The harsh reality - Bank power a threat to our society
Indeed, the more difficult the circumstances, the more desperate the Government, the stronger the banks’ hand becomes. Our reliance on the banks has loaded the dice in the financiers’ favour. No matter how responsible or irresponsible our bankers know that this power can insulate them from the consequences of their actions. This is not right but it is the reality of Ireland at Christmas 2008.
When the security of our society is dependent on self-interested, self-serving commercial institutions it matters little enough what the minor details are but the big picture reality is unavoidable. The banks cannot be allowed to fail or chaos will ensue. This is reflected by the fact that so many of our senior bankers remain in place even if they have become as reliant on the Government as the Government is on them.
They, no matter what they did to get us to this sorry point, still hold a hand of cards that may sustain them.
In this context it was reassuring to hear Finance Minister Brian Lenihan say yesterday morning that he will review the impact the Government’s €7.5 billion recapitalisation in the next few weeks. It was especially welcome to hear him hint that if the markets did not respond positively he would review the situation, though how much he can do remains to be seen.
It might be cheering to imagine that he could, metaphorically at least, throw a few senior bank executives to the mob but if he were to do that the bankers would not be alone. They would go to, again metaphorically, the guillotine in the company of the senior politicians and regulators who encouraged the lunacy that conjured up this mess.
One of the things Mr Lenihan can do immediately is to begin to establish an effective system of regulation. Ireland’s reputation as a secure place to bank and do business is invaluable but tarnished. We must vigorously protect what is left of that reputation.
Out regulatory system has failed. The power the bankers retain during this crisis is all the evidence we need to see that it has failed utterly.
It must be immediately replaced with a body with the teeth, the energy, the zeal and the vocation, the commitment and the power to ensure that, when the next crisis is at hand, our elected leaders, for all their flaws, hold a hand of cards at least as strong as those held by a cabal of self-serving, discredited businessmen.
Our last taoiseach, one of the indictable architects of this disaster, has often said that his greatest achievement was his part in establishing a “normalised” society in the north. At this stage his successor can be under no illusions but that the threat to our society represented by unfettered and poorly regulated banking is as great as that once posed by republican and loyalist terrorists.
Though not as violent it is every bit as destructive and corrupting. The depth of moral and political courage needed to replace terror with effective politics in the north is now needed to make capitalism once again work for the good of all society.
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