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Banking Industry

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Thanks for the bail-out. Cheers easy!


What’s it all about?

Banks, eh? Love them or hate them you have to hate them. The banking industry exists for one thing and one thing only: to make money, and lots of it. Never, ever forget that, chummy.

The Method

Banks start by collecting together all of the relatively little amounts of money that you and I leave with them for what they like to call 'safe keeping'. Then as soon as you’ve turned your back and without as much as a by-your-leave they do one of a number of things with it, such as:

  • Invest it in stocks and shares. In reality this is just another form of gambling, but over a long period of time should result in a profit. However, when the market crashes, as it does every now and then, the money is lost and everyone blubs or jumps off buildings.
  • Let someone else have it for a while. But, and this is the cunning part, they charge interest on the money that they let borrowers have and, so the theory goes, make a profit.

All well and good I hear you say. It’s nothing but good drills and the foundation of our economic system, you continue. It allows you to get a loan for your house, car or business, you prattle on like some demented old git. Well yes, and no.

The Problem

The system only works if people are responsible and trustworthy, and this is where it all goes horribly wrong. On the one hand we have those at the bottom. They want that nice shiny new 58-inch wide screen Ferrari with central heating that they’ve seen, but they’ve only got 47p. No problem, the bank will let them have the rest. Oh dear. Both parties have, to use the technical term, acted like cunts.

On the other hand we have those at the top. These are the senior bankers and they are very wise. They know that no matter what happens to the sweaty plebs at the bottom they will still end up with more money than any lottery winner, even (and this is the best bit) if they get sacked.

Crisis – When it all goes tits!

For many years the system worked just swimmingly. Markets generally rose, Mr and Mrs Chav could buy that solid gold speedboat for the liddle kiddies, the banks simply borrowed off each other if they needed more money and Gordon Brown could claim that he was God. It was a happy time when extensions of credit flowed as easily as piss into a paraplegic’s colostomy bag. It couldn’t last.

With no-one really giving a toss the banks gave out more money than they actually had, to people who couldn’t pay it back, in a system that was in reality little more than a badly constructed house of cards. Someone noticed. Panic! The banks stopped loaning money because they didn’t actually have any and the wheels of our economic system quickly fell off. All of a sudden people couldn’t be paid and had to be sacked, businesses closed and MPs' expense accounts were reduced to a mere six figures.

The result is that you, dear taxpayer, have now bought the banks at huge expense, thereby giving them enough financial wherewithal to allow you to withdraw the very money from them that was yours in the first place. All this, don’t forget, because you left your money with them for 'safe keeping'.

Summary

Those at the top get rich and you get shafted. And that’s how the banking industry, or any other industry for that matter, works.

Next week: knighthoods for senior civil servants and the art of long-term decision making. Until then, ta ta!