Driving on the highway, I saw a bumper sticker surely announcing that the political season is upon us: R omney--the R being a flaggy, red and blue affair set off from the rest of the name. Not a big leap to create an anagram: R money, and from that Our money.
Which brings up the Libor mess. Confession: I don't understand the situation fully at all. (Do you?). But what is clear is that another of the too-big-to-fail banks--this time Barclays--played games with Our money.
Our money? Yes, although the Libor regulates the rates at which banks loan each other money, it affects Our money, too. Our mortgages, Our CD rates--every aspect of Our banking and Our financial lives is tied to the Libor.
So, when Barclays, and the other banks that likely will be cited soon along with Barclays, manipulate the Libor to their advantage, it's not an accounting trick, it's not something they can get away with by claiming it was done to help stimulate the economy (yeah, right; like banks couldn't have simply made more loans to help individuals and businesses), and it's not legal.
The half billion dollars in fines Barclays will pay is insignificant in comparison to the profits the banks made through their manipulations and the $800 trillion the Wall Street Journal estimated are tied to the Libor
It's Our Money, damn it.
On the other hand, I recently had the pleasure of taking to Don Shaffer, President and CEO of RFS Social Finance. His institution--he describes it as a combination of a charitable foundation and a bank--looks at banking completely differently.
It invests in local businesses, not mathematical equations at the foundation of complex banking schemes that have already pushed us into the great recession.
It brings together lender-investors with borrower-businesses to meet each other in person and jointly negotiate loan terms that each party (and RFS) finds fair: Quite a difference from selling unsuspecting banking clients mortgages that the bankers know they can't afford or understand.
It invests a fixed sum in a pool of businesses, and allows them to talk among themselves to determine how to split the sum: Quite a difference from banks thinking they're the smartest guys in the room, or planet, and you've got to play by their rules.
This is the kind of bank the country needs for OUR money. A bank that supports building communities and lives. That is not too big to fail, And that, above all, is honest.
Do you think Robert Diamond (Barclays) and Jamie Dimon (JPMorgan) care about OUR money? Or are they are singing another song song: MY MONEY?