Novelist. Author of APSARAS and tales from the beautiful Saigh Valley. First person to quantify spiritual values.

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Friday 3 February 2012

One nation banking

I haven't a clue what Mr. Miliband means by one nation banking but again the two key issues of Banking have been missed.

1. Why is it that Banking generates so much profit?
2. Why doesn't all the profit go to the shareholder rather than to employees as bonuses?

That many Banks have been making huge profits is undeniable. That some have failed, like Lehman Brothers and Barings, tells us that it is  largely the 'Investment' side where the answer lies to the first question. If Banks were split as many have proposed into Retail banking where public money is managed and private investment banking, there would be no problem. Nobody would care what happened to the investment banks, except their shareholders. It is different with retail banking. Now, I may be wrong, but I suspect profits are not so high in this sector. If they were, I would wonder why anyone would want to start a company, making, say, steel on the Isle of Sheppey when they would be better opening a bank, like Virgin.

The question of bonuses given to people for simply doing their job is a sticky one. However, if I was a bank shareholder, I would want to know why the billions of pounds is not being shared amongst the owners of the Company. I suspect the answer to this lies in the close and unofficial relationship between the major shareholders, pension funds etc, and the executive in a symbiotic arrangement that rewards them all to the detriment of the small shareholders. The whole thing stinks of corruption and the sooner the Government recognises this and bows to public sentiment the sooner we can think of 'One Nation' banking.

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