Indigenous people who would be directly affected by the impact of a hydroelectric project in Panama were not consulted despite national and international human rights obligations to obtain their free, prior and informed consent, according to a just-released report.

Acting on behalf of communities in Panama’s Ngöbe-Buglé indigenous territory, the Movimiento 10 de Abril (M-10) had filed a complaint with the Independent Complaints Mechanism (ICM) of the Dutch FMO and German DEG development banks alleging that the Barro Blanco dam project which the banks were financing would lead to the flooding of the communities’ homes, schools, and religious, archaeological and cultural sites.

The two banks were accused of failing to adequately assess the risks to indigenous rights and the environment before approving a 50 million dollar loan to GENISA, the project’s developer.

The independent panel’s report, released May 29, found that the “lenders should have sought greater clarity on whether there was consent to the project from the appropriate indigenous authorities prior to project approval,” adding that “the lenders have not taken the resistance of the affected communities seriously enough.”

“We did not give our consent to this project before it was approved, and it does not have our consent today,” said Manolo Miranda, a representative of the M-10.  “We demand that the government, GENISA and the banks respect our rights and stop this project.”

According to the ICM’s report, “significant issues related to social and environmental impact and, in particular, issues related to the rights of indigenous peoples were not completely assessed.”

The environmental and social action plan (ESAP) accompanying the project “contains no provision on land acquisition and resettlement and nothing on biodiversity and natural resources management. Neither does it contain any reference to issues related to cultural heritage.”

Ana María Mondragón, a lawyer at the Interamerican Association for Environmental Defense (AIDA), said: “This failure constitutes a violation of international standards regarding the obligation to elaborate adequate and comprehensive environmental and social impact assessments before implementing any development project, in order to guarantee the right to free, prior and informed consent, information and effective participation of the potentially affected community.”

In February this year, the Panamanian government provisionally suspended construction of the Barro Blanco dam and subsequently convened a dialogue table with the Ngöbe-Buglé, with the facilitation of the United Nations, to discuss the future of the project.

The Barro Blanco project was registered under the Clean Development Mechanism, a system under the Kyoto Protocol that allows the crediting of emission reductions from greenhouse gas abatement projects in developing countries.

“As climate finance flows are expected to flow through various channels in the future, the lessons of Barro Blanco must be taken very seriously,” said Pierre-Jean Brasier, network coordinator at Carbon Market Watch. “To prevent that future climate mitigation projects have negative impacts, a strong institutional safeguard system that respects all human rights is required.”

The ICM will monitor the banks’ implementation of corrective actions and recommendations, while M-10 said that it expects FMO and DEG to withdrawal their investment from the project and ask that the Dutch and German governments show a public commitment to ensuring the rights of the affected Ngöbe-Buglé.

Edited by Phil Harris   

It is astonishing that every week we see action being taken in various part of the world against the financial sector, without any noticeable reaction of public opinion.

It is astonishing because at the same time we are experiencing a very serious crisis, with high unemployment, precarious jobs and an unprecedented growth of inequality, which can all be attributed, largely, to speculative finance.

Roberto Savio

This all began in 2008 with the mortgage crisis and the bursting of the derivatives bubble in the United States, followed by the bursting of the sovereign bonds bubble in Europe.

It is calculated that we will need to wait until at least 2020 to be able to go back to the levels of 2008 – so we are talking of a lost decade.

To bail out the banks, the world has collectively spent around 4 trillion dollars of taxpayers’ money. Just to make the point, Spain has dedicated more than its annual budget on education and health to bail out the banking sector … and the saga continues.

Last week, five major banks agreed to pay 5.6 billion to the U.S. authorities because of their manipulations in the currency market. The banks are household names: the American JPMorgan Chase and Citigroup, the British Barclays and the Royal Bank of Scotland, and the Swiss UBS.“To bail out the banks, the world has collectively spent around 4 trillion dollars of taxpayers’ money”

In the case of UBS, the U.S. Department of Justice took the unusual step of tearing up a non-prosecution agreement it had reached earlier, saying that it had taken that step because of the bank’s repeated offences. “UBS has a ‘rap sheet’ that cannot be ignored,” said Assistant U.S. Attorney General Leslie Caldwell.

This is a significant departure from the Justice Department’s guidelines issued in 2008, according to which collateral consequences have to be taken into account when indicting financial institutions.

“The collateral consequences consideration is designed to address the risk that a particular criminal charge might inflict disproportionate harm to shareholders, pension holders and employees who are not even alleged to be culpable or to have profited potentially from wrongdoing,” said Mark Filip, the Justice Department official who wrote the 2008 memo.

Referring to the case of accounting giant Arthur Andersen, which certified as valid the accounts of the Enron energy company that went into bankruptcy for faking its budget, Filip said that “Arthur Andersen was ultimately never convicted of anything, but the mere act of indicting it destroyed one of the cornerstones of the Midwest’s economy.”

This was in fact a declaration of impunity, which did not escape the managers of the financial system, under the telling title of “Too Big to Fail”.

Two weeks ago, a judge from the Federal District Court of Manhattan, Denise L. Cote, condemned two major banks – the Japanese Nomura Holdings and the British Royal Bank of Scotland – for misleading two mortgage public institutions, Fannie Mae [Federal National Mortgage Association] and Freddie Mac [Federal Home Loan Mortgage Corporation], by selling them mortgage bonds which contained countless errors and misrepresentations.

“The magnitude of falsity, conservatively measured, is enormous,” she wrote in her scathing decision.

Nomura Holdings and the Royal Bank of Scotland were just two of 18 banks that had been accused of manipulating the housing market. The other 16 settled out of court to pay nearly 18 billion dollars in penalties and avoid having their misdeeds aired in public.

Nomura Holdings and Royal Bank of Scotland refused any settlement and instead went to court against the U.S. government, arguing that it was the housing crash which caused their mortgage bonds to collapse. Judge Cote, however, wrote that it was precisely the banks’ criminal behaviour which had exacerbated the collapse in the mortgage market.

It is worth noting that, until now, the cumulative fines inflicted by the U.S. government on just five major banks since 2008 amount to a quarter of a trillion dollars. No one has yet gone to jail – fines have been paid and the question closed.

Now the question: is all this due to the misconduct of a few greedy managers or is it due to the new “ethics” of the financial sector?

By the way, let us not forget that it was revealed recently that 25 hedge fund managers took close to 14 billion dollars only last year and that the highest paid manager took for himself the unthinkable amount of 1.3 billion dollars, equal to the combined average salaries of 200,000 U.S. professionals.

