Tuesday, January 26, 2010

Making Banks Pay

Making banks pay for their stupidity and for endangering the livelihoods of millions of people around the world, all the while making huge profits during the good times (and paying themselves exorbitant sums despite messing things up) seems like a good idea. But we all know how powerful banking lobbies can be and how effective the financial sector is at propagating the view that there is no alternative (TINA).

Obama is certainly heading in the right direction and let's hope that the loss of Kennedy's old senate seat does not lead him to shift to the right. While some people decry his supposed populism I think the US is due for some serious bank bashing.

Once again it appears that the Swedes are leading the way. See the NYT's "Swedish Bank Fee Sets Example for America". The idea is to get banks to pay a "'stability fee', or direct tax on banks so that they pay for their own bailouts".

Basically the idea is that a fee "would remain in place for at least 10 years and would be applied to all financial institutions with more than $50 billion in consolidated assets — at 0.15 percent of covered liabilities."

Expect some opposition to this.

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