Posted 11 months ago on Jan. 7, 2013, 11:35 p.m. EST by arturo
from Shanghai, Shanghai
This content is user submitted and not an official statement
Sometimes, in war, combatants from one side will abandon their position, and switch over to the other side. This may be just such a time, as an increasing number of insiders from high finance call for Glass Steagall:
City of London Insider Lord Flight Calls for a "Full Glass-Steagall" Separation of Banks
Lord Howard Flight, a conservative member of the British House of Lords, has written an article making the case for a full Glass-Steagall reform of the British banking system. Lord Flight's commentary maintains the renewed drumbeat from the United Kingdom on behalf of a policy of economic sanity. At the end of 2012, a leading British poll reported that some 60% of the House of Commons favor Glass-Steagall, by name.
Lord Flight, a City of London insider who got his start with the Rothschilds in 1970 and was Shadow Chief Secretary to the Treasury from 2001 to 2004, is now chairman of Flight & Partners Recovery Fund. In a Jan. 6 article headlined "We need to contemplate much more radical reform of the City," published on ConservativeHome.blog.com, Lord Flight argued that it is "wholly mistaken to attack the City, collectively, amounting to shooting ourselves in the feet. It is, however, undeniable that much of the banking sector has been a disaster since 2007/08, with the banking crisis, followed by PPI [payment protection insurance] mis-selling, the Libor-rigging scandal, and in turn the money laundering offences."
It is necessary to "restore a culture of integrity to the banking sector," Lord Flight continued, and "to achieve more manageable banking units and a much more competitive banking industry. Next year the Banking Reform Bill will be passing through its Parliamentary stages. The case has strengthened for a full Glass-Steagall separation of investment (and trading) activities from straightforward commercial and retail banking... It would not solve all the problems; I doubt a Goldman Sachs could be allowed to fail without causing substantial damage to, if not bringing down, the commercial banking sector... [But] I cannot help feeling that with London's banking business thus damaged, there are arguments for taking the risks of more radical reform than the Vickers proposals."
A blog response to Lord Flight's article, posted by British Member of the European Parliament Charles Tannock, concurs: "We should all look at the U.S. post 1929 and the responses to it including the well-serving Glass-Steagall Act. Banks are in a uniquely privileged economic position in all societies and global trade and free capital movements has amplified this so they cannot have it both ways with privatising profits in good times and nationalising losses in bad times on the 'too big to fail' basis."