Well, just a week ago, the respected University of Notre Dame was reported as having published a startling report, based on a survey of more than 1,200 hedge fund professionals, investment bankers, traders, portfolio managers from the United States and the United Kingdom, in which about one-third of those earning more than 500,000 dollars a year said that they “have witnessed or have first-hand knowledge of wrongdoing in their workplace.”

The report went on to say that “nearly one in five respondents feel financial services professionals must sometimes engage in unethical or illegal activity to be successful in the current financial environment” and in any case,  nearly half of the high income professionals consider authorities to be ”ineffective in detecting, investigating and prosecuting securities violations.”

A quarter of respondents stated that if they saw that there was no chance of being arrested for insider trading to earn a guaranteed 10 million dollars, they would do so.

And nearly one-third “believe compensation structures or bonus plans in place at their companies could incentivise employees to compromise ethics or violate the law.”  It should also be noted that the majority were worried their employer “would likely to retaliate if they reported wrongdoing in the workplace.” So, the bonus that goes to those in the financial sector every year practically amounts to a bribe for silence on misconduct.

At the same time, we have learned that in Guatemala the Governor of the Central Bank has been arrested for embezzling 10 million dollars. Of course, everything is a question of scale…but in sociology there is a mechanism called “demonstration effect”.

The example of Wall Street and the City will increasingly seep down once a new “ethic” is in place. It will propagate if it is not stopped … and this is not happening.

A final note. In the same week (how many things have happened in such a short space of time), the Federal Trade Commission of Columbia accused four respected cancer charities of misusing donations worth millions of dollars.

One of them, the Cancer Fund of America, declared that it spent 100 percent of proceeds on hospice care, transporting patients to chemotherapy sessions and buying medication for children. The Federal Trade Commission found in fact that less than three percent of donations was spent on cancer patients.

The “new ethic” is in reality a cancer, and it is metastasising rapidly. (END/COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

By Roberto Savio
ROME, Jan 22 2015 (IPS)

Every day we receive striking data on major issues which should create tumult and action, but life goes on as if those data had nothing to do with people’s lives.

A good example concerns climate change. We know well that we are running out of time. It is nothing less than our planet that is at stake … but a few large energy companies are able to get away with their practices surrounded by the deafening silence of humankind.

Roberto Savio

Another example comes from the world of finance. Since the beginning of the financial crisis in 2009, banks have paid the staggering amount of 178 billion dollars in fines – U.S. banks have paid 115 billion, while European banks 63 billion. But, as analyst Sital Patel of Market Watch writes, these fines are now seen as a cost of doing business. In fact, no banker has yet been incriminated in a personal capacity.

Now we have other astonishing data from Oxfam – if nothing is done, in two years’ time the richest one percent of the world´s population will have a greater share of its wealth than the remaining 99 percent.

The richest are becoming richer at an unprecedented rate, and the poorest poorer. In just one year, the one percent went from possessing 44 percent of the world´s wealth to 48 percent last year. In 2016, therefore, it is estimated that this one percent will possess more than all the other 99 percent combined.

The top 89 billionaires have seen their wealth increase by 600 billion dollars in the last four years – a rise of five percent and equal to the combined budgets of 11 countries of the world with a population of 2.3 billion people.

In 2010, that figure was owned by 388 billionaires, and this striking and rapid concentration of wealth has, of course, a global impact. The so-called middle class is shrinking fast and in a number of countries youth unemployment stands at 40 percent, meaning that the destiny of today’s young people is clearly much worse than that of their parents.“In a world where the value of solidarity has disappeared (Europe’s debate on austerity is a good example), apathy and atomisation have become the reality. We are going back to the times of Queen Victoria, substituting a rich aristocracy with money coming from trade and finance, not production”

It will probably take some time before those figures become part of general awareness but it is a safe bet that they will not lead to any action, as with climate change. U.S. President Barack Obama is the only leader who has announced a tax increase on the rich, although he stands little chance of succeeding with his Republican-dominated Congress.

In a world where the value of solidarity has disappeared (Europe’s debate on austerity is a good example), apathy and atomisation have become the reality. We are going back to the times of Queen Victoria, substituting a rich aristocracy with money coming from trade and finance, not production. But up to a point: 34 percent of today’s billionaires inherited all or part of their wealth, and – interestingly – “inheritance tax is the most avoidable of levies”, as James Moore noted Jan. 20 in The Independent.

The “father of modern times”, late U.S. President Ronald Reagan, saw it clearly when he said that the rich produce richness, the poor produce poverty. So let the rich pay less taxes.

Well, in a just-released report, the U.S. Institute on Taxation and Economic Policy notes that in 2015 the poorest one-fifth of Americans will pay on average 10.9 percent of their income in taxes, the middle one-fifth 9.4 percent, and the top one percent just 5.4 percent.

Now, 20 percent of the richest billionaires are linked to the financial sector and it is worth recalling that this sector has grown more than the real economy, and has regulations only at national level. At global level, finance is the only activity which has international body of some kind of governance, as do labour, trade and communications, to name just a few.

Finance is no longer at the service of the economy and citizens. It has its own life. Financial transactions are now worth 40 trillion dollars a day, compared with the world’s economic output of one trillion.

At national level, there are now attempts half-hearted attempts to regulate finance. But let us look what is happening in United States. The new bland regulation is the Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly known as the Dodd-Frank, and it does not go as far as restoring the division between deposit banks, which was where citizens put their money and which could not be used for speculation, and investments banks, which speculate … and how!

This separation was abolished during the U.S. presidency of Bill Clinton, and is considered the end of banks at the service of the real economy. In any case, the lobbyists on Wall Street are intent on having the Dodd-Frank chipped away at, little by little.

There is some schizophrenia when we look at the relations between capital and politics. The U.S. Supreme Court has eliminated any limit to contributions from companies to political elections, declaring that the companies have the same rights as individuals. Of course, there are not many individuals who can shell out the same figures as a company, unless you’re one of the 89 billionaires!

Meanwhile, banks are not only responsible for the corruption of the political system, and for the illegal activities which have earned them billions of dollars, they are also responsible for funding only big investors, and leaving everybody else out from easy credit. The efforts of the Chairman of the European Central Bank,  Mario Draghi, to have banks give credit to small companies and individuals has gone largely nowhere.

But a new and imaginative initiative comes from the very stern Dutch bankers. All 90,000 bankers in the Netherlands are now required to take an oath: “I swear that I will endeavour to maintain and promote confidence in the financial sector. So help me God”.

