Whilst MPs were thin on the ground at Conservative Party Conference due to Parliament’s sudden return, we still managed to put on a great panel featuring influential Respublica think tank director Phillip Blond; Special Advisor to Triodos Bank James Vaccaro and Rebecca Park from UK Finance; the lobbying arm of Britain’s financial sector.
Positive Money director Fran Boait kicked the discussion off by outlining the myriad ways in which Britain’s banks are failing local communities and the wider economy by prioritising speculation over productive investment, lending towards fossil fuels, and limiting people’s access to cash and other basic banking services across the country.
Panellists (from left to right) James Vaccaro, Phillip Blond, Fran Boait and Rebecca Park
First up to respond was UK Finance’s Rebecca Park. While she defended the record of the banks she represents, she did admit our financial sector is in need of change particularly to convince the public that it is a force for good which, as she conceded, it’s not currently doing a very good job of if!
Next up was Triodos’ James Vaccaro, who began by outlining how the Bank was founded as a challenge to the paradigm of banking and its purpose in society, before turning to the connection between banking and climate action. He’d recently returned from the UN’s 2019 Climate Action Summit in New York where scientists had warned we might be tripping into a 1.5 degrees increase in global temperatures in the next three years, and a 2 degree rise within the next seven to eight years. Since, in such scenarios, there will be no banking sector or even no economy, James urged regulators and governments to rethink mandates. “The only way of keeping savings safe is to save the planet,” he said, explaining the need to look at the impact of bank lending and assess whether it will help transition our economy to avoid climate catastrophe.
Phillip Blond’s speech focused on how banks have increased wealth inequality in the UK. By misusing their power to create money to pour credit predominantly towards real estate, asset prices have been driven out of step with incomes, locking workers out of owning their own homes. A problem exacerbated by the Bank of England’s suppression of interest rates, as we’ve argued before. As Philip provocatively argued; “we’re seeing a return to a middle ages form of lord and serfdom, except the serfs have it better in some ways.”
Phillip also discussed the problem of bank’s creation of money as debt. Summarising; “the banks are progressively generating debt to fund an unequal system where they misallocate capital, particularly but not exclusively to unproductive assets like property that further disenfranchise people, that creates more need for debt, that requires banks to create more debt”.
He cited our own proposals to restrict banks’ ability to create money as a potential solution to this vicious circle, before concluding that he’d like to see this responsibility for credit production be given to new regional banks, rather than remain solely in the hands of the Bank of England.
We had some great questions from the audience on topics ranging from whether the Bank of England should introduce digital cash, to what could be done to stop banks lending towards profitable but unethical industries such as fossil fuels and arms. We were able to share the concerns of the wider Positive Money network thanks to the hundreds of supporters who submitted questions and undoubtedly raised the profile of money and banking reform in the minds of all party members who attended.
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