MUST WATCH: Jazeera’s counting the cost takes on the banking system and the reality of banking. Must Watch, simple, 25 min, explanation of an exceptional injustice.
From Lehman to Libor, scandal and even criminal activity have stalked the banking sector. Despite taking taxpayers money to survive the North Atlantic financial crisis, there is very little evidence the banks are actually using that money to help bolster economic growth.
That has many questioning the role of the banks, and it surprised us that our commercial banks are actually responsible for creating 97 per cent of money. The way they do that, they create money into existence with a few taps on a keyboard.
So, who is actually in charge of all the money? Are the bankers and the system out of control? And with banks failing the West, does Islamic finance have some answers to the world’s money troubles?
Joining Counting the Cost to discuss these issues are: Professor Jem Bendell of the University of Cumbria and Tarek El Diwany, a senior partner at the Islamic investment and finance consultancy Zest Advisory.
Having taken taxpayer money, the banks have been reluctant to loan money out. A problem entrepreneur David Fishwick had to deal with, as his clients could not buy his minibuses because they could not loan money from the banks. When he decided to turn his hand to opening a bank in his home town of Burnely, he quickly ran into a lot of red tape.
We speak to David Fishwick about his experiences and his decision to take on the banks and the system which regulates them, to set up his own small-time bank for everyday people.
He says: “It [trust] doesn’t exist any more [in the banking sector], but it does if you put social responsibility back into people, they do pay …. My little ‘bank’ is completely different from most banks …. We keep it in one big circle, a community bank that works for the community, that serves the community, that we get a 98 per cent payment rate on because it’s for the community.
If a bank is too big to fail, then it’s just too big to exist and it shouldn’t be there in the first place. If banks are kept small and they are run by capable people who are very comfortable with the amounts of money that are going in and out, we would have never gotten the problems that we have got at the moment. But the big problems that lie at the door of the banks: When people rob banks they go to prison, when banks rob people they get bonuses. That has to stop.”