This website started in 2010 in the hope of promoting the idea of a ‘truth commission’, tasked to investigate and explain the 2007-8 banking crisis and its consequences for the UK public.
Elsewhere on this site, suggestions are made for how such a commission could work, and how it might operate. While a few journalists and politicians have come up with similar ideas, there has as yet been no concerted effort to establish body or process of the kind suggested here.
Levels of public understanding of what has happened to the global economy in the last five years remain low. While public anger against bankers and financiers surfaces regularly, it has achieved little by way of change. Successive scandals come to light (PPI mis-selling, bonuses, tax evasion, manipulation of LIBOR) and yet the City of London continues to operate much as before.
The idea of a UK ‘truth commission’ on banking would be to supplement proposed regulatory reforms through two means:
- involving a wider public in unpicking the workings of international finance, exploding myths where necessary, and helping to reshape UK retail banking as a public service of genuine social utility.
- challenging, through peer pressure, the values and behaviours of those parts of banking and finance (along with associated sectors of the law, accountancy, and management consultancy) that have lost all sense of professional responsibility to their fellow citizens.
The UK has done less than other countries to hold detailed investigations into how and why the banking crisis arose. It was three years from 2007 before the Independent Commission on Banking (the Vickers Commission) was set up. Its task was to make recommendations on the future regulatory framework, and its two reports told us little more about why major UK banks failed so catastrophically in 2007/8.
As explained under ‘other inquiries’, citizens elsewhere in the world have had the benefit of detailed investigations of the events leading up to the credit crunch. People in Iceland, the USA, and the Irish Republic have had a better opportunity to understand the individual and corporate failings that have so badly damaged their futures.
For the UK public, it has sunk in only slowly that our future lives have been similarly damaged, not just for a year or two but for a decade or more. Life has not returned to ‘normal’, and many years of worsening austerity still lie before us. The next generation face a very different economic future.
Meanwhile bankers have urged that ‘the time for remorse is over’ and that they must be allowed to get back to business as usual. Most of the Vickers recommendations look likely to happen, but only slowly. Global co-operation on regulatory reform moves ahead at a snail’s pace. There is no realistic prospect (at present) of the huge taxpayer subsidies granted to RBS and the Lloyds Group ever being repaid into the public coffers.
In these circumstances, UK citizens deserve better answers to some basic questions:
- How does modern banking work, and what social utility does it provide?
- Why was the UK credit bubble allowed to reach the level that it did?
- With hindsight, was it right to bail out Northern Rock, RBS and HBOS at such vast cost to taxpayers? Could other emergency measures have been pursued in October 2008 to keep ATMs open and address liquidity problems? Was Government right to assume these banks were ‘too big to fail’?
- How far are the bailout costs and resultant damage to levels of public debt responsible for the long period of austerity which UK citizens are now having to face?
- Is it genuinely to our national advantage to continue to act as host country for some of the world’s largest (and riskiest) universal banks? What are the real benefits and costs, and will the public be given a chance to weigh up the balance?
- What are the current risks to the UK created by the global shadow banking system?
- How can we be confident that the same thing won’t happen all over again?
Futher pages on this site explain how an independent commission, mounted by UK professionals to ask questions of their colleagues in banking and financial services, might quicken the pace of change and reform. Other ideas, through which the public could influence the behaviour and working practices of our banks, are also covered. Any new suggestions are very welcome.
Ideas for a truth commission on banking have been put forward in the past by several people, including author and journalist Will Hutton and Jesse Norman MP. Bodies such a the new economics foundation and Compass have suggested broadly similar ideas, such as a Peoples Jury. This website is the effort of one concerned individual, with no ties to any political party or other organisation. It is published in an effort to widen popular support for citizen-led action to reform the banks, and to suggest a practicable route through which a truth commission could come about.
Henry Peterson