As the outgoing Bank of England Governor, Sir Mervyn King blames "The System" rather than admit what he did not do to correct matters when everything was going wrong !
To say that low interest rates provoked Bankers to search desperately for higher returns is too facile. Bankers abandoned normal City and Financial principles when they started "gambling" on stock exchanges.
Normally Bankers are not expected to "gamble". True for many years Bankers made "turns" on the variations of "currency exchanges", but their potential losses were covered on a daily basis.
Recently the "gambles" by Bankers were much more "long term", but due to the use of computers, daily coverage was not verified "daily" by Directors ! It is at this point that enormous risks were taken and later big losses were discovered ! Directors were at fault because the internal control system of banks was at fault !
It is true that Bank Interest Rates are low everywhere except in countries where there is hyper inflation. Why, however are rates low ? Is it not so that Banks can obtain "Tap" money more cheaply, and then to lend and provoke a "kick-start" of industries and consumption ?
Low Interest Rates have destroyed Private Pension Funds in Britain and elsewhere but they were not destined to destroy Banks ! Now the aim is to "Save the Euro" at all costs. The result is that there is stagnation in the EU and elsewhere.
What will happen next ? What will the next aim of Bankers be ?
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