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Carne Ross

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A Manifesto For Better Banking

Posted: 09/27/11 04:17 PM ET

Here are some suggestions for a manifesto for the Occupy Wall Street protests, which are currently taking place. The manifesto attempts to summarize common concerns about current banking practices and articulate a new agenda for a better system. The banks are busy lobbying lawmakers and the Administration every day. The public must be given equal access to demand a better system.

A Manifesto for Better Banking

The current banking system is both a cause and an intrinsic part of our current economic and political crisis. The system encourages excessive risk and profit taking, and discourages long term sustainable investment and lending practices, and marginalizes the poorest and most needy from the banking system altogether. Worst of all, the risk -- and thus profit -- are effectively insured by the taxpayer. The public is in effect subsidizing Wall Street profits.

We do not hate bankers, but we hate the system. It is time to change it. We have five key demands and proposals. These are not only for the government to adopt; everyone, across the country, who wants to change the system can help too. We demand a better banking system -- one where risk is not passed to the taxpayer, but which supports sustainable enterprise, and embodies values other than pure profit-making.

1. The Past. We demand an independent inquiry into the credit crisis, and, if necessary, prosecutions of those guilty of deception or fraud. The inquiry must name names, identify lessons and hold those responsible properly to account.

2. The Future. We demand effective banking legislation to curb excessive and risky lending, but to sustain credit for businesses, particularly small businesses, in lean times.

3. In particular, these reforms must include the following: requirements for greater high-quality capital reserves: the separation of retail from investment banking: legislation to encourage and support local, cooperative banking, and micro-credit for those routinely denied loans and banking services.

4. The Politics. One problem of the current and unjust system is that the big banks enjoy unequaled access to the political system. This tilts the political system to provide for their needs over others. We demand equal access: in particular the Administration must provide a full list of every meeting with representatives of Wall Street banks with the White House, Fed and other government officials. We demand equal access to put the public's requirements on the table.

5. We encourage everyone to demand but also adopt "better banking". We should withdraw our money from those banks that are aggressively lobbying for their own interests over the public's (JP Morgan Chase is a particular example). We should instead deposit our money in cooperative and community banks, and credit unions. We shall also work, with bankers and other supporters, to establish a new national cooperative bank, owned by and run for its depositors and borrowers, not its share-holders.

I discussed some of the problems, and in particular the inadequacy of current and planned global rules, in this article. The problems of banking, and how to resolve them, are discussed at greater length in my book (now published in the U.K., published in April '12 in the U.S. by Blue Rider Press, an imprint of Penguin books).

Carne Ross is a former British diplomat who now runs the non-profit advisory group, Independent Diplomat. He is a regular commentator on international affairs. His book, "The Leaderless Revolution: How Ordinary People Will Take Power and Change Politics in the 21st Century," will be published by Blue Rider Press (an imprint of Penguin books) in March 2012.

 

Follow Carne Ross on Twitter: www.twitter.com/carneross

Here are some suggestions for a manifesto for the Occupy Wall Street protests, which are currently taking place. The manifesto attempts to summarize common concerns about current banking practices an...
Here are some suggestions for a manifesto for the Occupy Wall Street protests, which are currently taking place. The manifesto attempts to summarize common concerns about current banking practices an...
 
 
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HUFFPOST SUPER USER
Oceras
Tax High Incomes!
10:02 PM on 09/28/2011
Fabulous post!
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HUFFPOST SUPER USER
Oceras
Tax High Incomes!
09:49 PM on 09/28/2011
"The public must be given equal access to demand a better system."
It's almost impossible, to define "the public". I rather not have Republicans, who are part of the public, to have the same access as Democrats, who are also part of the public. Of course the Republicans can't be denied access any more than can the .... uh ... well... I do remember the K-Street policy of the Republican congress under Bush denying Democratic lobbyists equal access. The problem of dividing up the public so that all points of view have equal access is overwhelming.

The only really "fair" way would be to deny lobbying altogether. That would eliminate green lobbies as well as coal lobbies. Maybe that's the price that has to be paid to ensure that no one has an advantage in access owing to their advantage owing to their advantage in money.

It's a Gordian's Knot and "the public" doesn't have a sword. Perhaps what ought to be done is for all lobbying be done by mail or email. That way everyone can have their say. Silly.

The only way around this problem that I see is to force all campaigns to be publicly financed and only publicly financed. That way, at least, we can be better assured of having elected people in Washington to who are not beholden to any interest group, public or commercial, when making decisions about laws. And make Washington gift-free. Not even a toothpick.
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cats530
16 Trillion To Banksters Per GAO Audit
04:11 PM on 09/28/2011
"$2.3 Billion in losses hidden from UBS sights by a rogue trader is chicken feed. But ponder how many $100s of billions of dollars in mortgage losses are hidden from view? The real rogues are America’s largest banks, and their enablers in Congress. When the TBTF banks (via their purchased Congressman) forced the Financial Accounting Standards Board to pass a rule allowing them to hide their mortgage losses — FASB 157 — it showed the dishonest nature of these entities. It was revealing of the lack of integrity of all of the institutions involved — from Congress to the banks to FASB."

http://www.ritholtz.com/blog/2011/09/take-the-loss/
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03:39 PM on 09/28/2011
We also should demand that the Glass-Steagall act be reimposed, and that many of the measures in the bill that repealed it be repealed.

"Banking," "Insurance," and "Finance" are mutually-joined but mutually-opposing business interests. When they are held at arm's length and forced to oppose one another, they form a tripod ... the strongest possible structure. But when allowed to bind together, they are a pole that cannot stand.

