Ben Chu
The Independent

January 11, 2011

As The Independent revealed last month, senior bankers met Treasury ministers nine times in the weeks after the publication of Sir John Vickers’ report on structural reform of the sector last September. David Cameron’s personal business adviser, Tim Luke, is an alumnus of Lehman Brothers and Barclays Capital.

When the banks want the ear of a minister, they don’t need to hire anyone – they only need to pick up the phone. And yet six different firms were hired by RBS in 2010. It all looks like another case of a taxpayer-owned bank wasting public money.

But there’s a logic to the banking sector’s obsessive cultivation of its political connections. The banking lobby is part of a machine that has traditionally functioned by turning large profits into political influence which, in turn, is transformed into legislation and regulations that help to keep profits high.

Last month, one of Britain’s top regulators, the chairman of the Financial Services Authority, Lord Turner, described in an interview with Prospect magazine how US financial lobbyists deliberately exerted their influence over members of Congress to starve American regulators of the funds they need to perform their oversight of the system.

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