I had an interesting (but competely April Fooled fictional) conversation with the Chief Executive of one of the UK’s largest banks last night.
He was telling me about a new bank alliance that has been formed to address their concerns over what the G20 might do about bank bonuses, taxation, lending, governance and general operations.
The banks have recognised that these issues have been getting increasing media coverage, and therefore public anger, and are specifically responding to the G20 Meeting in Nanjing, China that took place yesterday.
At this meeting, apparently, some countries have agreed to start a co-ordinated program to introduce draconian regulations to deal with the issues of banks behaving badly.
Led by President Sarkozy of France, who has the Chair of the G20 this year, the regulatory agenda is based upon taking the mixture of ideas and issues that have been floating around in recent times – the Tobin Tax, bonus taxes, Basel III, capital ratios, stress tests, the sovereign debt crisis – and deal with them head-on by telling the banks what they can and cannot do.
This dictate will be announced at the next G20 meeting, to be held in Cannes in November.
Before this gets off the ground, an alliance of major banks has been formed to head this off.
Nominally called the Financial Union (FU), to emulate the European Union (EU), it comprises leading banks of the world, although there is a notable absence of any of the major American banks.
The FU alliance will be co-ordinated by those that have most at stake – the Chief Executives of the major banks and their investment banking leadership – and is directed at specifically destabilising the economies of those countries that join Sarkozy’s call to arms.
Thus far, only Portugal, Italy, Greece and Spain have been on the Sarkozy bandwagon, and we saw what happened to them.
Apparently, Japan did show a little interest, but that’s gone away due to the natural disaster that occurred recently. In light of the FU alliance, some conspiracy theorists are asking if that was a ‘natural’ disaster or not now of course.
Over dinner last night, and strictly off the record, the UK bank CEO told me the following:
“Look Chris, we all know about conspiracy theorists, and there are many more of those than ever now talking about the banks. But this is all just media created, as illustrated by that pap of fiction Inside Job which won a frigging Oscar for a complete load of dross. Things like that are just stirring things up, and it all adds to the media backlash against us.
“To be honest, we’re fed up with it. Non-stop yabber, yabber, yabber, from diddlysquat journo’s in corduroy jackets – many of whom have a bad case of dandruff and halitosis (ed: bad breath), I can tell you – and it’s all just crap.
“It makes our jobs far more difficult and the world would be a better place without the media, I can tell you.
“Now, as for this crisis of confidence in banking, much of this was made up by our competitors. Just look at our capital position. It is sound, always has been and always will be. What was really going on is that the damned Yankees decided to pull the rug because they could see global domination moving West to us and East to the Chinese.
“So what better way to get everyone to take their eye of the global war for trade than pretending that their markets had imploded due to some rubbish subprime sales?
“Absolutely nothing to do with us old boy, I can tell you, and that’s why we’re now forming the FU Alliance.
“The FU Alliance includes all of my mates. Sorry, I meant the leaders of the key world’s banks, although not the Americans of course. Never should have let the colonies go, damn George III. Anyways, my peers and I are going to make sure that the world is a better place by paying ourselves a pretty penny at the end of the year, and we have a right to do this every year.
“Yes, bonuses. Now I know that weak and ineffective whingers like yourself don’t like it, but you and your cohorts of media mates can just get lost. FU will see to that.
“We’re also going to establish our main offices in the Caymans, the Bahamas and Liechtenstein. That way, whatever the G20 and that little Napoleonic git does, we can avoid the issue.
“Oh and forget all that sabre-rattling about lending, capital ratios and stuff. We’ve got jolly good accountants and auditors who deal with all that stuff, and they know how to make our balance sheets look like we’re doing well, so FU to that too.
“Yes, the FU Alliance is going to show these guys a thing or two. You just wait. In fact, right now, we’ve got a nice little plan to derail the Americans by ploughing our money into remnimbi as the new reserve currency.
“So you just wait. By the time the next G20 meeting comes around, most of these jumped up political boys and girls will be towing our line.
“After all politics comes from the Latin derivations of poli-, meaning many, and –tics, meaning blood sucking parasites.
“Now, would you really rather have a bunch of tax-wielding politico blood sucking parasites stealing your money … or an army of rich, eloquent, suited and booted boys who will make you a load of money?
“Exactly. That’s why you need the banks more than governments, and that’s why we’ll win and everyone else will lose.”
At this point, he did break away to finish another large Macallan Malt Whiskey on ice. I think this was the sixteenth, but am not sure as memory is a bit hazy.
I did ask whether I could share a glass with him, but just got another mention of “FU”.
Ah well, happy daze.