This is not so much oriented towards the customer, and it is very self-serving; and it brings God in as the regulator of the Dutch banking system. Perhaps the Dutch bankers have been paying heed to the words of Goldman Sach’s CEO Lloyd Blankfein who said at the time of the financial crisis in 2009 that bankers were “doing God’s work”.

Well God will have to be actively involved. All the three biggest Dutch banks – Rabobank, ABN Amro and ING Groep – have been involved in scandals that have hurt consumers, or were nationalised during the financial crisis, costing taxpayers more than 140 billion dollars. In one case, Rabobank was fined one billion dollars.

New York’s Wall Street and London’s City are said to be open to the idea of introducing a similar oath.

It is probably only that kind of Higher Power which could turn the tide in this world of growing inequality and lack of ethics. (END/IPS COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

The author can be contacted at utopie@ips.org

Excerpt:

More than six years after the global financial crisis broke out, European Union (EU) countries continue to protect banks and investments funds from tougher rules, despite abundant evidence of recurrent criminal or reckless activities in the sector, and new accumulation of enormous financial risks.

The latest in a string of scandals involving banks was the revelation in May that at least seven European banks or banks operating in Europe had colluded to falsely fix the Euro Interbank Offered Rate (Euribor).

The Euribor is a daily reference rate, published by the European Banking Federation, based on the averaged interest rates at which Eurozone banks offer to lend unsecured funds to other banks in the euro wholesale money market.

“The (European) commission has concerns that … three banks may have taken part in a collusive scheme which aimed at distorting the normal course of pricing components for euro interest rate derivatives,” the body said in a statement issued May 22.

The three banks in question are JPMorgan Chase, HSBC and Crédit Agricole. Another four banks (Barclays, Deutsche Bank, Royal Bank of Scotland and Société Générale), also accused of misconduct concerning the Euribor, reached a settlement with European regulators.“Another typical example of the lack of will among European governments to improve regulations and reduce risks in financial markets is the long and so far fruitless debate on the introduction of a very low tax on financial transactions, also known as the Tobin tax”

Because of such behaviour, bank managers have since 2009 again earned the nickname of ‘banksters’, a combination of banker and gangster coined in 1937 at the height of the global economic crisis of the time.

Experts and analysts complaint that despite such criminal activities, and the new accumulation of financial risks, European governments have during the past six years repeatedly intervened to stop far-reaching rules to regulate operations in the financial sector.

The list of actions taken by European governments to spare banks and investment funds from new rules is long. In December last year, the French government managed to arrange for French banks to pay a lower-than European average contribution to the E.U.-created national deposit insurance.

“To obtain that, France used the friendly support of Michel Barnier, the French European Commissioner for Internal Market and Services,” says Burkhard Balz, German member of the European Parliament (EP).  Balz is a member of the conservative Christian Democratic Union.

“Over the last six years we have seen a pattern of behaviour concerning efforts to introduce a Europe-wide financial regulation,” Udo Bullmann, a German Social Democratic member of the European Parliament, told IPS.

This pattern goes as follows, Bullmann added: “First, the European Commission makes a timid regulating proposal. The European Parliament takes the proposal over and toughens its content. But then it is the turn of governments, and they water the proposal down, even under the original commission level.”

Independent experts agree. “The European Union is indeed a community of states, but at the end of the day, the member states compete against each other instead of cooperating to put forward a comprehensive set of rules for financial markets,” says Joost Mulder of Finance Watch, an independent association set up in 2011 to act as a public interest counterweight to the powerful financial lobby.

“What the individual states want is to protect their countries’ banks and investment funds,” Mulder added.

Opposition to far-reaching financial regulation comes from practically every state, but in changing roles. Britain usually opposes rules that would affect operations at the London financial market. It also has consistently opposed establishing limits for bonuses for financial managers, one of the main reasons for risky investments and moral hazard. Germany and France prefer to pass modest laws on financial aspects, to avoid approving a tougher European binding regulation.

In September last year, Finance Watch published a report on the planned European banking union and the bank reform in the European Union, and concluded that “despite its intention, (it) will fail to prevent European citizens from bearing the losses of failed banks in the event of a systemic banking crisis unless there are meaningful structural and capital reforms to Europe’s largest banks.”

The banking union, which should start operations in November, is supposed to create a safety net to minimise the risk of further European Union taxpayer-funded bailouts.

The banking unions foresees a new European authority, the so-called Single Resolution Mechanism (SRM), with the power to wind up or restructure failing banks.

According to Finance Watch, “The SRM has the right objectives: namely to enable the orderly resolution of banks in participating member states, and to weaken the interdependencies between financial institutions and their sovereigns.”

But the watchdog group does not see “how these objectives can be met without reducing the regulatory incentives that favour sovereign debt, and without a structural reform of bank activities to make bail-in and bank resolution credible.”

According to International Monetary Fund (IMF) figures, in the aftermath of the global financial meltdown of 2008, industrialised countries bailed out private banks for 1.75 trillion dollars, some 1.3 trillion euros. This amounts to the one-year salary of more than 42 million people earning net average German wages of around 25,000 euro per year.

The global bank rescue weakened the European states involved, in particular Greece, Spain, Portugal and Ireland, and triggered, among others, the present sovereign debt crisis, with its social and human costs.

Another typical example of the lack of will among European governments to improve regulations and reduce risks in financial markets is the long and so far fruitless debate on the introduction of a very low tax on financial transactions, also known as the Tobin tax, after it was suggested by Nobel Laureate economist James Tobin in 1972.

In September 2011, the European Commission proposed the introduction of the tax within the 27 member states of the European Union by 2014. According to the original proposal, the tax would only impact financial transactions between financial institutions charging 0.1 percent against the exchange of shares and bonds and 0.01 percent across derivative contracts.

According to the initial Commission estimates, the tax could raise up to 57 billion euros per year. But, as of June 2014, that is, almost three years after the proposal, only 11 E.U. member countries appear ready to introduce the tax. Furthermore, there is wide disagreement among these 11 countries about which transactions should be taxed, and how high the levy should be.

Sven Giegold, German Green Party member of the Euro-Parliament and expert on international finance, even goes as far as saying that “France, nominally a strong supporter of the Tobin tax, actually did kill it.”

In May, during negotiations at the European Council, the French government opposed raising the Tobin tax on most financial derivatives and on government bonds. Giegold said that “France obviously fears that if taxed, banks wouldn’t buy government bonds.”

After such objections, Giegold complained, “the original tax on financial transactions has been devaluated to a useless levy to be paid only by small savers.”

