Goldman fine: minnow to catch a shark
The biggest fine ever meted out to any financial services company.
Britain’s regulator the FSA visits a fine of £17.5m on the US investment bank Goldman Sachs (casino, to use Vince Cable’s word on Channel 4 News last night).
Suddenly £17.5m seems a very small sum. And sources say it would have been considerably bigger had Goldman not thrown in the towel at an early stage and started negotiating the matter.
Suddenly though you begin to wonder whether the state is any longer a big enough player to cope with these mega institutions. Dare a financial regulator bring the full force of the law to bear. According to my friend, a former treasury chief, a fine of £350m was in play.
£17.5m is therefore a pale shadow of what the FSA originally wanted to levy. £17.5m is breakfast for many of the top dogs at Goldman.
It has me thinking about John Le Carre’s latest book Our Kind of Traitor in which he explores his conviction that capitalism in the west is now alarmingly beholden to dirty Russian money in circulation and to the Oligarchs who have control of it.
I have been down to his remote Cornish retreat to interview him in what he describes as his last ever TV interview. I’ll be blogging and writing about it in the coming days – watch this space.
Goldman today, the oligarchs tomorrow? Not.
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There are 23 comments on this post
The problem is not Goldman Sachs,bujt of course, Money.Money has become power,and the financial institutions produce so much that at this moment in time our government and others are so reliant on their money that they are afraid of them.Were that no so , several of the big players would have spent their day in court over the recent fiasco.Governments missed the opportunity to bring the banks to heel when they were there with their begging bowls.Instead they punished the small man who does not have the power to retaliate.
The current tax debacle is all the proof you need to see that.It is time that those with money were made to pay in accordance with their wealth.The fine with GS is laughable as is the control over bonuses or lack of it.
Jobs will go shortly from the public sector and more will go than needed because of banks and bankers who seem to think they are above the law.
How odd – I agree with every word Adrian says! (Well, not quite – I’d quibble about financial institutions producing anything. I’d say all they do is redistribute what other people produce.)
Money has not become power, Money has always been power.
Tom you are nearly correct , but once upon a time , what one had to offer in services and goods was power .Even when money became the means to exchange goods of different values it wasn’t the power it is today.It is the institutions that have decided money itself is a value that have grabbed the power it produces.Those in power(governments) need to control that power , before it is too late
That can only be done by a massive redistribution of wealth .My mind is working on it.
“A massive redistribution of wealth”, Adrian? That’s the sort of idea Saltaire might have proposed – but YOU? What’s happening?
The Power controls the Governmant – and always will .
”That can only be done by a massive redistribution of wealth ”.- Adrian – that is Socialism .
”My mind is working on it.”- Dont waste your time – the die is cast – and good luck to the Super Rich – fools voted for their hacks .
Annie, i suppose you might call redistribution ,Socialism but i do not consider myself a socialist and would never vote for Labour , because they are a class conscious party.I do not believe in class.No person is better than me and none worse.I do not like those that become rich by taking advantage of others .I am a convert to LVT because i think it would be a fairer taxation system , that stops tax avoidance and is aimed at those that can afford it.
I met John Le Carre 26 years ago in Majorca and am hoping that the interview is to be televised.
I don’t know how GS have managed to negotiate and dwindle the fine down from 350 mill to 17.5 mill . They must have some pretty powerful players to undermine the FSA in such a way or does the FSA just look a little pathetic.
”It is time that those with money were made to pay in accordance with their wealth.”- the chances of that happening are about the same as me winning the lotto every week for next ten years . The Nation state to these mega institutions is a thing of the past – they put their factories and their money wherevr labour is cheapest – they have no National affiliations – their only object is to make more money for the tiny minority that own and run these mega corporations . They own and elect the politicians – who spout their lies every four years or so – and worse are believed . There are no major differences between the main parties in most wetern countries – all obey – and take their money from these moguls . The future is bleak – unless people make it different themselves – and stop defending the indefensible .
Given the mini-rush of city bankers in to the coalition in recent weeks it is more a case of “unwilling” rather than “unable” to ask their friends and former colleagues to behave responsibly/ethically.
By the way what was that budgie report all about? What a wast of air time. I feel sorry for the poor chap who lost his birds, but really is this nation news?.Perhaps that 5 min report could have been replace by more important news , say the floods in Pakistan.
