While many writers in the business supplements have moved on to beating around the debris looking for somebody to blame, and others on the left are advancing vague and unfeasibly triumphant pronouncements about the death of capitalism while proposing nothing viable as a substitute (the proportion of the piece dedicated to outlining the problem is almost always much higher than the proportion outlining solutions) – while most people have moved on, remedials like me are still trying to work out exactly what went wrong with banking. My ‘exactly’ is exacting – I’m still hung up on what money actually is or at least (given there’s no consensus) the different definitions. Ruhle’s abridged Marx helps. A dumbass 47-minute animation by Paul Grignon somebody sent me called ‘Money As Debt‘ complete with greedy bankers, allusions to conspiracies and tentacles of international finance reaching round the world didn’t help.
Banking too – specifically what do people mean when they talk menacingly on Any Answers about punishing ‘bankers’? Investment bankers, certainly (whatever it is they do exactly) but what about merchant bankers? Retail bankers? And what about fund investment managers – are they bankers? Are stock brokers? Traders? There isn’t even a Wikipedia article for ‘banker’. It’s very frustrating trying to follow the financial crisis when there’s no glossary.
In his birds-eye view of what’s gone wrong, Kulvinder on Pickled Politics skips the definition of ‘banker’ I’m hung up on today. He is able to do this because he’s not interested in the culpability or scapegoat-worthiness of individual roles (he dedicates a sentence to panning the traders who ignored their risk analysts and the raters who gave the packaged-up debts the seal of approval). Instead he explains how things happened in such a way that you could retell it at your children’s bedside as a modern, open-ended but cautionary bedtime story. It’s a high-level explanation with the occasional helpful tangent, such as why the debate about what went wrong is nasty. I particularly appreciated the way he explained the degrees of separation and connection between, say, the insurance company AIG and the investment banks which taken out insurance on their packaged-up debt (which they were treating as ‘core capital’).
Not being interested in the culpability of individual roles myself, I’m interested in what went wrong and whether this included negligence or recklessness, or whether it is an inevitable function of the current system. Clearly something has to change, and surely fatalism about boom and bust is not helpful. This is why I’ll be listening to Inside the Banking Blunders, Tuesday 14 October 2008, 2000 BST, repeated Sunday 19 October, 1700, on BBC Radio 4’s File On 4.
“Hundreds of lawsuits are being filed in the USA by banks and financial institutions arguing over who is to blame for the crisis in the global financial markets. Michael Robinson investigates and reveals what those legal documents tell us about the banking system and the effectiveness of our regulators”