A new scheme to avoid new rules for financial markets in Europe is to make them part of supra-regional binding projects, such as the Transatlantic Trade and Investment Partnership (TTIP), currently under negotiation between the European Union and the U.S. government.

According to Finance Watch, “there is no proven case for including financial services in the TTIP.” “We are concerned that the EU’s approach to regulatory cooperation (within the TTIP negotiations related to financial markets) will encourage convergence around the lowest common standards, not the highest,” Thierry Philipponnat, Finance Watch’s secretary, said during a recent hearing at the European Parliament.

For Philipponnat, “it is difficult to see how the inclusion of financial services in the European Union-U.S. free trade agreement negotiations, and especially the parts on regulatory cooperation, will not lead to a ‘race to the bottom’ in financial services regulation.”

'The Seven Deadly Sins and the Four Last Things'. Painting by Hieronymus Bosch, kept in the Museo del Prado, Madrid

By Roberto Savio
ROME, Jun 9 2014 (IPS)

It is a great pity that, beside opening the doors to ethics, social justice and peace, Pope Francis does not also give indications of updating  traditional theology. The most urgent task is to update the Seven Deadly Sins.

The update should be done on their social impact and viciousness. How it is possible to equate, for example, sloth and gluttony with greed? In the 1987 film Wall Street, Gordon Gekko, a wealthy, unscrupulous corporate raider played by Michael Douglas, says that greed, not gluttony, moves man. And it is very doubtful that all the people who are now moved by greed are also victims of gluttony, when they usually are on a diet!

Roberto Savio. Credit: IPS

According to the United Nations, throughout the world there are over 1.5 billion people who are obese or overweight compared with 842 million who suffer from undernourishment. The problem is that the obese or overweight are not usually the result of overfeeding but of junk food marketing by large corporations (McDonald’s and the like) – and the poor are the most overweight because junk food is cheap.

And sloth is certainly not a social threat, even if urban legend has it that people are poor because they do not want to work.

So, let us concentrate on greed, and see why it is time for an update.“We are rushing forward to the past, and the times of Queen Victoria, when an obscure German philosopher and economist by the name of Karl Marx was working … on his denunciation of exploitation, and preparing his Communist Manifesto”

We have reached a point where the preachers of ethics are central bankers. Speaking last week in London at the Conference on Inclusive Capitalism, Christine Lagarde, Managing Director of the International Monetary Fund (IMF), said that ”some prominent firms have even been mired in scandals that violate the most basic ethical norms.” And Bank of England Governor Mark Carney warned that “unbridled faith in financial markets” before the crisis, rising inequality and recent “demonstrations of corruption” has damaged “social capital”.

This must have gone down well in the country of understatement. According to Lagarde, the big banks are still being subsidised to the tune of 70 billion dollars in the United States and 300 billion dollars in the Eurozone. And in spite of this, regulators around the world have imposed 5.8 billion dollars in penalties for attempting to manipulate market benchmark rates.

Mark Carney solemnly told the London conference: “Ultimately … integrity can neither be bought nor regulated. Even with the best possible framework of codes, principles, compensation schemes and market discipline, financiers must constantly challenge themselves to the standards they uphold.”

And this is exactly the problem. James Dimon, the head of JP Morgan, the world’s largest bank, and with a 74 percent raise in salary for 2013, considers regulations “un-American”. In 2013, the bank paid 18.6 billion dollars in fines. The U.S. Attorney General, Eric Holder, has just slapped a 2.6 billion dollar fine on Credit Suisse for helping U.S. citizens to evade taxes. In December 2013, the European Commission levied fines totalling 1.04 billion euros (1.42 billion dollars) on Barclays, Deutsche Bank, RBS and Société Générale for having manipulated the Euribor benchmark interest rate. Are we therefore to think that this is “un-European”?

It is worth noting that, in this orgy of fines, none of those bankers responsible ever went to jail. They just received salary increase, as the case of James Dimon shows. Banks are inanimate objects, they cannot go to jail. The U.S. Justice Department has gone to great lengths to guarantee that banks will not be treated like criminals because banks cannot be put out of business. These are “the standards they uphold”.

A new contribution to theology has been revealed in Stress Test: Reflections on Financial Crises, a recently published book by Timothy Geithner, President of the Federal Reserve Bank of New York, and U.S. Treasury Secretary during the 2007-2009 crisis. Writing in the Financial Times of May 28, Martin Wolf says: “Mr. Geithner argues not only that crises are sure to recur but that governments must react with overwhelming force … the government must borrow more, spend more and expose taxpayers to more short-term risk – ‘even if it seems to reward incompetence and venality, even if it fuels perceptions of an out-of-control, money-spewing, bailout-crazed big government’.”

But Geithner “also offers a law of unintended consequences. The safer the visible financial system is made, he argues, the greater the danger that the fragility will emerge somewhere less visible, but possibly even more dangerous.” So the new theology of the financial system is that because it is impossible to make it safe, let us not introduce regulations which, Geithner says, “often be self-defeating.”

Yet, until 1999, when then U.S. President Bill Clinton (culminating a process started by Ronald Reagan) repealed the Glass-Steagall Act which had separated commercial and investment banking for seven decades, we had nothing of what we see today.

Deposit banks were obliged to use citizens’ funds under tight regulations, and the money they raised through deposits was used to finance commercial and capital growth. Now, all the money goes into speculation, and as everybody knows, banks have little patience with small investors and citizens because returns are much smaller than from the various instruments of financial speculation. If anything goes wrong, states are obliged to bail the banks out.

Where does this logic lead? Obviously into taking many risks (the higher, the better return), taking home the highest possible salaries, and knowing that the collectivity is there to bail you out when needed. Clearly, this logic could not exist, if it was not as a shining daughter of greed.

It is a sign of the times that in her speech in London, Lagarde used the same language that Oxfam used at this year’s World Economic Forum in Davos. She reminded the audience that “the 85 richest people in the world, who could fit into a single London double-decker, control as much wealth as the poorest half of the global population– that is 3.5 billion people.”

Now, we know from French economist Thomas Piketty, author of the best-selling book Capital_in_the_Twenty-First_Century, that the growth of this concentration of capital is faster than that of general growth, which is a way to say that these 85 people will continue to suck money from the general market, and therefore the rich will become richer and the poor will become poorer.

In other words, what we are witnessing is a progressive reduction of the middle class, while we are rushing forward to the past, and the times of Queen Victoria, when an obscure German philosopher and economist by the name of Karl Marx was working in the British Library in London on his denunciation of exploitation, and preparing his Communist Manifesto.

