Project Merlin is no
solution to the banking problem. In fact, by failing to recognise the real
problem here, it may make matters worse.
The real problem is this. It isn’t that banks are somehow unwilling to lend money to small businesses; it is that they are no longer set up to do so. They have no local managers empowered to take decisions. They have risk software that rules out most deals. They have such onerous conditions and charges that many SMEs shun them altogether.
Most days it seems to me that the new economics is accelerating. Not yet fast enough to catch up with the looming disaster being wrought on people and planet by the old economics, but the growth in intellectual firepower on both sides of the Atlantic, the rising scale of the undertaking, is increasingly exciting.
The task is to show, in practice, that it works. Then, when you invent a better mousetrap – as they say – the world will beat a path to your door.More
Capital One's advert for its World Mastercard is quite emphatic: "No, no, no, no, no, no, no, no, no, no, no, no, there's no limit." That kind of certainty normally comes wrapped in fundamentalist religion. It could be the magical thinking of an economic system drifted dangerously far from its real world roots, or just the "bring it on" machismo of banks desperate to forget the consequences of reckless lending.More
We are used to thinking of tax havens as states that are wholly distinct from ourselves. However, a new book by Nicholas Shaxson argues that tax havens are in fact “controlled by the world’s major powers, notably Britain and the United States”.
For example, Britain has a large array of tax havens affiliated with it in the form of “Crown Dependencies”, which include Guernsey and Jersey, and “Overseas Territories”, such as the Cayman Islands.More
The International Monetary Fund’s monitors are back in Athens this week, overseeing the beleagured Greek economy’s efforts to pay off its debt. Government officials across Europe will be watching nervously as the Papandreou government’s efforts to ram through austerity measures are put under Washington’s beady eye.More
A freelance reporter has published a leaked document that reveals that George Osborne opposed EU plans to place strict limits on bankers’ bonuses. The European Parliament is limiting the proportion of large bonuses that can be paid out in upfront cash to 20%, in the hope that this will discourage the risk-taking and short-termism that blights the financial services industry. However, the UK Treasury lobbied for this cap to be relaxed to 40%.More
There are more than just bankers and businesspeople here. There are NGO, university, trade union and spiritual leaders too, and there is a joke that’s going round them about the Irish bankers.
There used to be worries, apparently, that all Ireland’s banking elite used to fly to Davos in the same plane together. The joke is: why did God miss such a heaven-sent opportunity?More