Bankers are not exactly popular these days. The global economy is only just recovering from the financial crisis of 2007-8, and citizens (understandably) greatly resent having had to bail out the banking sector with public money. Even more than that, they resent immediately afterwards having had to endure a long period of austerity and public sector budget cuts.

In the wake of the Brexit, some economists warn we are now heading for another European banking crisis. Deutsche Bank’s chief economist recently urged the EU to put aside 150 billion euros for a new round of bailouts. In particular, market pressure has been building on Italy to offer assistance to its banks (leading to grumbling from the German finance minister).

It’s safe to say that public trust in the global financial system is pretty low. We had a comment sent in from Nikolai, who doesn’t think there’s much that can be done about it. He argues that the 2008 financial crisis, and subsequent public bailout of the banking sector, has irrevocably damaged public trust. To him, it feels like the financial sector works for the elites while hurting ordinary people.

To get a response we spoke to Joris Luyendijk, a Dutch writer and correspondent, who is well-known for the Banking Blog he kept on the website of The Guardian newspaper. What would he say to Nikolai?

LuyendijkWell, I would say it’s a really good thing that trust has collapsed, because there really is no reason for trust in the current financial system because bankers are still rewarded for taking risks but they face no penalties or liability when these risks go wrong. So, I think to rebuild trust would mean to rebuild the financial sector in such a way that it begins to act responsibly, and then trust will appear magically – after a couple of years of decent behaviour on the part of the banks.

We also had a comment sent in from Catalin, who pointed out that Iceland was the only nation in the world that sent its top financial executives to jail. She believes that other countries should have followed their example (and this was a very popular suggestion among our readers). What would Joris Luyendijk say?

LuyendijkIt’s very difficult, because most of the top bankers didn’t break the law. So, to send people to jail simply because the outcome of their actions was so negative would be a really dangerous precedent. I think what we should have done is: Where bankers broke the law, send people to jail, as in Iceland. But, more importantly, top bankers should be held personally liable. So, if they cause damage to the tune of, say, 10 billion euros, then they should be fined collectively 10 billion euros, so that they know that if they wreck their bank, nobody will pay a higher price than the bankers themselves.

Finally, we had a comment sent in from Rui, who argued that the global financial architecture designed in the late 1970s and early 1980s had completely failed, and needed to be redesigned from the ground-up. Did Joris Luyendijk agree? Or would he advocate more moderate reforms?

LuyendijkI would think that you need on the deepest level a fundamental redesign, and it needs to start with the science of economics. So, right now, if you increase productivity in an economy – meaning you create more so the pie is bigger – we call it “Growth”. But if you create lots of money out of thin air and you pump it into assets, you create bubbles, and then people start spending on consumption on the basis of that bubble, that is also called “Growth”. And so both making the pie bigger and eating the pie faster comes under the same concept: “Growth”. And I think that’s where we need a really big rethink and change. So, “Growth” should only mean the increase in the actual productivity of an economy.

What will it take to restore faith in the global economic system? Should more countries have followed Iceland’s example, and sent their top bank executive to jail? Or should the management of collapsed banks have been made financially liable for the damage to the economy? Let us know your thoughts and comments in the form below, and we’ll take them to policymakers and experts for their reactions!

IMAGE CREDITS: CC / Flickr – Eden, Janine and Jim

83 comments Post a commentcomment

What do YOU think?

  1. avatar
    Tarquin Farquhar

    Jail the “cogs” and the “orchestrators” of corporate greed.

    Jail the bureaucrats that “smoothed” the way for corporate greed.

    Jail the politicians that did as their corporate greedy masters wanted.

    Jail the ex-politicians that join finance companies after having pedalled their greed as EU doctrine for too many years.

  2. avatar
    Giorgos Christeas

    Δε Δε De De Leveraging!!……This is Private dept(1000%-40,000%!!!…..) as Exposure to Derivative Products / Total Assets!!……Easy!

  3. avatar
    Christos Mouzeviris

    It can’t be done… To have faith it needs justice for everyone on this planet… And this system has been designed to reinforce and protect the status quo… Some elite people in elite nations remain rich, while other nations and their people are less fortunate… How can you have faith in this system? Unless of course you live in one of those elite nations and you rather comfortable financially…

  4. avatar
    Monique Taxhet

    Well Christ is this has always been the case. Even communism has failed in sharing wealth, there were also rich and poor people, even worse, there was no freedom. Humans cannot be changed, everyone wants more and more and no one really cares about the rest..only pretending, until such time the money runs out and then they will do what needs to be done to get it all back…sad but don’t know how to change it. Everyone who has tried so far has failed.