This trend is happening everywhere, and at every level. The increase in sales of giant U.S. retailer Walmart fell from 5 percent in 2012 to just 1.6 percent last year. Under Walmart’s pay plan, pay increases would only take effect after growth of 2 percent. So what did its brilliant accountants come up with? They took into in consideration only certain items, making sure to come up with a figure of 2.02 percent growth, permitting William S. Simon, president and chief executive officer of Walmart U.S. to receive a salary increase of 1 million dollars, taking his total salary to 13 million dollars. Meanwhile, the average full-time Walmart employee makes 27,000 dollars a year.

Worse still is the case of restaurants chains, which are setting up a strong line of attack to U.S. President Barack Obama’s idea of raising minimum wages (just like they did in Germany). Ever heard of a chain called Chipotle Mexican Grill? Even if you have, the odds are that you did not know that last year, Steve Ellis, its co-chief executive officer, made 25.1 million dollars while the other co-chief executive officer, Montgomery Moran, made another 24.4 million dollars. As you can see, they make even more than James Dimon.

The average salary at one of Chipotle Mexican Grill’s 1,600 restaurants is 21,000 dollars. Therefore, one employee with this salary would have to work for more than a thousand years to equal one year of the co-chief executive officer’s salaries.

By the way, Mr. Ellis has received more than 145 million dollars in Chipotle stocks since 2011, and Mr. Moran at least 104.5 million.

Now, is it possible that it is the gluttony of Mr. Ellis and Mr. Moran that creates such a world of absurd inequalities? No, but greed certainly does.

Time to update the Seven Deadly Sins, Pope Francis … (END/COLUMNIST SERVICE)

Excerpt:

Women gather at a rally in Reykjavik to mark victory for their rights, but remain more vulnerable than men to the economic crisis. Credit: Lowana Veal/IPS.

By Lowana Veal
REYKJAVIK, Nov 17 2013 (IPS)

Women in Iceland have been more badly affected by the economic collapse in 2008 than their male counterparts, both in terms of physical and mental health, studies show.

In one study carried out this year on people interviewed both before and after the financial crash, unemployed women, female students and women not active in the labour market showed particularly high stress levels in the year following the crash, along with women nearing retirement age (67 in Iceland) and non-skilled women.

“Most research on people who have experienced economic setbacks has been directed at men, and yes, those who have studied both sexes have found that men are more affected than women. Our results of the effects of the economic collapse are unusual, i.e. the effect on mental health appears to be primarily on women,” Unnur Anna Valdimarsdottir from the Centre of Public Health Sciences (CPHS) at the University of Iceland tells IPS.“Stressful events have been shown to have, if anything, more effect on heart diseases of women than men, and it is possible that different stressors could be gender-specific."

“Women have been more affected by the economic collapse and subsequent recession in Iceland than has been publicized, or seen in other countries,” says Chris McClure, a PhD student at CPHS.

“Most research to date indicates men being affected the most. However, what has occurred in Iceland is unique and may be an indication of a number of factors, including the high psychological burden of Icelandic women to maintain the household, their employment, their relationships, and their families.”

McClure points out that so far very few media releases have highlighted the negative consequences of the collapse in Iceland. Instead, most have focused on the resilience of the population.

“Statements like these, during times of austerity measures, can cause negative effects on the population moving forward,” he says.

Vulnerable groups are more prone to stress, say the authors. For instance, women over 60 might have experienced greater job insecurity or the prospect of their pensions or life savings disappearing, as well as the uncertainty of finding work if they are made redundant.

With non-skilled workers, the prospect of being in an occupation in which they are easily disposable or lacking credentials to get another job could have led to increased stress.

Previously, research studies on the relationship between unemployment and psychological outcomes had generally focused on men, but in some of these the societies studied were those in which men were the typical breadwinners for the family.

This is not the case for Iceland. With one of the highest employment rates among the Organisation for Economic Cooperation and Development (OECD), a grouping of 30 wealthy countries, women in Iceland represent almost 80 percent of the workforce, almost the same as men (85 percent).

Financial and occupational losses during the weeks around the financial collapse represented a great threat to family security, and this may have affected women differently to men. The authors attribute this as one of the reasons for the difference.

But it is not just stress-related diseases that affect women more than men in Iceland. In the week that the banks fell, the number of women who visited the cardiac emergency department of the national university hospital, Landspitali, shot up by 40 percent, while the number of women who were diagnosed with heart-related diseases increased by 80 percent.

Valdimarsdottir is one of the people who have looked into this. “Stressful events have been shown to have, if anything, more effect on heart diseases of women than men, and it is possible that different stressors could be gender-specific,” she says.

“For instance, there is a stress-related condition called stress cardiomyopathy (broken heart syndrome) which is virtually only found in women. But this is non-fatal and usually lasts only a few days,” she points out.

She and her colleagues at CPHS are also looking at trends surrounding birth outcomes, as well as suicide attempts and more long-term health outcomes in both sexes which could conceivably be related to the crash.

The only men who were recorded with increased stress were those who were married or in the middle-income bracket. Women in the middle-income bracket also experienced increased stress, though not as much as young women. In both cases this could largely be due to the steep rise in mortgage payments that came straight after the bank crash.

McClure also says that in Iceland the prevalence of smoking is higher in women than men. “Our findings point to a strong link between smoking cessation and stress levels. Moreover, we found that women, compared to men, were much less likely to quit smoking following the collapse, which is linked to their stress levels.”

Figures from the Directorate of Health show that the number of abortions has risen since the bank crash. However, Hildur Bjork Sigbjornsdottir, who compiled the figures, told IPS that it is impossible for her to pinpoint the reasons for these, as often there is more than one reason for the decision. “Usually, though, it’s a combination of various social factors.”

Following last week’s approval of U.S. Senate bills that critics say would weaken a major financial reform law known as Dodd-Frank, watchdog groups here are cautioning that banks deemed “too big to fail” still pose a risk to U.S. and international economic security.

“Too big to fail” was a term associated with the 2008 Troubled Assets Relief Programme (TARP), which gave 700 billion dollars in taxpayer money to rescue large U.S.-based banks whose collapse could have had a devastating impact on global economic security.You’re not going to win this tinkering with the rules...You have to break up the banks.

At a panel discussion here in Washington on Wednesday, political leaders and regulators urged the break-up of big banks as the only viable solution to what they say is still a systemically dangerous concentration of power.

“You’re not going to win this tinkering with the rules,” Neil Barofsky, former special inspector general of TARP and author of a new book on the issue, “Bailout”, said at the headquarters of Public Citizen, a consumer rights advocacy group. “You have to go to the source of these corrupting influences … You have to break up the banks.”

