Friday, January 29, 2010

Level Playing Field for the Big banks

A Level Playing Field for the Super Banks?

The world's economic big-wigs are meeting, as they do every so often, in the Swiss ski resort of Davos. The bankers among them expressed concern about plans to subject the banks in the US and elsewhere to stricter regulations in order to prevent another meltdown. The head of the Swiss bank, USB--one of the biggies in global banking--is quoted as saying:“Global banks would like to have a level playing field, . . . .’’

There are two teams competing on this playing field. One of the teams consists of the big banks. The other team? Well surely the businesses that had to close as a result of the massive miscalculations of the large banks are on that team as are their employees who are now without a job and the millions of Americans who lost their homes due to the mortgage crisis set in motion by the big banks.

What would a level playing field for these two teams consist of? If the banks had a level playing field so would all the other players, including the unemployed, the homeless and the clients of food banks--the hungry. The big banks would not have all the advantages as they do today--receiving massive bailouts because they are “too large to fail” while small businesses and their employees and homeowners are small enough to be allowed to fail. Today the playing field is not level; it gives a huge advantage to the big banks.

If the playing field were really level and one side took unfair advantage there'd be a time-out and the team that engaged in unfair practices would have to pay a penalty. Since the misjudgments of the big banks caused millions to lose their jobs and their homes, it would be the responsibility of that team to take their penalty by alleviating the suffering those errors caused. Instead of giving million dollar bonuses to the execs who gambled (with other peoples' money, mind you!) and lost, the banks would be told to use their profits to create jobs and to help people hold on to their homes.
How's that for a level playing field?