Who is paying for the crisis? It is not the banks, that is for sure. The Bank of England may have cut their interest rates to zero, but that hasn't stopped the banks from increasing their net interest rate earnings; the difference between what they receive on their loans and what they spend on interest payments on deposits and other financing operations. Since the crisis began,their interest earnings have increased by about £15 billion per half year.
Now, the banks are carrying a large stock of bad loans. That is reflected in their higher impairment charts, which have increased quite a bit (see chart below).
But what about the bottom line? Have banks seen a huge fall in pre-tax and provisioning profits? Of course not; profits are higher now than before the crisis.
The financial crisis has been a sequence of scams perpetrated by bankers. In the 10 years after 1997, UK banks fired up an almighty housing bubble. By 2007, the banks were full of bad loans and dodgy investments. But that didn't affect the income streams of banks. Instead of sucking up the losses, banks went crying to the Government and the Bank of England. The Government handed over uncountable billions of pounds of tax payers money. The Bank cut interest rates to zero, screwing every depositor and saver in the country, and ensuring that banks became even more profitable after the crisis than before.
Despite all the bad investment decisions, price fixing, miss-selling, money laundering and insider trading, the banks are doing better than ever. There are no consequences and no accountability. The bonuses continue to be paid, profits are up and no one except those chumps Bob Diamond and Fred the Shred lost their jobs.
It is time to stop blaming the banks. It is our fault. We let them get away with it. We allowed them to walk all over us, to pick our purses and then walk away. We didn't stop them when they powered up the bubble. We allowed the banks run the economy into the ground. We didn't stop them when ransacked the treasury so that they could continue to pay huge bonuses as the economy contracted.
We deserve to be rolled over and screwed because we never had the collective will to put a stop to it. We didn't take responsibility for our own country and cry out "enough". We just let it happen to us. Now we are paying for our spinelessness.
(In case, anyone is wondering where this data comes from, well, it is from the Bank of England's very own Financial Stability Report.)