Bearing in mind that I know little of the wider aspects of the economic debate, I was reading a comment by George Soros in the Times yesterday in relation to the Occupy Wall Street protests and European situation, but it was the succinct comment about banks that hit home for me:
George Soros said…
“Actually, I can understand [the protesters’] sentiment, frankly,” he said.
“And at the same time the decision not to inject capital into the banks, but to effectively relieve them of their bad assets and then allow them to earn their way out of a hole leaves the banks bumper profits and then allows them to pay bumper bonuses…
Soros recently warned that a global economic depression may be in the cards, citing that Europe is on the brink of collapse, unless immediate action is undertaken.
According to Forbes, Soros wrote: “Three bold steps are needed. First, the governments of the Eurozone must agree in principle on a new treaty creating a common treasury for the Eurozone. In the meantime, the major banks must be put under the direction of the European Central Bank in exchange for a temporary guarantee and permanent recapitalization. Third, the ECB would enable countries such as Italy and Spain temporarily to refinance their debt at a very low cost.”
Anyway it sounds like he has the right idea about Europe to me, but it was that comment about the relieving of bad assets, not having to earn their way out, and presenting the bankers more bumper profits and bonuses as an erroneous and disgusting result, that just made my stomach turn really. Don’t we all wish we could have been relieved of our bad assets or troubles at one time or another, and left to go back on our merry way not only without consequence but at a huge profit and advantage.
Even I can figure out that it is we – the taxpayer – who is paying for all of that. Unbelievable really, but nice to see it put clearly in just two lines.