Guardian UK: How did the banks get off so lightly?

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Spending review: how did the banks get off so lightly?
As the taxpayer endures yet more pain, Jill Treanor asks: will the City's day of reckoning ever come?

Jill Treanor
guardian.co.uk, Thursday 21 October 2010 21.34 BST


Two years ago this month, a pale and visibly shocked Gordon Brown promised that "irresponsible behaviour" by Britain's bankers would be "punished". The prime minister was angry at the level of public money needed to support banks, which eventually ran into hundreds of billions, after the credit-fuelled system expanded out of control in the run-up to the banking crisis of October 2008.

Two years on, as the taxpayer endures more pain while the government that replaced Brown's axes £81bn from public spending, the banks have returned to practices they enjoyed in the good years, seemingly bearing few scars of the punishment promised. After the coalition unveiled its £2.5bn-a-year bank levy yesterday, unions were quick to seize upon the apparent unfairness in the treatment of banks while the poorest and most vulnerable in society were being hardest hit by George Osborne's austerity Britain.

"Those who caused the recession will be cracking open the champagne today, while the full extent of the attacks on the living standards of poor and middle income Britain are starting to sink in," said Brendan Barber, general secretary of the TUC. Referring to MPs who endorsed the cutting of benefits in the chancellor's spending review, Barber said: "With government MPs cheering cuts in support for some of the most vulnerable in society, it looks like we have gone back to the 1980s 'greed is good' culture."

As Osborne wielded his axe and warned of the loss of almost 500,000 public sector jobs, banks had given a taste of the bonuses staff may enjoy this year. Goldman Sachs, the Wall Street bank with a large British operation, was attempting to show restraint but managed to set aside $370,000 (£236,000) per employee in "compensation" for the first nine months of the year. ..........(more)

The complete piece is at: http://www.guardian.co.uk/politics/2010/oct/21/spending-review-banking-city