The push against financial regulation flexed its muscle in Congress last week, as Senate bills watering down Title VII of Dodd-Frank, which deals with the especially risky derivatives markets, were approved. The bills now proceed to a floor vote.

That move has renewed a call from regulation proponents to curb the political power of financial institutions, which some say is possible only by ending too-big-to-fail.

Supporters of this move point to the central problem in the too-big-to-fail philosophy: that protecting banks from the consequences of their own actions shields them from accountability and, ultimately, can encourage risky behaviour.

“I think as long as [the too-big-to-fail mentality] exists, the administration of justice is severely undermined in this country,” said Brooksley Born, a former chairperson of the Commodity Futures Trading Commission (CFTC), a government regulator.

Born is known for pushing for increased regulation of the derivatives market, an especially risky slice of trading activity, during the 1990s, calling this market the “hippopotamus under the rug”. Her concerns were rebuffed at the time by Federal Reserve Chairman Alan Greenspan and, under pressure from the financial lobby, Congress eventually passed legislation prohibiting derivatives regulation.

A decade later, Born’s concerns were vindicated by events that played out in the 2008 collapse, which largely began in the derivatives market.

Regarding the extent to which too-big-to-fail shields banks from prosecution, Born cited comments made by U.S. Attorney General Eric Holder last month, especially his admission that “it does become difficult for us to prosecute [the banks] when we are hit with indications that if you do prosecute … it will have a negative impact on the national economy.”

She also revealed a less public example of the government protection she says she witnessed firsthand as a member of the Financial Crisis Inquiry Commission, an official task force appointed to investigate the causes of the 2008 financial crisis.

“The Financial Crisis Inquiry Commission was given a mandate to focus on causes of the financial crisis, but our statute also said that if we came across evidence of violations of U.S. law, it was our obligation to report those violations to the Justice Department,” she said.

“We made a number of such referrals … and I have not seen anything happen on those.”

That failure, she suggests, was just one symptom of a broader illness.

“I became convinced there was a philosophy in this administration of letting the banks earn their way out of the insolvency they were in,” she said, “that the banks had to be protected from the rule of law in order to preserve the financial system.”

Cognitive capture

For some, though, the prospect of breaking up the banks is both too abstract and too politically unviable to be discussed as a serious policy proposal.

Dennis Kelleher, CEO of Better Markets, a financial reform advocacy group, says that any move to break up the banks would come in one of two guises: either as a prohibition on banks dealing with more than a certain amount of gross domestic product, or government regulators using all the authority already vested in Dodd-Frank.

“The Federal Reserve could say banks with more than 50 billion dollars pose a significant threat to the financial stability, and they have to put up 50 percent of capital [in case of extreme losses],” Kelleher told IPS. “If they did that – which they have the power to do – that wouldn’t be ‘breaking up the banks’, but that would eliminate the too-big-to-fail threat.”

Under this approach, the key problem is ensuring that regulators are aggressive enough, and especially strong enough to counter Wall Street tropes that invoke the common citizen as the main victim of regulation.

“[Regulators] actually believe the spin that comes from Wall Street and its lobbyists,” Kelleher says, calling it “cognitive capture, reinforced by a culture that equates money with brains”.

Regulation proponents, though, seemed confident that shifting public opinion was becoming a formidable opposition to these entrenched interests, even if the time is not yet ripe for putting a hard cap on the size of major banks.

“If there is another major megabank blow-up, it could easily change the political dynamics,” Kelleher told IPS. “While these too-big-to-fail banks have political support … [that support] is broad but it’s not deep – it’s very fragile.”

Afghanistan’s Kabul Bank is back in the news, with the sentencing of two of its top executives to five years in prison for fraud. But being in the limelight – for good or bad – has been part of the bank’s saga since its inception in 2004.

Billed as “the bank for everyone”, the bank’s advertisements featured on international television channels showcased a lifestyle that few Afghans could resist. It evoked both trust and awe as its ads constantly showed images of houses, cars and even gold bars it purported to give away.

Suddenly, Afghans who had been distrustful of banks took money they had stored in their homes for decades and opened accounts at the financial institution. The aspirational promises quickly drew in more than one million depositors.

But by summer 2010, the rumblings of something amiss at the nation’s first private bank became too loud to ignore.

Indebted and embarrassed

On August 29, 2010, Abdul Qadir Fitrat, then head of Afghanistan’s Central Bank, convened a meeting of Kabul Bank’s shareholders to discuss what had brought an institution seen as an overwhelming success by Afghans and foreigners alike to the verge of collapse.

The bank has since been replaced by the New Kabul Bank, with the government investing more than 800 million dollars. But the fallout of the collapse of the first bank is still being felt.

Nearly three years later, a series of investigations detailed how massive off-book loans, lavish purchases and 114 rubber stamps used for fake companies helped contribute to the embezzlement of more than 900 million dollars from Kabul Bank.

The image of the “bank for everyone” was quickly replaced with one of “crony capitalism” forming a “Ponzi scheme” that affected nearly everyone in the Central Asian nation.

The scandal left Jawed Rassool, an operations manager at a construction company, broke and indebted. The 27-year-old said the media coverage of the corruption soon locked his employer out of access from its accounts. As a result, “I wasn’t paid for four months,” he told Al Jazeera.

“I am not a very wealthy man. I cannot afford not to have money to feed my family for one month, and never four months … I borrowed 7,000 afghanis (136 dollars) to pay for electricity, firewood and other expenses.”

While the bank’s CEO was reported to have gone on shopping sprees at Louis Vuitton and Versace with money from the bank, Rassool languished.

A November 2012 report, published by the Independent Joint Anti-corruption Monitoring and Evaluation Committee (MEC), found that 92 percent of the bank’s loans, or 861 million dollars, were extended to just 19 individuals and businesses.

Seema Ghani, executive director of the MEC, said that along with a loss of faith in the banking industry, the Kabul Bank scandal left many people without essential services.

“Kabul Bank was a trusted institution that millions of Afghans relied on to receive their salaries and secure their savings … The fact that the government stepped in with an 825 million dollar infusion of funds has simply meant the cost of the fraud has been dispersed to all Afghans,” Ghani told Al Jazeera.

Sophisticated smuggling

In interviews with Al Jazeera, researchers, bank officials and journalists said a combination of low capacity, lack of due diligence and political influence allowed the Kabul Bank to perpetrate its fraudulent activities for more than five years.

