Citizens Electoral Council of Australia

Media Release  Wednesday, 16 January 2013

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au
 

More bankers cry ‘break up the banks’

If you believe the bulldust that Australia’s banks are strong, and the global financial system is improving, ask yourself why every banker and his dog in America and Europe are suddenly begging for the very same Glass-Steagall banking separation that U.S. physical economist Lyndon LaRouche and the Citizens Electoral Council have pushed for four years.

The former National Sales Manager for securitised products at the giant American bank JP Morgan Chase is the latest banker to call for a Glass-Steagall break-up of the banks.

Larry Doyle wrote in his 14 January Sense on cents column in America’s Business Insider magazine under the headline “Why Should The Banks Be Broken Up?” that “it is time we moved to save capitalism”. He pointed out that the banks that were bailed out because they were “too big to fail” in 2008 are now much bigger and are in fact an oligopoly riddled with cronyism that is evidenced in the Libor-rigging scandal, money-laundering, stock market manipulation and insider trading.

“I firmly believe that breaking up the banks, reinstituting Glass-Steagall, and ending the self-regulatory model on Wall Street are issues that an overwhelming percentage of people within our nation will embrace and pols [politicians] from both sides of the aisle can get behind,” Doyle wrote.

Doyle’s call echoes a strikingly similar call to break up Australia’s Big Four banks printed in the 6 August 2012 Australian Financial Review under the headline “Big four might make better eight”. A “retired senior local banker” whom the AFR kept anonymous “due to his current job” popped any illusion that Australia’s banks were immune from the global banking crisis by warning of the “potential for a local bank to get into strife” because they were “too big and complex and should be broken up”.

In London this week, Liam Halligan, chief economist of Prosperity Capital Management, took to the pages of Britain’s 12 January Daily Telegraph to again demand Glass-Steagall for British banks, in his column entitled, “At Last, Question Time for the Money Printers”.

Halligan wrote, “The trouble is that both QE [Quantitative Easing, aka money-printing] and ring-fencing are a disaster waiting to happen. … Until the zombified mega-banks are put out of their misery, the UK will grow only at an extremely sluggish pace, if at all. And without a Glass-Steagall style separation of commercial and investment banking, we’re doing nothing but lining ourselves up for another disastrous collapse.”

Halligan observed the U.S. was very close to enacting Glass-Steagall: “Last week, a new bill was introduced in Congress to re-instate the Depression-era Glass-Steagall divide, jointly sponsored by a high-profile Democrat and Republican respectively [HR 129—Ed.]. While a previous resolution expired during the last Congress, this one seems quickly to be building a head of steam. … Republicans on the House Financial Services Committee and Senate Banking Committee are also floating the view that a clean-break Glass-Steagall separation would be preferable to the regulatory over-kill represented by the Dodd-Frank law. … This Glass-Steagall battle isn't over yet, on either side of the Atlantic. Not by a long chalk. We can only hope it doesn't take another crash to force our governments to see sense.”

Citizens Electoral Council leader Craig Isherwood said today, “It is time to face the truth, and recognise that the present policy of ‘quantitative easing’ money-printing is driving the world into hyperinflationary chaos.

“A Glass-Steagall banking separation, to protect the commercial banks that serve the community from the investment banks that ran up the world’s unpayable, crushing debt, is an emergency measure—the only way—to pull out of the hyperinflationary tail-spin. However, it must be followed up immediately by LaRouche’s two other steps to economic recovery: a public credit system centred in a government-owned national bank, and large-scale infrastructure development to reverse the greenie-dictated shut-down of the energy and food production systems that support our very existence.”

Isherwood called on all Australians to support the CEC’s fight to get Glass-Steagall, and the CEC’s already-drafted legislation for a national bank, the Commonwealth National Credit Bank Bill, enacted into law in 2013.