Lest we forget – in 2007 Cameron endorsed even less regulation of banks than Labour ……

As the widening banking scandal in Barclays is breaking, it’s worth remembering that in 2007, Cameron endorsed LESS regulation of banks and specifically mortgage and pension provisions by financial institutions.

A report produced by the Conservative Party in 2007 – endorsed by Cameron – called ‘Freeing Britain to Compete‘ recommended that a vast range of regulations on the financial services industry should either be abolished or watered down, including money-laundering restrictions affecting banks and building societies. The report also saw “no need to continue to regulate mortgage provision“, saying it is the lender, not the client, who takes the risk.

Here are a few gems – direct quotes – taken from the report:

The (Labour) government claims that this regulation is all necessary. They seem to believe that without it banks could steal our money ……………

We need to make it more difficult for ministers to regulate, and we need to give the critics of regulation more opportunity to make their case against specific new proposals………

We recommend deregulating venture capital fund raising, and investment for professional investors………

A Conservative government should relax banking regulation, allowing a new breed of venture/micro-credit institutions…………….

Competition is the customers’ main ally. It is competition which keeps the bank honest ……………………

We see no need to continue to regulate the provision of mortgage finance, as it is the lending institutions rather than the client taking the risk………..

Our aim is to liberate the economy from the burden of unnecessary regulations……………

Before imposing traditional ‘heavy’ regulation, government should always consider whether the ends could be achieved by less burdensome means, such as through competition, incentive schemes, or self-regulation…….

The regulatory burden should be measured and reduced year on year…………

Greater use should be made of “codes of practice” rather than direct regulation………..

From its first days in office, a Conservative government should challenge the public and press assumptions that encourage excessive regulation, and explain the likely effects of and reasons for its regulatory reforms………


So please – let’s have no more of all this rubbish about Labour being the only party which didn’t regulate the banks enough during its time in power.

Because if it was up to the Tories – they would have regulated the banks even less.


This article was originally posted in Pride’s Purge.

Is ‘Austerity’ intended to increase unemployment and suppress wages?


By Payguy

Osborne and Cameron are organising a slump to increase unemployment and supress wages – a price they consider worth paying – to increase profit margins for Tory donors and the interests of the super wealthy.

We should certainly take no lessons from the current Government who are badly misleading the public about the economy in a way that is certainly immoral and evil, and verges on treasonous.

Take a look at the following graphs –


The private sector is deleveraging. Households, private sector companies and banks are all reducing economic activity and hoarding cash (£650 billion of it). In this circumstance the state has no choice but to make good the difference. It is not a choice. It is an accounting law.  See the graph showing a perfect relationship between private sector surplus and public sector deficit (including trade deficits).

Until Osborne puts in place policies that make the economy grow, the deficit will continue. His fiscal policies of course will continue to cause depression, higher unemployment and lower living standards.

Public sector debt is private sector income (by definition) … and it matters not a jot.  As MMT proves – higher public sector debt DECREASES gilt interest rates.

The current government’s policies will fail by definition – look at the graphs – public sector debt = private sector surplus + balance of payments ALWAYS.

The sectorial balance graphs are a great way to compare Labour and Conservative records on public sector spending.  Look carefully and prior to 2008, you can clearly see Labour’s record is better. 2008 was a world wide crash which affected every nation in the world.

The Tories were pushing for further deregulation of banks in 2007!!-


The current government is dramatically reducing spending on useful activities such as education, health, transport. These are the deepest cuts since the 1930s and we are only an eighth into the planned program.

But what we can clearly see is exactly what Modern Monetary Theory would predict.  The deficit reduction program is failing, and will fail. It has to by definition (see the graphs again showing public sector deficit equal private sector surplus ALWAYS).

Osborne’s spending cuts  will always be replaced with higher spending on housing benefit, unemployment benefit and lower tax revenue.  All at the cost of lower growth and higher unemployment.

And how’s the Tory plan working out for people in practice? The government has tried to reduce itself in size. The economy has tanked. Living standards have fallen. Government debt has increased as every pound no longer spent on employing a teacher, nurse or mending a road is more than compensated for by the extra costs of unemployment benefit, housing benefit etc. government tax revenues are down despite higher vat and income tax due to the stagnating economy.

We are in a liquidity trap. I can’t say this often enough to austerians. Without QE the money supply has been contracting for three years.


