Why UK Election is a Win-Win for Banksters
Former Financial Regulator Bill Black discusses how both Labour and Conservative parties have contributed to UK’s regulatory race to the bottom
JESSICA DESVARIEUX, PRODUCER, TRNN: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore. And welcome to this edition of the Bill Black Financial and Fraud Report. Now joining us from Quito, Ecuador is Bill Black. Bill is an associate professor of economics and law at the University of Missouri, Kansas City. He’s a white-collar criminologist and a former financial regulator, and the author of The Best Way to Rob a Bank is to Own One. And of course, he’s a regular contributor to The Real News.
Thanks for joining us, Bill.
BILL BLACK, ASSOC. PROFESSOR OF ECONOMICS AND LAW, UMKC: Thank you.
DESVARIEUX: So Bill, what are you tracking this week?
BLACK: Well, given the coming elections this week in the United Kingdom I thought I’d report on what these elections mean for holding the bankers accountable that caused so much devastation in what’s called the city of London, or for short, the city.
DESVARIEUX: Okay. And how do they actually proceed? Have they prosecuted bankers?
BLACK: No. Of course not. The city won, which should be in quotation marks, the international race to the bottom in financial regulation. And then after it had won, Tony Blair–when he was of course supposedly the sort of socialist, Labour party guy who was prime minister–blasted the Financial Services Agency, their premier non-regulator, that had adopted light touch regulation. They actually called it that. Which meant that the bankers were able to get away with crimes with complete impunity. Blair blasted them publicly for being much, much, much too tough a regulator. It was one of the weakest regulators in the history of the world, and all these frauds were developing on his watch. And the reaction of labor was, we have to completely destroy regulation.
All right, so then Blair did this handoff to Gordon Brown who had been their Geithner. And–and their Geithner in every way, helping to destroy regulation. And Gordon Brown persisted in these policies, and this produced a disaster, but a disaster that happened in large part on the Conservatives’ watch. But the Conservatives are even less inclined to prosecute anyone, so they’re–the record, what they did as soon as they came into office was try to gut the Serious Fraud Office.
Now, the Serious Fraud Office was already a pale imitation of its former self, and it was never terribly strong, at the time they did this. But they decided they should really ruin it. And a review of the Serious Fraud Office said that they had produced the virtual decriminalization of serious frauds in the United Kingdom, particularly, of course, in the banking industry.
Meanwhile, the Conservatives to take power had to go into coalition with the Lib Dems, which, that name itself gives you some of the problems. They’re supposed to be a little bit of this, a little bit of that. And Nick Clegg, as almost everybody views as a disaster, so the Lib Dems are expected to lose maybe 40 percent of their seats in the parliament in a few days. But tactically, the latest guess is that Clegg will survive because so many Tories–Conservatives–will vote for him, to try to keep him alive to be a coalition partner, which is probably the only way that the Conservatives have of getting any power.
Meanwhile in Scotland, one of my ancestral homes, the Scottish National Party really got a push out of the unsuccessful referendum in favor of Scottish independence. But it really developed a really strong following, and is the only progressive force of–at least, consistently progressive force–now in the United Kingdom. And so now the bogeyman that the Conservatives and Labour are sharing is, won’t it be terrible if the Scottish people elect representatives who actually represent them, and won’t this be terrible for the United Kingdom. So one of the only push for potential prosecutions pretty much comes out of the Scottish National Party, which could end up in coalition with Labour.
But right now, the situation is that in the Conservative or Tory party, the guy waiting in the wings is this really weird American Brit who’s in the process of giving up his U.S. citizenship. Boris. And Boris is the guy who runs the city of London, but is also running for parliament. And he is the complete whore for the financial industry. And so if the Conservatives suffer an embarrassing loss under Osborne’s leadership, the guy waiting in the wings is going to try to undo even the tiny regulatory steps that have been taken in the United Kingdom, and go back to the worst of the days of where the bankers just absolutely ruled.
So the scorecard is pretty much nobody’s been prosecuted, certainly no one senior has been prosecuted for the most destructive frauds in United Kingdom history. Doesn’t look like that that’s about to change. And under some scenarios, the United Kingdom will go back full force into this regulatory race to the bottom that has already made the city of London the financial cesspool of the world.
DESVARIEUX: All right. Bill Black, joining us from Quito, Ecuador. Thanks so much for being with us.
BLACK: To talk about UK politics. International, baby.
DESVARIEUX: Yes, we love hearing from you, Bill. Thanks again.
BLACK: Thank you.
DESVARIEUX: And thank you for joining us on The Real News Network.
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