Thursday, August 9, 2012

Five years into financial crisis trust in banks hits new low

The Guardian reports that nearly three quarters of the individuals in a UK survey don't think that banks have changed their behavior for the better since the start of the financial crisis.

Regular readers are not surprised by this finding because UK policymakers and financial regulators, like their counterparts in the US and EU, chose to protect banker bonuses, no matter how they were 'earned', over protecting society.

Policymakers and financial regulators did this by adopting the Japanese model for handling a bank solvency led financial crisis and all of its related policies (think regulatory forbearance and 'zombie' loans, zero interest rate policies and quantitative easing, and lack of prosecution for financial crimes).

Given how the policymakers and financial regulators have bent over for the bankers, it would be surprising if the bankers had changed their behavior for the better.

Five years on from what is considered the start of the credit crunch –dubbed "the day the world changed" by the former boss of Northern Rock – the public are more disillusioned with the banking sector than ever, a consumer group has claimed. 
Nearly three-quarters – 71% – of people surveyed by Which? do not think banks have learnt their lesson from the financial crisis, up from 61% in September last year. 
Consumers have low expectations of a parliamentary inquiry into banking ethics, with only 26% confident that it will lead to positive change among the UK's lenders. ...
Which? chief executive, Peter Vicary-Smith, said: "Five years on from the beginning of the financial crisis, public confidence in the banking industry is at an all-time low, with a series of scandals exposing mismanagement and corruption at the very heart of the banking system that have cost UK consumers dear."
And yet the policymakers and financial regulators continue to protect the bankers.

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