Banks are deleveraging and lending less money into the economy. Households are poorer so are spending less money in the economy. Now the government is trying to spend less money in the economy. Government fiscal tightening in a liquidity trap leads to a depression and a slump.

The only thing saving us from falling into a free fall abyss is QE and automatic stabilisers such as unemployment benefit and housing benefit.

If we did as the Telegraph, and Cameron want, and further reduce the size of the state, companies won’t have any customers for their goods, as households will be poorer and more of them will be unemployed. There will be no aggregate demand for their products. Households are getting poorer, and due to the austerity, more people are unemployed.

Pretty soon we enter the world of asset price deflation. This is the tipping point when an insane right wing government has sucked out so much demand from an economy that prices drop. Then the real fun begins as people hoard cash and goods as cash is worth more (prices are now dropping) if not spent and goods are more valuable than cash. This throws the economy into a vertical nose dive with hyperinflation as in Weimar Germany and rapidly rising unemployment. Firms lay people off to try and reduce costs.

For a while now I have been focusing on the question of what economic policies would cure the Global Financial Crash. This is actually a trivial question with a straightforward answer. The real question I should have been asking is why hasn’t a solution been proposed and debated. The shocking answer I have come up with is that those with the power to get us out of this mess have decided it is not in their interest to fix the world economy.

Consider that under austerity the relative wealth of the world richest people has increased significantly. For example, the Times Rich List of the 1000 wealthiest people in the UK has shown that their combined wealth has increased by 5% in the last 12 months to a new record high of £414 billion-


[As an aside we might ask why these people are so desperate to earn their second and third billions. My own preconception is their greed is a product of the way they were potty trained, serous only child syndrome and sadistic bullying in certain English boarding schools. Certainly these people are dysfunctional enough that they are capable of inflicting limitless misery on everybody else in order to get exactly what they want.]

Back to the point though, which is to compare the effect of austerity on the super rich and the other 99.999% of the population.

The effects of the austerity policies propagated by the Tory led coalition have been severe and immediate on nearly all of us but the ultra wealthy. 
Average incomes, for example, have dropped by over 6% in the last year in the UK (according to ONS earnings figures). Indeed austerity is likely (with only 10% of the Tories cuts actually implemented so far) to intensify and carry on for at least a decade. For example, presenting its analysis of 2011 autumn statement, the Institute for Fiscal Studies (IFS) predicted real median household incomes would be no higher in 2015-16 than they were in 2002-3. In other words, more than a decade will have passed without any increase in living standards for those on average incomes. The same analysis estimates 1 in 4 children will also end up in poverty by 2015.

So the implications are clear. Osborne’s current policies lead to rising incomes for the ultra rich but grinding poverty for everybody else.

But what would reverse this balance and result in policies that increased living standards for the 60 million UK citizens and constrain the skyrocketing growth in inequality caused by the massive  income gains of the ultra wealthy?

To my mind the reason the entire right wing press, the Institute of Directors, CBI, economic think tanks, Tory donors and so forth are behind the austerity drive of the Tories  is the role of wage equalisation in international trade.

It has been known for a long while (
http://en.m.wikipedia.org/wiki/Factor_price_equalisation ) that when two countries enter a free trade agreement, wages for identical jobs in both countries tend to approach each other. After the North American Free Trade Agreement (NAFTA) was signed, for instance, unskilled labor wages gradually fell in the United States, at the same time as they gradually rose in Mexico. The same force has applied more recently to the various countries of the European Union.

The implication of this is that globalisation has begun to open up the huge workforces of China and India who are currently paid much lower wages than their US and European counterparts.

Given that we know, through Factor Price Equalisation, as long as we continue free trade, that the wages of these workers are going to equalise over the next 20 years. There are, of course, two ways that wages could equalise.

In the first scenario governments in Europe and the US deliberately pursue their current austerity program’s and suppress workers wages. The Chinese and Indian wages gradually rise to meet EU and US levels and the converged wage for workers in a decade or two’s time is modest.

This scenario of course supplies much larger profit margins to the ultra wealthy owners and managers of multinational corporations as their wage bill is low. Bankers are happy as austerity allows greater indebtedness of households to them and inflation isn’t allowed to eat into the real interest paid by households on the debts owed to those that have lent the money. As a side benefit, privatising the profitable parts of the state (tuition fees, the NHS, NATs etc) under the excuses of austerity allows further tax payer backed profit opportunities for multinationals.