Kabul Bank also had timing on its side: an influx of international aid, expanded public services and new entrepreneurial businesses after the fall of the Taliban all increased the need for banking services.

This growth in demand for financial services “drastically outstripped the capacity to effectively regulate and supervise the industry, resulting in vulnerabilities that were (further) exploited by participants in the Kabul Bank fraud,” said Ghani.

“The scale and level of sophistication of the scheme in Kabul Bank was quite astonishing,” Martine van Bijlert, co-director of the Afghanistan Analyst Network, told Al Jazeera.

This sophistication included innovative plots to smuggle 861 million dollars into banks in 28 countries. The 2012 report by the MEC cited the use of 10 pilots at Pamir Airways, which the bank had a stake in, who were paid annual salaries of over 300,000 dollars to transport money through the airline’s food trays. These costs, dated from March 2008 to November 2010, were categorised as “pilots of cash delivery”.

A further 66.2 million dollars was used for the purchase of 250 cars and motorcycles, false deposits, and payments to employees either unqualified for their positions or who simply did not work for the bank.

And a 2009 report by the Afghan spy agency found that Kabul Bank funds were being used to build a property portfolio in Dubai whose value was estimated at 151 million dollars.

These details depicted what van Bijlert called “a group of people who found it completely normal that their connections and wealth would earn them (no interest) loans or gifts.” Among those accused of receiving loans are the brothers of Afghan President Hamid Karzai and First Vice President Marshal Fahim.

Protecting itself

Tuesday’s sentencing of Sher Khan Farnoud, the bank’s founder and chairman, and Khalilullah Ferozi, chief executive of the bank, has done little to restore faith in what people see as a corrupt system.

Shamsul Rahman Shams, head of the special tribunal investigating the bank, said Karzai’s and Fahim’s brothers still owe nine million and three million dollars, respectively.

Neither Mahmoud Karzai – the bank’s third-largest shareholder – nor Hassin Fahim has been formally charged with wrongdoing.

“It’s not as simple as the president and vice president protecting their brothers. It’s the system protecting itself,” said van Bijlert.

Nor are they the only ones allegedly involved. Kabul Bank reportedly made contributions to between 30 and 40 members of parliament. “Many people are somehow implicated,” said van Bijlert.

The response to the scandal has been plagued by delayed or inadequate investigations, and reluctance to pursue the routes that money took out of the country and to prosecute those responsible.

This, says van Bijlert, illustrates how the entire process has become “an exercise in containment,” to limit the blame to a carefully chosen group.

This highlights a perception among the general population that the perpetrators and beneficiaries of the Kabul Bank fraud have not been properly investigated and that decisions to indict were not made transparently – a view the MEC shares.

With the bank’s bailout, funded by international donors, amounting to nearly six percent of the nation’s GDP, Dawood Azami, an Afghan Young Global Leader at the World Economic Forum, said “the Kabul Bank crisis should be a big enough shock for the whole governance structure in Afghanistan to wake up and respond to challenges on time.”

But Noorullah Delawari, governor of the Afghan Central Bank, said Kabul Bank is not an entirely unique situation. “The whole world is facing massive banking issues and each country has had difficulty dealing with it.”

Though he agrees with the findings of an audit prepared by the Kroll investigative firm that the bank was “a well-concealed Ponzi scheme,” Delawari says Da Afghanistan Bank is working with a receivership to recover as much of the lost funds as possible.

In an interview with Al Jazeera, Delawari said that within the “next few weeks” the total amount recovered by the receivership would total 225 million dollars, which he cites as a major improvement over his predecessor, Abdul Qadir Fitrat, who fled to the United States in June 2010, saying the investigation was putting his life in danger.

“Only 20 million dollars had been recovered when I came on board” in November 2011, Delawari said.

Still, the sting of the scandal continues to reverberate in Afghanistan and abroad. “Although the public and investors got their money back after it was seized by the authorities, many people think twice before depositing their money in the banks,” said Azami.

For Ahmad Barak, the initial corruption and the mishandling of the subsequent investigation into Kabul Bank are indicative of an unchanging fact of life in modern Afghanistan.

“This is Afghanistan. You are an idiot if you do not steal money.”

* Published under an agreement with Al Jazeera.

The world’s nuclear weapons industry is being funded – and kept alive – by more than 300 banks, pension funds, insurance companies and asset managers in 30 countries, according to a new study.

And these institutions have substantial investments in nuclear arms producers.

Released by the International Campaign to Abolish Nuclear Weapons (ICAN), the 180-page study says that nuclear-armed nations spend over 100 billion dollars each year assembling new warheads, modernising old ones, and building ballistic missiles, bombers and submarines to launch them.

Much of this work, the report points out, is carried out by corporations such as BAE Systems and Babcock International in the UK, Lockheed Martin and Northrop Grumman in the United States, Thales and Safran in France, and Larsen & Toubro in India.

“Financial institutions invest in these companies by providing loans and purchasing shares and bonds,” says the report, described as the first of its kind.

Titled “Don’t Bank on the Bomb: The Global Financing of Nuclear Weapons Producers”, the study provides details of financial transactions with 20 companies heavily involved in the manufacture, maintenance and modernisation of U.S., British, French and Indian nuclear forces.

A coordinated global campaign for nuclear weapons divestment is urgently needed, it says.

Such a movement could help put a halt to modernisation programmes, strengthen the international norm against nuclear weapons, and build momentum towards negotiations on a universal nuclear weapons ban, it adds.

“Divestment from nuclear weapons companies is an effective way for the corporate world to advance the goal of nuclear abolition.”

The study appeals to financial institutions to stop investing in the nuclear arms industry.

“Any use of nuclear weapons would violate international law and have catastrophic humanitarian consequences. By investing in nuclear weapons producers, financial institutions are in effect facilitating the build-up of nuclear forces,” it says.

In a foreword to the report, Nobel Peace Prize winner Desmond Tutu
Writes, “No one should be profiting from this terrible industry of death, which threatens us all.”

The South African peace activist has urged financial institutions to do the right thing and assist, rather than impede, efforts to eliminate the threat of radioactive incineration, pointing out that divestment was a vital part of the successful campaign to end apartheid in South Africa.

The same tactic can – and must – be employed to challenge man’s most evil creation: the nuclear bomb, he added.

Tim Wright, ICAN campaign director and co-author of the report, told IPS some of the financial institutions identified in the study “have already indicated to us they intend to adopt policies proscribing investments in nuclear arms makers”.

Asked how confident he was of the success of the divestment campaign, Wright said, “Our divestment campaign will probably be most successful in places where opposition to nuclear weapons is strongest, for example, Japan and Scandinavia.”

