Posts Tagged ‘bank’
Occupy the EU, and merry christmas
Let’s look at a few, very few, trifling almost, pieces of evidence. As austerity cuts swept Europe, the numbers of the wealthy in Europe with more than US$1 million (€772,000) in cash rose from 2.6 million in 2008 to 3.2 million people in 2011. Together they were worth US$10.1 trillion (€7.8 trillion) in 2011.
Don’t look away yet. The five biggest banks in Europe made profits of €34 billion in 2011. Executive pay for the CEOs of the 100 largest companies on the London stock exchange rose by 49% in 2010, compared with 2.7% for the average employee.
Yes, I’m coming to the Occupy anthem, but first: there are between 15,000 and 30,000 estimated lobbyists in Brussels – more than in Washington. Some operate as “professional consultants” and under other titles and relatively few have registered with the EC voluntary lobbyist register. 68% of European lobby groups represent business interests. Trade unions make up 1-2%.
This is courtesy the very excellent and incendiary update to the EU Crisis Pocket Guide, first brought out by the Transnational Institute. [The update is in English, and the pocket guide is also available in Italian and in Spanish.)
TNI’s EU Crisis Pocket Guide tells us: how a private debt crisis was turned into a public debt crisis and an excuse for austerity; the way the rich and bankers benefited while the vast majority lost out; the devastating social consequences of austerity; the European Union’s response to the crisis: more austerity, more privatisation, less democracy; and contains ten alternatives put forward by civil society groups to put people and the environment before corporate greed.
Indeed, as Triple Crisis has warned, the GDP figures published in the Eurostat press release on the 15th of November 2012 for the Economic and Monetary Union (euro area) marked the confirmation of a double-dipped recession (with negative growth in quarters 2 and 3 of 2012). Gross domestic product was 0.6 per cent lower in the third quarter of 2012 compared with 12 months earlier. The return of recession is symbolic of the failure of the austerity programmes, which have been striking down economic activity throughout the EU and EMU. It should give rise to some thoughts as to why the austerity programmes are not working to bring down budget deficits without damaging economic activity.
But back to TNI and the Pocket Guide, which has said that in spite of the crippling costs of bailing out the banks, the EU still has not agreed, let alone put into operation, any major bank reforms. Four years on, only a few new rules to reduce some particularly risky practices by banks and financial markets, exposed by the financial crisis, have become operational.
What’s the remedy? There are a goodly number and here are but a few, as offered by the TNI’s very competent heads: (1) Bring the financial sector back under public control and do this by banning speculative financial instruments like Credit Default Swaps and food speculation, reintroduce rules that separate retail/utility banking from investment banking, impose size limits on banks so none can become “too big to fail”, stop new financial products unless proved safe and socially useful, ban hedge funds and other risky speculators who only make money from money, re-introduce controls on capital flows. (2) Tax the rich, the speculators and the polluters, impose tax on international financial transactions, increase taxes on the rich to at least the same as pre-1980 levels, end subsidies for fossil fuel industries, close down tax havens, establish a maximum pay ceiling and ban bonuses, introduce a Basic Income available to all.
For more background, there is the book, ‘Crisis in the Eurozone’ (Verso), and this has described the credit crunch, which led (coaxed or demanded) that governments around the world step in to bail out the banks. “The sequel to that debacle is the sovereign debt crisis, which has hit the eurozone hard. The hour has come to pay the piper, and ordinary citizens across Europe are growing to realize that socialism for the wealthy means punching a few new holes in their already-tightened belts.”
In this book, a leading member of the Research on Money and Finance group, Costas Lapavitsas argues that European austerity is counterproductive. The book shows that cutbacks in public spending will mean a longer, deeper recession, worsen the burden of debt, further imperil banks, and may soon spell the end of monetary union itself.
Occupy Everywhere
The Occupy Wall St movement is spreading quickly across the USA. Mother Jones magazine has put together an interactive map on where the protests are spreading to, and at last count there were over 60 locations!

An Occupy Wall Street protester yells at police officers as they make arrests in New York, Wednesday, Oct. 5, 2011. Protesters in suits and T-shirts with union slogans left work early to march with activists who have been camped out in Zuccotti Park for days. Photo: Seth Wenig
The ‘Occupy’ demonstrations are the blowback – long overdue – of the foreign-plus-financial policy of a great power which has for long dampened criticsm and fair a representative politics at home.
The ‘Occupy’ demonstrations express a broader public understanding that the basic source of the crisis facing millions of people lies in the social interests of the sprawling and powerful global financial system – of which Wall St is one symbol; a powerful symbol but nevertheless one amongst many similar symbols.
Dogged by debt and haunted by ever newer forms of deprivation, the American protesters have ‘taken’ Wall St to call and end to the reign of the giant banks that dominate the US and world economy. Their politics is determined not by the popular will, but by the interests of a cunning financial aristocracy ruthlessly absorbed with defending its wealth by impoverishing the majority of their fellow citizens.
The answer – Occupy Everywhere!
Mother Jones has provided a very useful timeline of the Occupy Wall Street movement:
- July 13: The Canadian magazine Adbusters makes a call to Occupy Wall Street.
- August 30: The hacktivist collective known as Anonymous releases a video answering the call and encouraging others to follow suit.
- September 17: Nearly 1,000 gather to protest corporate greed and begin occupying the financial district in New York City.
- September 19: Roseanne Barr is the first celebrity to lend support to the so-called NYC General Assembly.
- September 20: The NYPD starts arresting protestors for wearing masks, citing an arcane law that prohibits masked gatherings of two or more people with an exception: “a masquerade party or like entertainment.” The police soon become more forceful.