The other scenario for wage equalisation is sovereign debt monetization, tax reform , financial transaction taxes, Keynsian stimulus etc. These policy responses are not to be welcomed by the global elite. Although citizens would likely welcome these economic policies as they would result in rising living standards, higher employment and economic growth they would circumvent the Austerity for the hundreds of millions of citizens in the US and Europe and result in wage equalisation of EU/US workers at a higher level with workers in China and India. This is an unacceptable outcome for the worlds global elite who will lose profit margin from the higher wage bills they will need to pay their workers.

This is the reason we see the forces of business, Tories, all right wing economists and so forth lobbying so hard for austerity and the continuation of misery.

Monetization of government debts is perfectly safe in a liquidity trap. It would solve the need for austerity and allow governments to repair their economies. Unfortunately the global elite want depressions as unemployment lowers wage demands, increases the time debtors owe money to creditors and increases interest rates and their yields.

It works thus-

There are two parts to QE. The first part is where the Bank of England uses its privileges as a central bank to magic some money from thin air, buy a truck load of outstanding government debt from banks and credit their reserves with the money it has created.

This is the part that should be and is designed to be inflationary. Money is created and the banks should, in theory, be able to leverage the reserve crediting up and stimulate demand in the wider economy with it.

In the last couple of years the Bank of England has created £325 billion this way. So what has been the effect on the money supply?


“Figures released by the Bank of England on Wednesday showed that the UK’s broad money supply, M4, shrank by 5pc in the past year to a new record low.”

QE obviously isn’t working in the way it is intended. The credits given to banks are not finding their way into the real economy. QE is simply not stimulating growth in the money supply in the way it is intended to.

So what has gone wrong?  In short – bankers greed.  Banks demand a 15% return on equity to enable them to support their “business model”  of spending over half their turnover on pay packets that average £350,000 . This level of return is so high and greedy that banks have no interest at all in lending for mortgages or to small businesses – the returns are too small.

As credit creation in banks is the only way the UK economy can widen its money supply and credit creation in banks is responsible for 97% of the money supply growth. If banks won’t lend then the money supply doesn’t grow and our economy shrinks. The money supply must widen by at least 5% pa for any growth (money supply growth averaged 10% pa in the decade before the 2007 crash). That isn’t happening so we are in recession.

The other source of growth is government spending, but since Osborne is taking many multiples of £150 billion out from public sector spending this virtually guarantees we enter a depression.

Is there a silver lining though? Yes – the Bank of England has successfully bought up a third of the government debt that Cameron and Osborne are withering on about without sparking an inflationary spike in the money supply.

Given that everybody was expecting QE to feed through into growth in the UK money supply, there was always planned to be a second part to it.

The second part of QE is the insane bit. Sitting in the wholly publicly owned Asset Purchase Facility is £325 billion of outstanding government debt. The same debt Cameron says it is critical we eradicate. His plan for it is that in a few years time, the Asset Purchase Facility should sell it back out to the banks we bought it off and then rip up the money the banks give us for it.

Given the original reserve crediting didn’t cause the money supply to widen this is just treasonous and insane. The resale obviously can’t be inflationary – the money creation bit from part one happens over 5 years before the reissue of gilts.  Reissue will obviously be deflationary as banks will allocate liquidity to buy the gilts instead of using the money for something else. But it cannot be inflationary as there is no money creation at that point. The second part of QE should be abandoned. A sensible government would announce that the money supply is shrinking, that the £325 billion in the Asset Purchase Facility can be safely monetized and that public sector cuts are cancelled and a £175 billion stimulus package can safely be afforded.

How likely is this? Given how corrupt, incompetent and misleading is the current government to mis-explain how the economy works, in order to justify selling off the public sector to their friends and funders? The Tories and their backers want high unemployment and household debts to rise as this lowers wage demands and increases corporate profits. They are deliberately engineering a slump in order that the banks who provide 50% of their funding and the donors who can afford the £250,000 dinners with Cameron can slightly increase their profits.

Business is sitting on £700 billion of retained profits, banks are rich enough to pay an average of £350,000 to their staff. So what does Cameron do? He abolishes the bankers bonus tax, drops the 50p highest tax rate, lowers corporation tax and exempt overseas subsidiaries of multinationals from paying tax. The rest of us get a 5% hike in VAT, trebling of university tuition fees, youth unemployment raised to 20% and once again (as with Thatcher) unemployment knocking on 3 million people.

