Consider this fictional scenario of a group of MPs questioning a group of bankers about a fictional financial crisis.
How the world works.
MP1 : what is your name?
Banker : Sir Tom McKillop
MP2 : are you sorry for what has happened?
McKillop : Yes, but I have loadsamoney so I’ll be OK.
MP3 : do you think we know what we are talking about today?
McKillop : No, that is why I have attended because I know you know nothing and will ask questions of little relevance or insight.
MP4 : but you do think we MPs look and sound like we are clever and giving you the grilling you deserve?
McKillop: Yes.
So that’s how the world works.
Here’s how the world should work.
MP1 : what is your name?
Banker : Sir Tom McKillop
MP1: did you attend the Bilderberg meeting last year?
McKillop : Yes.
MP2 : Was the financial crash discussed there, and if so what was said about it and by whom?
McKillop : I am not at liberty to divulge such information.
MP2: Why not?
McKillop : because I will probably die in an accident or be ‘suicided’.
MP3 : You realise that we, the people, have given you a tremendous, possibly God-like, power to create money for the economy?
McKillop : Yes.
MP3 : How did you use that power?
McKillop : We created money for the economy.
MP4 : How? How did you create the money? And for whom?
McKillop : First we encouraged lending with low interest rates and got our friends in the BBC to show lots of home improvement and relocation programmes to encourage people to increase the values in their homes and put them up for sale in order to buy more expensive homes. This gave us loads of debt instruments based on those mortgages and we sold them to raise cash to fund gambling in derivatives, which has obviously failed.
MP2: were you asked or told to do this by somebody?
McKillop : I am not at liberty to divulge that information.
MP2: Why not?
McKillop : because I will probably die in an accident or be ‘suicided’.
MP1 : So you accept that you have a tremendous responsibility because you create money for our economy that we all depend on for our jobs and homes?
McKillop : Yes.
MP3 : So why should you not be prosecuted under The Fraud Act 2006 Section 4?
McKillop : because what I did was not fraud.
MP1 : How?
McKillop : we, and by we I mean ALL banks, were simply trying to make money.
MP2: So you think that risking the stability of the whole economy, whole global economy, is acceptable so that you and your organisation can make loads of money?
McKillop : absolutely.
MP3 : What is a bank?
McKillop : a bank is a money creating machine.
MP4 : Can you expand on that answer?
McKillop : Yes. The majority of people believe that a bank is simply a depository of funds and that we lend out deposits as loans and mortgages from those deposits alone, and pay interest and earn our high salaries from this. This is not quite the whole truth. A bank can issue loans and mortgages many times the quantity on deposit. Thus a bank creates money. But it cannot create money for itself. It needs to generate demand. So we encouraged a property boom. The more demand, the more money we created, so that eventually we had loaned out FIVE times the quantity we had on deposit.
MP1 : did you tell anyone about this?
McKillop : The Bank of England knew about this a few years ago.
MP2 : What about the FSA?
McKillop : We had no legal obligation to do so. It is up to the FSA to find out about it, and as we fund the FSA we have a certain degree of control over it, and the quality of person it employs. Our main man is Hector Sants. They weren’t going to do much. We have too much power.
MP3 : What do you mean by that?
McKillop : Look what’s happened. We banks have blown the money we should have used to grow the British economy on gambling, we lost, and you’ve bailed us out with hundreds of billions of pounds! You go down to your local casino and lose £100 on betting red when it lands on black and ask the government to pay your debts. See what kind of answer you’ll get.
MP1 : So you would compare what you have done to gambling? If so, are gambling laws applicable to banking?
McKillop : It depends on what branch of banking you are looking at.
MP3 : Let’s go back to this “it was not fraud” claim. Now you claimed that what you had done was not fraud and that therefore you could not be charged under The Fraud Act 2006 Section 4 Fraud by Abuse of Position. May I quote what that section states:
4 Fraud by abuse of position
(1) A person is in breach of this section if he—
(a) occupies a position in which he is expected to safeguard, or not to act
against, the financial interests of another person,
(b) dishonestly abuses that position, and
(c) intends, by means of the abuse of that position—
(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss.
(2) A person may be regarded as having abused his position even though his
conduct consisted of an omission rather than an act.
Now forgive me, but to me it is bleedin’ obvious that you satisfied point 4 (1) (a), because as banks you have the responsibility to safeguard the whole British economy and the well being of the British people, not just the bank accounts of yourselves, you satisfied point 4 (1) (b) because you dishonestly abused that position because although you did not tell anyone of your plan you must have known that taking such a risk had huge implications if it went wrong and you did not consult regulatory bodies to check that such a plan was acceptable, and regarding points 4 (1) (c) (i) and (ii) you intended to make a huge gain for yourself and your organisation in the full knowledge that if it all went wrong the losses incurred on the British taxpayer would be huge, in terms of job losses and resulting homelessness, and possibly with the full knowledge that you would be bailed out and safe because you are fully aware of your privileged position.
What would you say to that?
McKillop : [silence]
MP1 : What is your answer to that, Sir Tom McKillop?
McKillop : [silence]
British taxpaying public : TO THE STOCKS! TO PRISON WITH THE BANKSTER! LOCK HIM UP WITH THE KIDDIE FIDDLERS AND THROW AWAY THE KEY!
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