In the last couple of
decades our banks and bankers have gone from being pillars of the community and
respected authority figures in national affairs to be thought of as a bunch of greedy
shysters out to screw us and criminals to be punished.
The latest headlines about
banks losing unimaginable sums of money only to be given King's ransoms in
their annual bonuses do not help the image.
Inevitably, ordinary persons want to know why they cannot be brought to
heel, controlled and answerable.
Between the media, who
seem to know little and understand less and the politicians, assumed to be in
conspiracy with them and on their payrolls there is a lot of noise and
posturing but little or no action, nor much reality behind the promises and
alleged policies.
What has happened is that
the banks we knew, saw and dealt with were once located in places we knew and
were evident and identifiable. You could
walk around city centres and the City of London and say this was this and that
was that with a degree of certainty and truth.
This is no longer the
case. Tax Justice Network has a key
interest in this question because of its pursuit of tax losses to havens abroad
which in the last half century have grown hugely in extent and effective
monetary power.
Even there, despite the
secrecy there has been the idea that they were locations which could be seen
and visited and had buildings and staff where the business was located.
But in recent years the
complexity enabled to accounting and management systems by the series of
digital revolutions have transformed this.
What has happened is that
another banking system has grown up, called "Shadow Banking", which
is not a good way to describe it. Perhaps
"Space Time Banking" might, but that also is a little too loose and
confusing. An article linked from the
Tax Justice web site tells some of the tale.
It is by Anastasia
Nesvetailova of The City University who tells us that in the last three to four
decades there has grown up what is a parallel universe of banking. It is located nowhere, is difficult to trace and
therefore to regulate. They have become
used by the financial elite to create "silos of silence".
Whether you like or hate
the idea, or cannot understand or accept them it is argued that they
are now vital to credit creation and therefore the function of all our
money economies. If troubles arise they
are the key to what might happen and what might be done.
She concludes: "The real risk is that so
much of this is rent-seeking activity: extracting wealth and bringing forwards
consumption into the present, at the expense of future generations. Or, to put it more pithily: we will pay for
this."
So if another bust happens it is likely that
nobody will know what is happening, why or how it can be dealt with.