Ciao Tash Appreciators,
I’ve been watching The Sopranos this week. As I’m sure you know, it’s about the mafia.
The classic business of the mafia is the protection racket. They tell their victims that if they agree to pay cash, the mafia will stop any “criminals” from hurting them. They effectively sell a solution to a problem that they themselves create.
This week saw the resignation of Bob Diamond after it emerged that his bank was involved in manipulating the Libor (the interest rate at which banks in London lend money to each other) in 2008.
I won’t bore you with stuff you already know, but the high Libor partly kicked off the credit crunch and caused the markets to stagnate. Since then, difficulties in obtaining credit have led to a constant cycle of dumping unintelligible amounts of money into the banking sector to ensure that the unimaginable cannot happen and the banks don’t go under. After all, who would protect our money if the banks went bust? (like we have money these days!)
You could say that this cycle of effectively paying for “protection” from a banking collapse sounds a bit like the classic mafia protection racket. But this can’t be right, can it?
Mafioso all come from the same background and are connected to each other. Just because these chaps in the City all went to the same universities and schools and know each other through the old boys network doesn’t mean they’re part of a criminal enterprise, right?
Even if the banking industry is demanding that we pay them extraordinary amounts of money to ensure that we’re “protected”, it’s not like we’ve given them the money and still ended up in crisis after crisis with nothing happening other than the money disappearing.
The mafia use their influence with politicians etc to ensure they remain free from prosecution. Just because David Cameron said this week that he sees no need for a judicial enquiry – let alone a criminal investigation – into what was clearly fraud doesn’t mean he’s in the pocket of the banking industry.
….hold on, maybe it does.
David Cameron tells us that an enquiry by MPs will suffice. I’m sorry, but having read up on banking fraud, particularly international fraud this week and the difficulties in obtaining convictions, I have no faith in MPs having the competence to pull it off. And even if they did find wrongdoing, what would the repercussions be? You need experts to investigate this stuff. Experts who can jail folk – the serious fraud office would be a start.
Interest rates are one of the keys to this entire economic mess. First it was banks that couldn’t afford to meet their interest payments and now it’s whole countries. Is someone fixing Italy’s rates too?
This is organised crime on a scale neither Tony Soprano nor Don Corleone could imagine. The banking sector has been hiding behind a (very) thin veil of respectability for too long. It’s time we saw them for what they are – a racket!
With all this ranting about the mafia, this week’s Tash could be only one man, Vito Corleone: