AFTER a year in the doldrums the banks are making excessive profits again. The Royal Bank of Scotland has recently reported profits of £1.1 Billion. Not to be outdone, the Lloyds Banking Group made a cool profit of £1.6 Billion.
However, this pales into insignificance when compared to Barclays. In the half year to June, they made £3.95 Billion. That’s a 44 percent rise in profits.
With the City of London awash with money again, it’s no wonder that so many bankers turned up for the recent 50th anniversary bash of the Square Mile, the “indispensable read for City Executives.”
Over 1,500 bankers from Barclays Capital, JP Morgan, HSBC, RBS and Lloyds enjoyed free drinks and entertainment. Many boasted that they were going back to their bad old ways, consisting of “City bonuses, going out, champagne.”
These bad old ways are merely just a reflection of the irresponsible behaviour of the banks. As we previously noted in our article Establish a State Bank (of 31/7/10) the credit crunch was the result of greed. The private banks over-speculated “with their lending. The Government (with cross-party support) had deregulated lending and thus few restrictions were in place to put a brake on any over speculation.”
One would think that the banking industry would have learned from the mistakes that led to the credit crunch. However, with the money seemingly flowing again, we’re not so sure.
The only thing that we can say with certainty is watch this space.