HEADING FOR BANKING DISASTER 2

A letter sent to a number of newspapers. Only one published it so far. Well done the Edinburgh Evening News.

Dear Editor,

Jeremy Hunt’s disastrous roll-back of banking regulations, imposed after the 2007/8 global financial crisis, is extreme folly. He had the effrontery to announce them in Edinburgh, where responsible banking was pioneered.^[1]

Since the early 19^th century, Scottish banks had a reputation for ethical and sound banking, stemming from the 1925-6 English banking crisis when 61 English banks failed, triggering a world-wide crisis. But Scottish banks, which were organised along join-stock principles, came through this crisis unscathed.^[2] Scottish bankers even had to pass a Banking Qualification that maintained the high standards and levels of trust. 

Then neoliberal ideology took over in the late 1970s. Thatcher’s ‘Big Bang’ eliminated banking regulations and allowed banks to operate as private companies with the sole objective of maximising profits. Any consideration of the public good or national interest was tossed aside. 

We know what happened to RBS. Fred Goodwin, who never took a banking qualification, led the bank to a spectacular collapse in October 2008. The government bailed it out and took it over. Thousands of businesses and people lost money. The bank has never recovered. 

After the crisis, the government set minimal banking regulations, but many warned they didn’t go far enough and that another financial crisis was likely. 

The global financial system is teetering and Hunt foolishly believes that by stripping away regulations, he’ll revive the Brexit-induced sagging fortunes of the City of London, a global centre for money laundering. Enriching the banking oligarchs is what this government prioritises. 

Meanwhile, Scots are freezing and banks and energy companies are profiteering. The way to restore sanity is for Scotland to restore its sovereignty.  

Yours sincerely,

Leah Gunn Barrett