- September 22: Demonstrators interrupt a Sotheby’s Auction, “in a show of solidarity with the art handler’s union that had been locked out.” This is the first instance of labor unions and the movement locking step.
- September 24: 80 protestors are arrested during a peaceful march; a video of a police officer pepper-spraying a nonthreatening woman goes viral.
- September 26: Anonymous allegedly leaks the name and details of the police officer who wielded the pepper spray.
- September 27: The Occupy Wall Street campaign comes out in support of postal workers who are protesting their reduced five-day work week.
- September 28: Transport Workers Union votes to support Occupy Wall Street; over 700 Continental and United Airline pilots demonstrate in front of Wall Street.
- September 30: More than 1,000 demonstrators march on NYPD headquarters, protesting the police response against the demonstrators.
- October 1: Over 700 demonstrators are arrested for marching across the Brooklyn Bridge and blocking traffic.
- October 5: Major labor unions endorse the movement and join in a march on New York’s financial district. According to ABC News, as many as 15,000 participate in the march.
The New York Observer has 50 portraits of people who have been in on the action in New York City. The Nation‘s Greg Mitchell is blogging “Occupy USA” developments daily. The Guardian is also producing ongoing coverage.
- Live footage of Zuccotti Park can be found at the protest epicenter’s viral webstream, Global Revolution.
- The #occupywallstreet hashtag (as well as #ows and #occupywallst) has been the main engine on Twitter.
- OccupyTogether.org supplies a range of DIY downloadable posters.
- There is an Occupy Wall Street social app called The Vibe, which allows demonstrators to communicate anonymously.
- An Occupy Wall Street publication was launched on Kickstarter, originally asking for $12,000 in seed money to get the publication rolling. The project surpassed its funding goal and has now raised over $40,000.
- A Tumblr account, We Are the 99%, allows users to post personal anecdotes and stories about why they consider themselves part of the economically disaffected majority.
How the World Bank is leveraging the new food crisis
Soon after the FAO’s Committee on Food Security (CFS) meeetings, the World Bank has said that it is “reactivating” its Food Fund (called the Global Food Crisis Response Program) “to run through June 2011”. What does this mean? In short it means that the World Bank is leveraging the food supply and food price rises for staple cereals of 2010 in much the same way it did in 2008, during the earlier food crisis.
“In response to the severity of the food crisis and the need for prompt action, the World Bank Group set up the Global Food Crisis Response Program (GFRP) in May 2008 to provide immediate relief to countries hard hit by food high prices” is how the Bank puts it. There’s a lot of cross-referencing in order to legitimise its actions, such as “The Bank response has been articulated in coordination with the United Nations’ High-Level Task Force (HLTF) on food security. Through its response, the Bank is supporting the implementation of the joint Comprehensive Framework for Action (CFA)”.
According to the Bank, the GFRP has approved US$1,238.2 million in 35 countries as of 09 September 2010. The Bank says that “grant funding has also been made available through several external-funded trust funds in support of the full range of interventions available under the GFRP”. There’s more cross-referncing to make it all sound happily multi-national: a “Multi-Donor Trust Fund (MDTF) has received contributions” of AUD 50 million from the Australian government, €80 million from the government of Spain, 3 billion Korean Won from the Republic of Korea, CAD 30 million from the government of Canada, and $0.15 million from International Finance Corporation (IFC).
The point is, how are governments of small countriess with populations vulnerable to the price volatility of global food market being pressurised by the Bank? Take the case of Honduras, one of the 35 countries. The Bank calls it “Honduras – Food Prices Crisis Supplemental Financing to the First Programmatic Financial Sector Development Policy Credit”. US$10 million in “development assistance” for “budget support”.
From the project document for this assistance, here is the objective: “2. Proposed objective(s). The proposed SDR [XXX] million (US$10 million equivalent) operation would support the Government’s commitment to maintain macroeconomic stability and persevere in its Financial Sector DPC’s (development policy credit) development objectives and allow the government to respond to the food price crisis. As such, the supplement will be processed under GFRP procedures.”
We’re seeing two objectives here: (1) macroeconomic stability and (2) response to food price crisis. Nowhere in the project documentation (there’s only one document publicly available) is there an explanation of why the World Bank thinks the macroeconomic stability of Honduras is threatened by the rise in prices of food staples, and nowhere is there mention of the Honduran government’s own response.
A new objective appears soon after: “Honduras is committed to a reform program aimed at strengthening the financial sector so as to ensure that it contributes to long-term growth and poverty reduction. The authorities have expressed their intention to continue the implementation of the financial sector reform program and more specifically their intention to strengthen supervisory activities, keeping updated the database of related parties, and further strengthening banking resolution including through fully capitalizing the recently created bank capitalization fund.”
This has to do with rising food prices? Any government can make any number of commitments to ‘growth’ and ‘poverty reduction’, but what’s the financial sector reform doing in a Global Food Crisis Response Program? The Bank doesn’t say.
The Honduras project document continues in its two track logic: “This commitment is particularly important because of the new challenges that the food crisis is creating for the financial sector, as higher food prices negatively affect the portfolio of consumer loans and the country’s macroeconomic stability.” If there is a connection between consumer loans being affected by rising food prices (repayments?) how much over how long from how many?) there’s no explanation) and ‘macroeconomic stability’ (which has to do with a variety of other factors), the Bank has not bothered to explain them.
The Bank then says: “In particular, strong supervisory activities and a well capitalized bank capitalization fund are crucial stabilizing factors for the financial system, because they signal to the market that the authorities would be able to respond to banks in difficulties and avoid a systemic crisis.” Here the Bank trots out the typical systemic crisis bogey, implying that without its intervention, in the name of Food Crisis Response, Honduras would be in serious trouble. How easily one crisis of external making get translated into another of deliberate design.