This is the real reason the economy went from growing at nearly 4% pa in Alastair Darlings last 12 months to contracting in the last 12 months. Cameron and Osborne have sucked all demand out of the economy and with his fiscal tightening has allowed the UK money supply to contract. Businesses and banks have plenty of money. It’s their customers that don’t.  Tory policies that hurt families and help the rich will continue to intensify the recession as they suck demand out of the economy. Until we get a left wing government we will remain in a prolonged slump.

This government is corrupt and evil. It is pure out and out class warfare  It must be stopped.

Don’t fall for the idea that future tax revenue are required to pay-off government debt.  In fact, it is a myth that taxes “pay” for any government spending.

When an economy is at ‘full capacity’, (i.e. very low unemployment and all resources in the economy being used productively), a government may wish to spend say £20Bn on something everyone agrees is needed – it could be repaying govt debt, defending the country, building hospitals, whatever.

When it spends this money it inevitably causes inflation – this is because you have more spending chasing the same amount of goods and services. The amount of goods and services does not change because the economy is already at full capacity.

To enable the government to spend without causing an inflationary spiral, the government taxes by an equal amount to prevent the private sector spending by the same amount – so overall the spending (public and private) remains roughly constant, so there is no inflationary spiral.

So the extra tax is to prevent an inflationary spiral when the economy is at full capacity – it is not required to “finance” government spending. This is why government economics is nothing like household economics.

However, when an economy is in the position ours is in, with excess capacity, spending by government is permissible without taxation because it doesn’t cause inflation.

Given that our economy has not been at full capacity for over 30 years (hence the high unemployment), the government does not need to increase taxes or cut spending elsewhere to “pay” the interest on government debt or to “pay” for anything.

The big question is why does the government issue bonds at all and pay interest to private investors? Why doesn’t the government just create the money at the mint or Bank of England – this won’t be inflationary as there is spare capacity.

An answer often given is that when governments issue bonds, someone has to surrender money to the government. If it wasn’t for the bond that money would probably have gone into the banking system instead. This is called a ‘reserve drain’ and was clearly necessary when we had the Gold Standard/Bretton Woods or some other type of Fixed Exchange Mechanism.

The argument given now is that debt is a better way to stimulate the economy. Supposedly there is a problem with a liquidity trap in the banking system. By issuing bonds the government can take money away from the banking system and make sure that it is being spent.

However, it’s pretty obvious that for countries with their own floating currency, deleveraging banks and with economies working at way, way below spare capacity that you can use QE to clear government debt at will without any inflationary effects.

This is obviously in the UK since there is £325 billion sitting in the Asset Purchase Facility. This money was bought using reserve crediting in 2009-12 and the result of the purchases was deflationary – M4 last year after £200 billion of QE had hit stall speed with growth at only 2% (more than 5% growth is needed to prevent the economy contracting).

So we are left with a ridiculous situation where the Tories are moaning about the huge and “unaffordable” government credit card bills. At the same time over a third of the debt they are moaning about is stuck in the government owned Bank of England with no hope of it ever being anything other than cancelled and retired.

To add to the hilarity, the Treasury, through a wholly government owned agency called the Debt Management Office pays interest on the £325 billion in the APF to the wholly government owned APF. This money is just building up and will eventually (as all profits for the Bank are) be returned to the taxpayer. You couldn’t make this up.

So clearly in economic circumstances such as now you can print money directly, buy outstanding government debt and retire it with no inflationary consequences.

Nevertheless Governments are continuing to use an explanation built up at a time of Bretton Woods with full employment, fixed exchange rates and no deleveraging to explain why they don’t use the QE to clear down debts.’

Related post:

Barclays and banker greed.

The Bears explain Bank Bailouts


The bears explain the bank bailouts in the US but the same principles apply in the UK.


Parasitological post-script:

Over-parasitism of a host species results in the collapse of both the susceptible host and parasite populations. The technical term, in biological circles, is ‘killing the goose that laid the golden egg’. However, over-parasitism may also fuel selection for ‘geese’ that fight back. Bankers beware!

Barclays and banker greed.



