out of here in a flash.

The fundemental flaw in the UK economy is it systematically removed all its key industries in the early 1980`s and 1990`s. Why it did this well that ones easy to break the unions which had too much power. Now we have the reverse situation the city has too much power!
Lets face it the bankers in the west have had a good lifestlye from UK consumers for 20yrs.Basically they sold us all sorts of products like :
low cost endowment mortgages (pup No1),
private pensions that performed miserably (pup No2).
unemployment protection insurance with unfavourable conditions (pup No3).
Seems like the banks / insurance companies had poor judgement or was it?
Look at this another way, what if the plan was to claw back as much cash from Joe Public as possible. With no intention of paying you anything in the long term.
The objective was to claw back cash from UK workers which could then be diverted to the Asian economies, in effect every UK worker financed his /her own demise. The companies wanted to move production overseas what better way than to get your existing UK workforce to fund it!
The sudden switching off of consumption caught them by surprise, but most are so well established in Asia now they do not need the UK or Europe for that matter.
They then fold the UK companies uk declare them not viable or insolvent along with there pension schemes hey presto off they go again with a new set of aspiring Asian consumers! Keen to work and emulate western culture. They even conned the various governments around the world to chip in cash to make it happen!
The west is well and truely up the creek without a paddle we handed to the east when we transferred production capacity to them.No question the system is corrupt at least the German and the French governments told the car companies that they had to retain the car plants in there respective countries. What did the UK do no conditions, banks can move the money anywhere how would you know were it is in which country?

You have public debt standing at 12.5% of GDP and you intend to tax yourself? If you own the banks then you will be taxing yourself surely!
Oh what a tangled web we weave when we plan to deceive !
What should happen is a major fraud investigation,why for example was the report from a former Lehman executive dumped in the bin when it was presented to the senior guys?
Then a few days later the guy that exposed the discrepancies in the figures sacked and forced to sign a non disclosure agreement gagging him from talking to the press? Any management that does that is hiding something deceit becomes fraud when the bank collapses.
It all got hushed up becuase it would seriously under mine the general publics confidence in the banking system. Saying that it cannot get any lower than it is now!May be doing the right thing and jailing the individuals would do some good to a tainted industry.

Speculative banking investments need to be seperate from ordinary retail banking to restore the general publics confidence in the banking system.The speculative banking side should then borrow cash and be charged interest from other financial institutions like anybody else. That way they will be extremely cautious in how they invest it!
If they make bad investments and they lose the cash they go under just like everybody else when you gamble at the bookers you lose your shirt!
Can somebody explain to me why the government has not instigated this reform?

96. majorroadaheadagain2 'Your memory of the 80s is not the same as mine. The demise of our motor and other industries was born in the 60s and 70s - does Red Robbo ring any bells? Or all the other trades union barons who deliberately tried to bring this country to its knees? As Unite is doing again now?

I accept that there are differing views on Mrs Thatcher, but her main legacy was that she helped to cure this country of trade union militancy of the kind that left us (during a Labour Government) unable to bury our dead.'

Trotskyite Militant Tendency infiltrated the Stalinist Labour Party, they were anarchists. Trotskyism/Bolshevism was used (by the German High Command) to pull down the Tsarist state in 1917 (to get Russia off their Eastern Front). Stalin purged them in the 1920s in order to build what was effectively a Russian Labour Party in the USSR based on principles you'll find in Sidney Webb and the Fabians etc. The USA became the home of Trotskyism and its derivatives (Schactmanites) who morphed into the Neoconservatives. Today we see these throughout Europe as Social Democrats in the Socialist International, the Greek PM being its current President. They are closely allied with the Wall Street investment banks.

Thatcher was an anarchist (the Grey Cardinal was Keith Jospeph). She had no better friends/useful idiots than Militant Tendency and the SDP.

It seems that the banks and the country are inextricably linked now, both with the same problem of toxic off balance sheet assets, and if one fails they both fail. As long as the toxic and less toxic off-balance sheet assets continue to haunt the banks and the sovereign state, any talk of banking tax is just a poor attempt at buying more time and solves nothing fundamental for either over-leveraged party.

I have no idea how the govt can get out of the crazy off balance sheet leveraging and debt they have accumulated, (this is the 800lb gorilla that the govt are trying to hide from us with their smoke and mirrors policies) But with the banks, why couldnt they have created those good bad banks ie new banks which buy the good assets of the lloyds and northern rocks, and act as responsible lenders with sensible reserve ratios and no gambled off balance sheet assets. That way we'd have a healthy banking system and the lloyds et all can be left with their dross to go bankrupt gracefully.

As I say, the govt has a much bigger problem of its very own making with the private-public "infrastructure" deals they have set up, So unless they are going to take 5000% tax from the banks, no bank levy is going to protect the country from the hundreds of billions that could suddenly appear from the off balance sheets, asking to be settled.

Greece's problems are small potatoes compared to UK, and a puny bank tax, or extra income tax, or a few billion in public spending cuts, or any of the other ideas they have dreamt up to piss everyone off wont do anything. As I see it, the govt took the wrong option with the banking crisis, and everything that flows from their small minds and the cloned brain cells of the tories too, just compounds this mistake. Even the lib dems cant get past tinkering stage. None of them are getting my vote.