We must demand criminal prosecution of the long-standing patterns of securities fraud that have infested our financial system _and_ that have been wantonly embraced by it. We must demand formal criminal investigation into the activities of the Securities and Exchange Commission and all other agencies which, although tasked with the regulation of financial industries, in my view aided and abetted the crimes that did take place.

"High Crime is Real Crime," and every one of us are Plaintiffs. We're not asking these industries to "please stop doing what they're doing." We must call it what it is: organized crime.

(Do I use those last two words lightly? No, I do not.)
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HUFFPOST SUPER USER
Oceras
Tax High Incomes!
09:51 PM on 09/28/2011
I couldn't agree more.
The banks have no business selling securities.
12:32 PM on 09/28/2011
here's a clue for banks: next time govt leans on you to make unsustainable loans, cry foul instead of developing so called "safe" investment instruments to hide those loans in.
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10:14 AM on 09/28/2011
Here are a few of the many great solutions out there right now:

Banking got really bad with the repeal of the Glass Steagall Act - when Clinton repealed this he sold us all out (mostly for Citigroup). Put this bill back in place. Read it here:
http://www.archive.org/details/FullTextTheGlass-steagallActA.k.a.TheBankingActOf1933

Patriot Dollars - Takes money out of elections. Everyone gets 50 Patriot Dollars to spend on the election however they see fit. Corporatio­ns must legally be kept anonymous if they donate but that should be eliminated because obviously if I say "Look for 500K donation next week, that's me, pass my deregulation Act. bitches!" anonymity doesn't work with corporations. http://www­.law.yale.­edu/news/4­620.htm”

Fix Housing which is 3.8 Trillion in the hole right now. Here is a good NYU Law written plan, ready to go.
http://www­.stern.nyu­.edu/guara­nteed-to-f­ail-book/o­ther-voice­s-mortgage­-reform/in­dex.htm

A Responsibl­e Market for Housing Finance – This report outlines in detail methods that would modernize our housing market.
http://www­.americanp­rogress.or­g/issues/2­011/01/pdf­/responsib­lemarketfo­rhousingfi­nance.pdf”
exmate
Life is about playing a poor hand well.
09:55 AM on 09/28/2011
It is the ENTITLEMENT of financial institutions to use some of their ill-gotten gains to bribe government officials to allow them to garner even more ill-gotten gains.
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HUFFPOST SUPER USER
Oceras
Tax High Incomes!
09:54 PM on 09/28/2011
That's not an entitlement. It's pure hubris and callousness.
exmate
Life is about playing a poor hand well.
06:22 AM on 09/29/2011
They are entitled to express pure hubris and calousness in any case. Bribery is specifically cited by the US Constitution as an example of a high crime and yet it is an integral part of the way our government functions.
exmate
Life is about playing a poor hand well.
09:51 AM on 09/28/2011
Financial and capital markets can only work when there is an appropriate relationship between risk and reward.
exmate
Life is about playing a poor hand well.
09:49 AM on 09/28/2011
Maybe some banks are too big to fail but bankers whose actions have brought us to the point at which those banks should normally fail in a truly capitalistic system should go to prison and do some hard time.
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HUFFPOST SUPER USER
Oceras
Tax High Incomes!
09:55 PM on 09/28/2011
If a bank is too big to fail, it must be broken up.
09:48 AM on 09/28/2011
In ancient times, people would store their gold in places with vaults. These places became known as banks. The bankers realized that very, very few people ever came back to redeem their gold, they just traded the more convenient paper or parchment notes. So bankers figured out they could create notes that had no backing, out of thin air, and loan these out at interest. This had the effect of multiplying their profits enormously, since the new notes were not gauranteed. This is called fractional reserve banking. Only a fraction of the paper money is backed by anything, and bankers keep creating money and bonds out of thin air and loaning it to governments and people. THAT IS THE PROBELM.
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08:45 AM on 09/28/2011
The Wall St. occupation is just symbolism.

Wanna get their attention? Don't buy any Christmas gifts - give the money to the poor instead.
03:11 AM on 09/28/2011
Secret lobbying is the major corrupting force that is ending democracy in America. Vote to end bribery and demand all lobbying be open to public scrutiny at: http://signon.org/sign/out-lobbyists
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cats530
16 Trillion To Banksters Per GAO Audit
03:58 PM on 09/28/2011
I signed.
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CanuckistanCommie
I ain't no Commie but Pat Buchanan thinks so!
01:37 AM on 09/28/2011
Canada:
Strict banking regulations.
Strict mortgage regulations.
Results:
Zero bank failures
Zero bank failouts
Zero dollars dumped onto the Canadian populace.
HUFFPOST SUPER USER
mike Forrest
12:11 AM on 09/28/2011
Why are Libs listening to a BRITISH LEFTWING extremist?
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08:39 AM on 09/28/2011
Because conservatives don't have the answers.
exmate
Life is about playing a poor hand well.
09:53 AM on 09/28/2011
Conservatives had a lot of answers like deregulation and "the government is not the solution to our problems. It is the problem".
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HUFFPOST SUPER USER
Oceras
Tax High Incomes!
09:58 PM on 09/28/2011
Carne Ross is not extremist. The fact that he's British or left wing has nothing to do with the correctness or incorrectness of his points of view.
The fact that you dismiss him out of hand because of his associations shows how weak your argument is.
11:09 PM on 09/27/2011
And the republicans OPPOSE every effort to regulate the banks and wall street - I guess the republicans are the ones who are doing most of the illegal and questionable business transactions.
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10:17 AM on 09/28/2011
Both dems and repubs are sell outs mossy. Obama's a big fan of wall street. Look at his actions.

Occupy Wall Street.

Americans fail to accept that fact that voting once in a while aint doing squat!

No action. No change.