These accounts of our banking system were left on a Guardian comments thread in response to the revelations about Barclays, and other banks, ‘fixing’ the Libor interest rates for their own profit interests.  They deserve wider coverage.  To paraphrase a tweet from one-time-Cameron-favourite Philip Blond .. the banks’ actions evidence the mythology of a ‘free-market’.  The four excellent and informed pieces are all written by the same author, Payguy2 .. with my emphasis in bold.

We watched as the banks greed caused the deepest World recession since the 1930’s. We see a quarter of our youth on the unemployment scrap heap.

We watch as the banks receive a trillion pound public investment from us the tax payers.

We watch as the opportunity cost of this investment is played out as the deepest cuts to our public infra structure since WW2/the Great Depression. Millions will be made unemployed. Hundreds of thousands will lose their homes. University fees triple to £9,000 a year.

We watch as this artificially maintained recession drives down wage demands and keeps us, the public, subservient with declining living standards whilst the global elite make out like bandits.

We watch as the banksters trouser billions of pounds in bonuses and pay rises whilst we, the public, endure years of stagflationairy reductions in living standards.

We watch as banks trouser further billions from quantitative easing and use it to speculate on oil and food, driving up the prices we have to pay to live.

We watch as the banks have enough money left over from the taxpayers gifts, after their bonuses of course, to fund over half of the Tory parties election budget.

We watch as the Tories reward the banksters with changes to the tax laws that allow no tax to be paid on overseas profits. A policy that no other country in the world has except Switzerland. In addition the Tories remove the bankers bonus tax and reduce corporation tax,

We watch as the banks reward the global elite by maintaining a shadowy network of trusts, quasi banks and other tax avoidance vehicles based in Jersey, Sark, Guernsey, Hong Kong, the Cayman Islands etc.

The level of avoidance is gargantuan with for example the authoritative US periodical TaxAnalysts estimating that conservatively in 2007 that the Crown Dependencies hosted about US$1trillion of potentially tax evading assets. This equates to about $30billion a year in avoided income tax alone and only measures the scale of avoidance in three tax havens.

We watch as the banks rip us off by borrowing from each other using insane FRB techniques and the absurdly low Bank of England rate (0.5%) yet charge us, the public, interest at 10 times this level on our loans and mortgages. We watch as the banks and their shadow arms and hedge funds short all the crippled European sovereign bond markets precipitating huge interest rate costs to taxpayers and threatening another economic collapse.

We watch as the banks borrow at 0.5% and then force our governments to pay them 3-4% interest on the bonds needed to pay for the taxpayers bailout of the banks. This is in itself insane and costs the government £20-30billion a year. The banks bought 97% of the government debt issued over the last 6 months (£36 billion worth) and trousered a tidy 3.8% interest, you and I have to pay them for the privilege.

We the public should demand not just ring fencing but separate ownership of casino and retail banks.

We should demand a Robin Hood or Tobin financial transaction tax.

We should demand the return of the bonus tax.

We should demand an increase in contingent capital ratios to the levels seen in the 1970s and the level adopted now by Switzerland (e.g. 20%).

We should demand an end to Over-the-counter derivative trading and insist on these monstrous immoral bets be traded only in registered stock exchanges.

We should demand an end to tax avoidance by transfer pricing and the use of shadowy secrecy tax havens such as Jersey, the Cayman Island and Gibraltar. Places where the banks shelter the money of every gangster, terrorist, third world dictator and mafia boss on the planet.

It’s not likely though with the banks providing over 50% of Tory party funding and a third of Tory MPs having worked or are still working in the City. These people would rather lie and put the blame on previous government or public sector workers.

We are not all in this together. We are living in a kleptocracy. The bankers should pay for the mess they caused. They should be taxed, not ordinary citizens or public sector workers.

When will somebody do something about these people?

My morgage has cost thousands of pounds more than it should have because of this fraud. Will Barclays traders, management and shareholders (who are reposnbile for holding the company responsible) be prosecuted? Will I be able to sue Barclays for their fraud?

Banks are the real cause of the deficit, not public spending. The Government pays banks usurious interest on future borrowing for no readily apparent reason. Ban fractional serve banking and regulate the banks properly. The following is just one example of how our banking system causes recessions, inflation and public sector debt.
The Mint is the only bit of Government that can create money. The notes and coins it makes comprise only 3% of the “money” in circulation.

The other 97% is created by spivs/banksters who take money they’ve either robbed from the real economy with usurious interest charges (e.g. ten times the rate they borrow at due to the UK governments guarantee) or been given for free from a bailout/QE operation (again taxpayer money).

