UKIP- Bank customers need protection, says Farage

brad12jy · 17-09-2008, 08:43 PM

Bank customers need protection, says Farage - UK Independence Party

Anthony Butcher · 17-09-2008, 09:56 PM

Text in full:

Quote:

UKIP leader Nigel Farage MEP has called for better supervision of financial services in the wake of the international banking crisis.
"It is clear that we need to have some sensible rules to prevent the sort of excesses that have led to the current turmoil," said Mr Farage, a former City trader.

But he warned against over-reaction by governments. "What we don't need is a blizzard of regulation that will damage the ability of the finance industry to recover from its present difficulties and put itself back on the path of growth.

"There is no doubt that the deregulation of the past two decades has helped to promote unprecedented growth in financial services and provided a massive boost to the global economy. But as the boom continued, the hands-off approach by regulatory authorities became a careless one, with the result that some banks and others took risks that should have sounded alarm bells."

Mr Farage said the difficulties of Northern Rock, the US mortgage giants Freddie Mac and Fannie Mae and the huge insurance company AIG – along with the collapse in the share price of the British bank HBOS which has forced it into merger talks – demonstrated that the primary element of regulation must be to protect savers, borrowers and consumers.

"Banks are answerable to the markets and their shareholders and should be able to look after themselves – or fail if they can't. But it is the responsibility of government to make sure that bank customers, the innocent bystanders in market corrections, do not lose their savings as a result of financial risks taken by others that they do not understand and over which they have no control."

He said one simple measure would be the application of something like the American Glass-Steagall Act, introduced during the great depression of the 1930s, which separated investment banking from retail banking. The act was repealed during the fever of financial deregulation of the 1990s.

"It is vital that we restore public confidence in high street banks," Mr Farage said, "and a good way of doing that is to make a clear distinction between them and the complex financial activities of investment bankers, which can go seriously wrong and produce the sort of crisis we are seeing now.

"We must make sure that the effects of investment bankers' follies do not spread into retail banking, the service we all depend on for our savings, our mortgages and our credit."

It was astonishing, Mr Farage said, that in the midst of the financial crisis the British government seemed to be paying more attention to dissent within the Labour Party than to the problems and anxieties of its citizens.

Interesting to see UKIP commenting on current affairs. It started off a little wishy-washy, but moved into a good solid statement, and unusually for UKIP, actually offered a proposed policy solution. I have no idea about the merits of the proposal, but it is a step in the right direction to make one. Good stuff.

gimlet · 18-09-2008, 08:11 AM

This statement does not go to the heart of the problem - that of money creation/supply. Sadly UKIP does not talk about money reform (who does? The BNP used to - still may). The creation of money by banks (97%) is where the problem lay. With the banks now operating uncontrolled as happy bedfellows with the main parties I see no reform on the horizon, just corporate powers jostling for the top spot, with us as the paying prawns.

SomersetYokel · 18-09-2008, 09:24 AM

Gimlet is close to the truth. Only central banks can manufacture money and the Bank of England, US Fed and the ECB supplied far to much money at far to cheap a price, i.e. interest rate, for far too long. They are the root cause of the economy built on debt, asset price inflation and reckless lending. Banks need to look at how they reward their senior staff. Any ful can make money in a rising market. (Nigel Molesworth). Warren Buffet - the only investor who has consistently made money all his life - has warned about the dangers for years of derivatives etc. The problem is as it is in UKIP, the ordinary members have no say in running the party or bank and those at the top get their snouts in the trough with the inevitable consequences.

Resigned Member · 18-09-2008, 10:15 AM

I doubt that Farage could write what at least is a grammatically correct statement.
Without looking in detail it clearly misses the point already covered by the Telegraph and Richard North that the EUcommission must be involved in all these merger decisions-surely a prime UKIP selling point.
It also assumes the superior wisdom of government-yet these are the ones who have created the crisis by printing money.

Geoffrey Collier · 18-09-2008, 10:43 AM

The importance of the national money supply levels has dimished, to become a peripheral economic factor, over the past forty years. Credit is the problem, not the level of M1, (reflected in M2, and to confuse us further, M0 was 'invented' in 1983 to assess the level of money in actual circulation) basically, this is the 'small' change' in the economy. Take an actual example. The Bristol & West lend about £6.50, for every £1 they have depostied with them. In other words credit is nothing but a book-keeping exercise. Should there be a 'run on deposits' the banks borrow short-term from national and international financial institutions.

Protecting the depositor has merit, but to what extent? At the moment it is a guaranteed ceiling of £35,000. for deposits in each bank. What level does NF think it should be? What is being asked? Should the government under-right all bank deposits, pension funds, insurance policies, and everything else that you can think of? In addition, capital fluidity to keep the markets functioning, must also be provided by the governments? Major financial institutions are being nationalised in the USA, at the behest of the institutional managers themselves. Now General Motors wants the US government to finance to re-tooling of their factories, in exchange for producing jobs. As Sir Alan Budd said only yesterday, we cannot look to the past for guidance, because a precedent does not exist for what is happening now. This is the nature of the problem.

