The news about HSBC being whacked for $1 billion plus by the USA for serial money laundering whilst the formerly respectable Standard Chartered was being done for $400 million plus for below the belt money games on Iranian sanctions came as little surprise in some quarters.
In Rowans Blog, hat tip to Nicholas Shaxson, an insider in the last couple of days has roundly described the City of
as a criminal
sink. It is a longish and sharp piece
but if he is right, as he seems to be, one can understand. A couple of separate paragraphs are quoted
“The City of London, in recent years, has become a criminal sink, populated by a criminogenic community of spivs and wideboys made wealthy beyond the dreams of avarice, by the ludicrous pay schemes and bonus awards, made possible in an environment where all sense of worth, value, and ordinary law-conformity, has been jettisoned, in return for vast sums of money far and beyond anything that might normally have been paid only a few years ago. The entire financial sector has become an organised criminal entity.
You can get away with just about anything in London, money laundering through the banks here is regular and commonplace, because no-one takes very much notice of the Money Laundering Regulations.
I met an experienced banker this week who has worked for a major bank here for many years and only this week he took his first anti-money laundering training session, because his institution is finally under the remedial cosh! You can move the proceeds of foreign tax evasion, you can launder the contents of corrupt dictators’ slush fund accounts, you can engage in sanctions abuse or the proceeds of drug trafficking, because no-one is going to stop you, and even if you do eventually get disciplined, you only get fined, and that falls on the shoulders of your shareholders.”
Meanwhile over at the LSE, there is disquiet about the Autumn Statement by Kimberley Trewhitt, entitled “Without further reform efforts to bring the public finances under control in this Parliament will be undone”. The essence of it is that the government has not yet begun to fully grasp the extent of changes that will have to be made.
The final summary of her article is below:
“The Government’s current austerity plans fail to address this long-term unsustainability. The health budget is ring-fenced and the Government is unwilling to renege on manifesto promises to pensioners such as the Winter Fuel Allowance. The introduction of the triple lock indexation on the state pension and plans to introduce a single tier pension also have significant cost implications.
The Government needs to take action now otherwise the public sector debt will be on an upward trajectory again from the 2030s. The OBR has projected that it will reach almost 90 per cent of GDP by 2060. Efforts to bring the public finances under control in this Parliament will be undone.
Furthermore, the costs of tackling the challenge will be greater further down the line. Not only will financial costs be higher, but politically reform will be more difficult; by 2020 45 per cent of voters will be aged over 55.
Commitment to reforming public services and tackling unsustainable spending areas to put the public finances on a sound footing is the only way to ensure economic stability and growth in the long run. The Autumn Statement was a missed opportunity in this sense.
Although apparently separate the two do go together. Today Nick Shaxson in his blog in the long transcript of a TV interview makes the complexity of the current situation clear and Richard Murphy points to the extensive complicity of the Big Four accountancy firms in all the sharper and less desirable practices.
What brings all this together is that we have a government that cannot govern. It is a member of the EU which is becoming less of a union by the day. Meanwhile the world depends on a money system much of which is locked in secrecy and not accountable to anyone.
We are hearing a lot about the Mayan prophecies about the end of the world, if they were really talking about the collapse of their trading and monetary systems they may be more right than we think.