Wednesday, 15 July 2009

Bank sues itself. Mind boggles.

Now I've heard it all - a US bank is suing itself.

We all know now how topsy-turvy the world of international finance has become - and how the banks need tough regulation to make sure they remember that money is the servant of society, not the other way round.

But using up court time to settle a dispute between one department and another in the same bank?

It's really little wonder that we're facing a tough economic time.

We really need some tough regulations to bring them back to earth with a bump. Banks should be owned by the community, and not run for profit.

They should limit the amount they lend - and how they decide who to lend it to - and they should cut costs and improve accessibility.

And perhaps most importantly, the business of managing domestic and small business banking and financial affairs should be kept completely separate from the 'asset management' activities (read gambling with your cash, safe in the knowledge that the taxpayer will bail them out if it all goes wrong).

Why? Because activities like creating, buying and selling increasingly-complicated financial products based on future market conditions, trading in derivatives, slicing up, parcelling and trading mortgages and business loans are the reason we're in this mess in the first place.

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