Russian money, alongside bankers’ bonuses/multi-million salaries, is certainly continuing to push London property prices to ever more absurdly obscene levels – obscene because no-one but the international elite can afford them. Meantime, as we know, there are ‘cuts’ plans in place that will force many out of London, leaving the capital as a(nother) playground for the super-rich. Interesting to see, in this context, that London’s Tory mayor Johnson is opposing cuts in housing benefit (HB) for the city’s recipients of same. Boris knows that rents are increasingly unaffordable. It’s true that HB’s in need of drastic reform, fuelling the tax-avoidance/coffers of the buy-to-let rentier class but what we need is a complete rethink of housing – second homes, included – and a tax on land (Adrian now agrees) to replace the wholly regressive and years’ out-of-date council tax. Take oligarch Roman Abramovich’s plan to buy a block of eight London flats and turn them in to one (more) home for himself. He’ll pay the same CT as everyone else in the same band. Looked at another way, CT is subsidising the super-rich. NB this isn’t ‘envy’, a word Jon used in his blog on TB.
But it’s not altruism or a sense of fair play prompting Boris’s opposition! He knows darned well that if the lowly-paid menial workers, like the bin-men, hospital and office cleaners, bus drivers etc., on whom London relies, can’t afford the rents & move out/don’t move in, London grinds to a very messy halt. It’s quite satisfying to see at least one Tory hoist by his own petard.
Of course, Anniexf. I’m not for a minute misled by Boris’s actions. Mine was a comment on the multi-millions fuelling London’s housing, nothing more.
Housing, whether bought or rented, is a market-place, fuelled simply by the money available to pay for it and the local supply & demand mix.
London has long been an extreme example, where the apparently infinite supply of money has dominated the market-place, skewing prices to unaffordable levels, especially for those of modest means (often in essential service jobs).
If, and it’s still a big IF, the coalition’s proposals to limit Housing Benefit hit home, they will dramatically affect this whole market-place, dragging down all rents to more affordable levels. And, since buy-to-let will no longer be so attractive, fewer will invest in it, so purchase values will progressively reduce too, improving affordability for individual buyers.
The problem for Boris (and the coalition) is that this market-changing process will take time and will not have completed its cycle before they hope to be re-elected. How they manage to square the short-term politics with the longer-term economics of it may be fascinating to observe.
Annie you leave petards out of this
Meantime, Mudplugger, what happens in the real world to those – as you say, likely to be providing essential services – who can’t afford to stay in the capital once HB reduced? Social/class cleansing is surely no more acceptable than ethnic?
Meg,
The real world problem is that, for a period, it will be tough – very tough for some, especially those at the bottom of the heap.
I don’t see it as social cleansing (and sincerely hope it isn’t), but that is a risk in the short term. The hope must be that, as the process evolves and prices move to more sensible levels, all will then be able to find suitable accommodation within their own budgets. But yes, while it’s in the process, it won’t be easy. But what’s the alternative ?
Brief response, Mudplugger: LVT, possibly the fairest tax there is – now supported by intelligent Tories over at the FT, eg Samual Brittain, tho’ not of course by the envious ‘new’ money property aristos at the Mail – would help bring down house prices substantially by, eg, bringing vacant buildings and land in to use; as a replacement for the wholly regressive council tax it would be of benefit to the poorest. Leaving matters to the free market will mean social/class cleansing. We need to stand up for justice and fairness, surely it’s up to all of us to think of alternatives to an increasingly nasty inequitable world.
Is capitalism dead? We have spoilt-brat tantrumistas (as was Blair) in charge: people who’ve never actually done anything giving-it Daily Mail to the masses. And this is our ‘politics’.
“Suddenly though you begin to wonder whether the State is a big enough player to cope with these mega institutions.” And this is it – in an age where every berk with a gun damns the size of government, someone with a little step-back sense dares to suggest that the State is too small.
Yes, it is too small – it has been too small for a very long time. That swashbuckler Osborne is now targeting Jobseeker’s Allowance, which accounts for 4.75bn of a 200bn welfare budget: it’s small-fry, isn’t it? What statisticians would regard as ‘withing the realms of statistcial error’. It’s inconsequential.
The State is too small. The last century of Liberalism has brought atomising and macro responsibilities with it. There is only society now.
George, you’re right – we really are all in this together.
I see on the news this am that the bankers are already up to their old tricks . Bonuses plus are the order of the day. Why did I not go into banking?
Jon Snow usually posts early after a weekend in preparation for the week. Not today though. I cannot go swimming due to the condition, acute coryza and havn’t even an early blog to ponder on. The weather is lousy and the system is trying to push me out again. Now that would not happen if I had a name for creating wealth,after all money is far more important than health and ethics.
I am definitely with you on this one Phil, except I don’t believe that TB was as much to blame as were the string pullers.
The rants and the raves and the make waves have been more important than the solid, reliable dependables .The scandal makers have has more leverage over the last 20 years. This has been allowed to continue whilst what has gone on? Look at us . We are not the sixth richest nation in the world.. a few are.
MBJ -thanks. I’ve just been listening to Art Garfunkel’s ‘Disney Girls’ – how sad is that????
“Happy times and makin’ wine in my garage;
Country shade an’ lemonade, guess I’m slowin’ down….”