For example, say SirGreedy of Chinless-Shonky Bank gets his greedy mits on £1,000,000 from the real economy. He then borrows £30,000,000 from his friend Piers Bigend at RSWipe bank using the £1,000,000 as collateral.

He is able to borrow the £30,000,000 at a ridiculously low rate of interest as the money he is holding is 100% guaranteed by the UK Government. So he is likely to only to have to pay 1% or less interest on the loan (LIBOR or Euromarket rates).

SirGreedy takes the £30,000,000 and he might choose to gamble the money by speculating on food futures or shorting a European currency if he can persuade enough friends to join in on the pillaging. The UN recently pinned the blame for rising World food costs on bank speculation and it is undoubtedly the cause behind the food riots we are seeing in Africa and the Middle East.

But if SirGreedy is feeling cautious or has no friends a good safe bet is to buy a UK bond. It is 100% guaranteed by the UK Government and will pay him a return of 4%. He keeps this for a year and then sells it back to Bigend.

Sir Greedy repays his loan to Bigend (who makes £300,000K “profit”) for his bank RSWipe.

Sir Greedy takes home the 3% profit (£900K) he has made. He books it as a 90% profit on the £1,000,000 initial capital he had.

It’s now bonus time and both traders point to the hundreds of thousands pounds of profit they have made and its trebles all round and fat bonuses for both of them.

Notice there was no risk in any of these transactions as they are all underpinned by cast iron guarantees from the UK Government.

The UK taxpayer has lost £900K and gained nothing from the transactions.

In terms of inflation and effect on the real economy. £1,000,000 has disappeared from savers/house buyers somewhere and has reappeared as Government debt to the banks (£400K).

The £1,000,000 has turned into £1,400,000 causing inflation eventually.

In all likelihood it is very unlikely that exchanges would be this one sided. Much more likely that BigEnd will lend Sir Greedy £30M to play the game and Sir Greedy will in turn lend £30M to Bigend. This is why commentators refers to this as “interbank lending” or “Euromarket”.

Essentially its spivs both writing IOU’s for £30M on a napkin, swapping the napkins and magically creating profit for themselves by pillaging the UK taxpayer who as underwritten the whole deal.

Doesn’t look socially useful to me. Doesn’t look too intellectually demanding.

Why are we letting these people pay themselves salaries of 100s of time average wage for things that damage the well being of everyone else?”

And you still blame labour? Bear in mind that over 50% of Conservative party funding comes form banks

Here are some quotes from George Osborne:

August 2007 — FREEING BRITAIN TO COMPETE:  Submission to the Shadow Cabinet, Economic Competitiveness Policy Group (Conservative Party):

“The last ten years in particular have been good years for the world economy as a whole. They have been characterised by two massively favourable trends. The first is an era of easy money. The main central banks worldwide have opted for low interest rates, the ready creation of credit, and tolerance of innovatory means of financing public and private sector activity through big increases in debt. It has been the era of public/private partnerships, specialised credit-based funds and funds of funds, collateralized debt obligations, collateralized loan obligations, credit default swaps, special purpose vehicles and many other similar ways of raising borrowing throughout the financial system.”


A Conservative government would match Labour’s projected public spending totals for the next three years, shadow chancellor George Osborne has said. He pledged two years of 2% increases. The final year total would be reviewed […] Mr Osborne said government spending under the Conservatives would rise from £615bn next year to £674bn in 2010/11. He said, like Labour, the final year total would be reviewed in 2009. He said the move would create “headroom” for lower taxes because the economy is expected to grow faster than public spending.


“The scale of the crisis facing our economy should not be underestimated. In recent weeks the banks have all but stopped lending to each other and businesses and families are also suffering from the credit crunch. We made the key judgment over a week ago that it may be necessary to take significant steps to help save the banking industry. That’s why we back, in broad terms, what the Government has done. “We have taken a lead in defending the interests of taxpayers by demanding that taxpayers’ money must come with conditions. The banks that will be most reliant on that money are those that have taken the greatest risks and in some cases behaved irresponsibly. “That’s why I pressed the Prime Minister yesterday to guarantee that there will be no bonuses for senior executives of those banks this year. That is a justified requirement given the situation these banks find themselves in. There should be no rewards for failure.”