He said more and more banks are coming to accept that some kind of ethical criteria should be applied to investment decisions, and manufacturing weapons capable of destroying entire cities in an instant is clearly unethical.

Of the 322 financial institutions identified in the report, about half are based in the United States and a third in Europe.

The study also singles out Asian, Australian and Middle Eastern institutions.

However, the institutions most heavily involved in financing nuclear arms makers include Bank of America, BlackRock and JP Morgan Chase in the United States; BNP Paribas in France; Allianz and Deutsche Bank in Germany; Mistubishi UJF Financial in Japan; BBVA and Banco Santander in Spain; Credit Suisse and UBS in Switzerland; and Barclays, HSBC, Lloyds and Royal Bank of Scotland in Britain.

The report emphasises the humanitarian, legal and environmental arguments for divestment, noting the unique destructive potential of nuclear weapons.

Asked if it would be feasible to launch a global campaign to boycott these financial institutions, Wright told IPS, “If banks refuse to divest, customers should seek ethical alternatives.”

There is no shortage of banks, particularly smaller banks, that refuse to have anything to do this this industry, he noted. “If people begin to leave en masse, this will send a powerful signal to the bank that its support for nuclear weapons companies is unacceptable.”

For multinational banks, he said, a coordinated boycott campaign in several countries could be effective.

The study also quotes Setsuko Thurlow, a survivor of the U.S. atomic bombing of Hiroshima in 1945, who points out that anyone with a bank account or pension fund has the power to choose to invest his or her money ethically in a way that does not contribute to this Earth-endangering enterprise.

In addition to stating the ethical case for divestment, the report also warns of the reputational risks associated with financing nuclear arms, and highlights the positive role that financial institutions could play in the quest for a world free from such weapons.

Demonstrators in nearly two dozen cities in Spain raised their voices Friday to protest against the use of public funds to bail out banks while the budgets for basic services like education and health are being slashed.

In the southern city of Málaga, dozens of people chanting “We aren’t paying for this crisis” and “The bank always wins, and I don’t like that” marched through streets downtown in a festive mood and entered a bank to try to cash symbolic checks, saying they were facing “a shortage of funds after the government’s cutbacks,” which especially hurt middle and lower-income sectors.

The simultaneous nationwide protests against the bank bailout were organised over the on-line social networks by Democracia Real Ya (DRY) – Real Democracy Now – a platform that sparked the May 15 movement (15-M).

The demonstration “aims to highlight, by peaceful action in many banks around our country, the enormous responsibility of financial bodies for the difficult situation we are in,” Fabio Gándara, a DRY spokesman in Madrid, told IPS.

“We criticise the use of public money to rescue mostly private banks,” Santiago R., a DRY spokesman in Málaga who preferred not to give his last name, told IPS.

The DRY manifesto complains that on the one hand, for the sake of the stability of the financial system, taxpayers are being asked to rescue institutions ruined by ineffective management, while on the other they are being forced to bear the loss of public services.

“There is not even money for heating in public institutes in Valencia, yet millions of euros are being injected into the banks,” said R.

This week, thousands of students, parents and teachers, supported by trade unions and political parties, took to the streets in many Spanish cities to protest the cuts in education and condemn the Monday Feb. 20 brutal police crackdown on a group of students during a peaceful rally in Valencia, in the southeast of the country.

“The situation borders on madness. There is a lack of common sense,” said the Málaga DRY spokesman, in whose view public money should be used to improve the lives of all citizens.

The manifesto calls for an immediate stop to bank bailouts using public money, as well as the clarification of all economic or criminal liabilities arising from poor management of the rescued institutions.

Since the real estate bubble burst in 2008, banks in Spain have been weakened by the numerous outstanding loans at risk of not being repaid and a stock of embargoed real estate.

According to the European Commission, Spain spent around eight percent of its GDP between 2008 and 2011 on helping over a dozen banks in difficulties, and nationalised others only to resell them to the private sector.

The protestors argue that the people who led the banks into this situation are the same ones who financed housing at inflated values, and took unjustifiable risks in order to continue making profits. They are the ones who should answer for the losses due to their mismanagement, not the citizens who are bearing the cost of the rescue actions, they say.

“No one comes to the rescue of ordinary citizens overwhelmed by the crisis and unable to meet their monthly mortgage payments. They simply lose the basic right to housing, recognised in the constitution, and are pursued even after having lost their home,” says the DRY manifesto titled “Yo pago, tú pagas y a los bancos los rescatan” (roughly, I Pay, You Pay, and the Banks Get Rescued).

Spanish Economy Minister Luis de Guindos said Wednesday Feb. 22 that the government will propose measures to alleviate the problem of evictions, with a non-binding “code of practice” for banks that would include the possibility of postponing for two years evictions of persons below a certain “social exclusion threshold”.

United Left lawmaker for Málaga Alberto Garzón described the Feb. 24 (24-F) protests as “very fitting, and many political actors should join them with a view to transforming the system.”

Garzón, a 26-year-old economist who has been active in the 15-M movement since its inception, told IPS he was in favour of recovering “a democratically managed public banking system.”

“We must help families, not banks,” he said Feb. 16, speaking in parliament in the presence of minister de Guindos.

Jordi Calvo, an economist and researcher on social movements and the arms race, told IPS that public intervention in all the banks facing problems “is necessary,” but said “this aid cannot be given in return for nothing.”

“If a bank receives public money, it should become public property and be managed for the general interest,” he said.

Calvo suggested that “aid should also be given to small cooperatives facing liquidity problems, but when they are in trouble they are not treated the same way as the big banks.”

The financial reforms approved Feb. 3 by the government of centre-right Prime Minister Mariano Rajoy slashed the salaries of the executives of the banks that received bailout funds or were taken over by the government.

A decree-law for restructuring Spain’s financial sector requires banks to increase their risk coverage by 52 billion euros, in order to insure against their exposure to toxic assets linked to the real estate bubble.

De Guindos said this money must come from this year’s profits, derived from the sale of the assets, because “not a single euro of public money will be used for this restructuring.”

“The banking sector has behaved in an irresponsible and criminal fashion, bringing about its own ruin,” DRY’s Gándara told IPS, referring to “the macabre paradoxical presumption that those guilty of creating the crisis should be rescued with public money while ordinary citizens have to bear the cost of the crisis.”

Two months into the centre-right People’s Party government, amid the severe economic crisis shaking the European Union, Rajoy has announced a wave of labour, financial, educational and legislative reforms, and plans to present the general budget Mar. 30.