As I have posted previously on this forum, since W.W.2, the material standard of living for millions of people has improved dramatically. That was very fortunate and desirable.
The down-side is, that debt has replaced poverty, over the same period, as a mechanism of social control. The poor have little choice and neither do the indebted. Capital liquidity made the credit boom possible, but that has now disappeared. Servicing their mortgages and other debts will now become impossible for millions. We are in serious trouble, and I am glad the NF is applying his mind to the problem.

Geoffrey Collier · 18-09-2008, 04:49 PM

I Knew as soon as I saw it; underwrite, no need to phone.

17-09-2008, 08:43 PM	#1 (permalink)
brad12jy Senior Member Join Date: Nov 2007 Location: UK Posts: 662	UKIP- Bank customers need protection, says Farage Bank customers need protection, says Farage - UK Independence Party __________________ My ignore list - Tony Bennett

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

18-09-2008, 08:11 AM	#3 (permalink)
gimlet Senior Member Join Date: Oct 2004 Location: Shropshire Posts: 833	This statement does not go to the heart of the problem - that of money creation/supply. Sadly UKIP does not talk about money reform (who does? The BNP used to - still may). The creation of money by banks (97%) is where the problem lay. With the banks now operating uncontrolled as happy bedfellows with the main parties I see no reform on the horizon, just corporate powers jostling for the top spot, with us as the paying prawns.

18-09-2008, 09:24 AM	#4 (permalink)
SomersetYokel Member Join Date: Jul 2008 Posts: 136	Gimlet is close to the truth. Only central banks can manufacture money and the Bank of England, US Fed and the ECB supplied far to much money at far to cheap a price, i.e. interest rate, for far too long. They are the root cause of the economy built on debt, asset price inflation and reckless lending. Banks need to look at how they reward their senior staff. Any ful can make money in a rising market. (Nigel Molesworth). Warren Buffet - the only investor who has consistently made money all his life - has warned about the dangers for years of derivatives etc. The problem is as it is in UKIP, the ordinary members have no say in running the party or bank and those at the top get their snouts in the trough with the inevitable consequences.

18-09-2008, 10:15 AM	#5 (permalink)
Resigned Member Member Join Date: Nov 2005 Posts: 154	I doubt that Farage could write what at least is a grammatically correct statement. Without looking in detail it clearly misses the point already covered by the Telegraph and Richard North that the EUcommission must be involved in all these merger decisions-surely a prime UKIP selling point. It also assumes the superior wisdom of government-yet these are the ones who have created the crisis by printing money.

18-09-2008, 10:43 AM	#6 (permalink)
Geoffrey Collier Senior Member Join Date: Dec 2007 Posts: 1,160	The importance of the national money supply levels has dimished, to become a peripheral economic factor, over the past forty years. Credit is the problem, not the level of M1, (reflected in M2, and to confuse us further, M0 was 'invented' in 1983 to assess the level of money in actual circulation) basically, this is the 'small' change' in the economy. Take an actual example. The Bristol & West lend about £6.50, for every £1 they have depostied with them. In other words credit is nothing but a book-keeping exercise. Should there be a 'run on deposits' the banks borrow short-term from national and international financial institutions. Protecting the depositor has merit, but to what extent? At the moment it is a guaranteed ceiling of £35,000. for deposits in each bank. What level does NF think it should be? What is being asked? Should the government under-right all bank deposits, pension funds, insurance policies, and everything else that you can think of? In addition, capital fluidity to keep the markets functioning, must also be provided by the governments? Major financial institutions are being nationalised in the USA, at the behest of the institutional managers themselves. Now General Motors wants the US government to finance to re-tooling of their factories, in exchange for producing jobs. As Sir Alan Budd said only yesterday, we cannot look to the past for guidance, because a precedent does not exist for what is happening now. This is the nature of the problem. As I have posted previously on this forum, since W.W.2, the material standard of living for millions of people has improved dramatically. That was very fortunate and desirable. The down-side is, that debt has replaced poverty, over the same period, as a mechanism of social control. The poor have little choice and neither do the indebted. Capital liquidity made the credit boom possible, but that has now disappeared. Servicing their mortgages and other debts will now become impossible for millions. We are in serious trouble, and I am glad the NF is applying his mind to the problem.

18-09-2008, 04:49 PM	#7 (permalink)
Geoffrey Collier Senior Member Join Date: Dec 2007 Posts: 1,160	I Knew as soon as I saw it; underwrite, no need to phone.