From Socialist Voice, July 2010

Banking union on the banking reports

IBOA, the union representing workers in the banking industry, issued a telling statement following the recent publication of the Regling-Watson Report and the report of the Governor of the Central Bank, Patrick Honohan, on what they describe as the banking crisis.
     The statement drew attention to the fact that those in the industry who drove reckless lending policies largely remain at the helm of these institutions, and instead of facing the guillotine they appear to be free to sack workers, cut pay, and attack collective agreements and terms and conditions (while vigorously protecting their own).
     It also pointed out that over the last decade it has repeatedly called for a national banking forum to oversee and regulate the role of banking in the economy, a call that remained unanswered by those in the Government and by shareholders as they profited with the banks’ senior management.
     The unique viewpoint of these workers is that they have witnessed at first hand the fundamental shift in the role of banking and finance capital in the economy over the last thirty years, as the general secretary of IBOA, Larry Broderick, has stated.
     “IBOA intends to contribute actively to the work of the [Banking] Commission by highlighting the unique perspective of our members—who have a long-term commitment to building a financial services sector which would be primarily driven by consistent service rather than quick profit and which would seek to facilitate rather than dominate economic and social development.”
     Banking has changed dramatically. Previously acting as a support to business and capital accumulation elsewhere, it is now the fundamental object of capital investment and accumulation in the global economy. It is no longer a support to the economy: it is the economy.
     By stating that he wishes to see banking facilitate rather than dominate the economy, Larry Broderick is acknowledging what Socialist Voice has been pointing out for some time: the phenomenon known as financialisation.
     Finance, including debt, has become the defining feature of the capitalist system, the primary source for investment, capital creation, and capital accumulation.
     But rather than being some great conspiratorial take-over by a handful of global bankers and puppet governments, this actually reflects a fundamental shift in the nature of the system and most importantly as a consequence of the crisis of stagnation that exists in the real economy. For capitalism to function there must be an accumulation process, a method by which capital can be invested and profit created.
     Let its record speak for itself. Global growth in GDP averaged over 5 per cent in the 1960s, 4.5 per cent in the 70s, 3.4 per cent in the 80s, and 2.9 per cent in the 90s. If you take military production out of this it is even less impressive. The real economy no longer serves as an avenue for investment as an accumulation process. It is in constant crisis.
     This is where progressive people without a grasp of political economy are failing to see the bigger picture. This is not a banking crisis, and not merely a financial crisis, but a crisis of the entire system. The financial crisis is in addition to and on top of the constant and continuing stagnation of the real economy.
     It’s extremely difficult to see how finance can return to a service or support role, given its primary function in today’s economy. What is more likely, and increasingly evident, is the introduction of even more adventurous and unstable financial products, leaving citizens further exposed to debt and the vagaries of the unscrupulous and undemocratic market.

Home page  >  Publications  >  Socialist Voice  >  July 2010  >  Banking union on the banking reports
Baile  >  Foilseacháin  >  Socialist Voice  >  Iúil 2010  >  Banking union on the banking reports