The rich list winners could foot the bill...

Workers' Fight workplace bulletin editorials
28 April 2008

To apparently alleviate the "credit crunch", the Bank of England (BOE) is to open another lending facility for the big banks. But according to financial commentators, this new bail-out does not include what has already been lent - a total amount which is veiled in secrecy.

However, the greed of the banks is such that there is every indication that this amount is likely to be doubled. Already figures of up to 100bn or more have been mentioned.

One of the (few) conditions put by the BOE on this lending was that the banks should also go to their shareholders for more money. But no amount was specified, nor was any mechanism put in place to force shareholders to cough up.

So, for instance, the Royal Bank of Scotland - RBS - which is to be one of the big borrowers from the BOE, has just asked its shareholders for 12bn. Yet this same bank, well into the credit crunch last October, actually found the where-with-all to fork out 56bn in order to buy part of one of the largest Dutch banks, ABN. Why was it not told that before it can be given any hand-outs from the BOE, that it should get that 56bn back, one way or another - like by reselling ABN? Yet, on the contrary, RBS has actually announced that, thanks in part to this merger with ABN, it will be axing 7,000 jobs! So the BOE is not only, in effect, subsiding an acquisition by RBS, but it is also promoting job cuts!

One may ask why on earth it is that such a bank needs to be getting taxpayers' money pumped into it by the billions in the first place. It owns Natwest, the Queen's own bank, Coutts, and even Angel Trains, among many other assets. But of course, that is the nature of this system. The poor pay while the rich play. And despite the so-called "credit crunch" the rich do not seem to be suffering much.

As the Sunday Times Rich List asserts, "the global billions ride the storm"! The richest 1,000 people in Britain have increased their wealth by 14.7% since last year, having quadrupled their wealth since Labour came to power 11 years ago.

The total wealth of this top 1,000 comes to "only" 412 billion. So if someone has to pay for the crisis by providing credit and so-called "liquidity", then why not ask them?