  5. avatar
    George Diplas

    Μονο η Wall street? Η σφηκοφωλια των Βρυξελλων? Ο ΜΠΑΡΟΖΟ μετα την πολιτικη!!!! θητεια προσεληφθη απο την…GOLDMAN SACHS!!!! Αμ πως.

  6. avatar
    John Hillbery

    It needs Truth. Honesty Justice Equity.Good management, sound lending policies and a deep knowledge of Humanity before anyone should call them selves qualified to be a banker.Insolvent Banks should be allowed to fail. Corrupt bankers who lend to their friends with no intention of repaying the loan should be fined and jailed.All that would help.

  7. avatar
    Bianka Pavšič

    Very easy…closing bank accounts and do the homework to find better one….as long as it takes…andthus can do every single individual…about 5 bilion precissely…until banks understand that even small humans can burn them down. But this is far away from “comfort zone” so unreachable.

  8. avatar
    Alain Rak

    Not very new. Most of the European banks have not enough assets. Old story. Most of the biggest, French,German and Italian banks are not far from bankruptcy.

  9. avatar
    Alain Rak

    En français dans le texte, vieille histoire la majorité des banques françaises, allemandes et iitalienes sont
    sous-capitalisées et ne gagnent plus assez d’argent car les intérêts sont pratiquement négatifs. La dispersion de la BNP Paribas qui veut posséder toute l’Europe en fait une des banques la moins “sécure” du monde sauf véritable capitalisation?

  10. avatar
    Rafael Miralles Ferrández

    I don´t want to belong to an “organization” in which the ANGLOGERMANS are the owners and the rest of Europe (Russia included) are nothjng but their slaves.

  11. avatar
    Ιωάννης Ράπος

    Τι θα χρειαστεί να αποκατασταθεί η πίστη στο παγκόσμιο χρηματοπιστωτικό σύστημα; Να έχει όλος ο κόσμος δουλειά με εισόδημα που να τον επιτρέπει να ζει αξιοπρεπώς και με ασφάλεια./What will it take to restore faith in thw G.F.S.? To have everyone job with an incoming to allow him to live with decency and with financial security.

  12. avatar
    João de Oliveira

    To restore the faith (should no be faith, but TRUST!! ), THE problem called Deutsch Bank and its 20x Germany’s GDP in derivatives potentially toxic, needs to be resolved… IMF recently published a report in which calls the world attention for the “biggest threat to world’s financial system”… And what does the German Finance ministry ? Ignores the issue, avoid responding to questions about… And highlights that Portugal should get penalised because their deficit were 0,2% above the 3% threshold !!! WTF???

  13. avatar
    Mário Bruno Brandão Cruz

    What is the point of putting too much pressure in weak countries like mine? If you lived here you would see and feel the suffering this pressure is bringing to our people. :(

  14. avatar
    EU reform- proactive

    The final royal flush- to end the happy, deregulated- merry go round- at our costs!

    Overseen by the ghost of the Rothschild’s, protected by the might of the banking institutions- in cahoots with their political institutional partners (Bilderbergers)- both too big to fail. Therefore too big & dangerous to exist! An invincible, unbelievable con? What have we got?

    The “Basel series” of voluntary regulations:

    Banking reputation remains in mafia territory- despite………:

    The European Banking Authority’s (EBA) aims to supervise itself through a “single rule book”.

    The EC develops directives & enforcement policies for its 28 members- to keep themselves busy & fake moral leadership:

    In the meantime, the next big trigger to collapse the over stressed system is not another EU EXIT, but a probable Banking collapse lead by Deutsche Bank. The “casino royal”- gambles its last royal flush! Beware!

  15. avatar

    Joris’ book Swimming with Sharks is an excellent read. In it he shows very clearly how perverse incentives within the system mean that people can make huge rewards from acting in their own short term interests regardless of the consequences for society. As he argues, the system needs to be reformed to remove these perverse incentives. But I also think we need to undestand how attractive the financial system is to people with certain disorders, namely narcissists and psychopaths, who thrive in such an environment. If we understand this we will be in a better position to reform the system to guard against their destructive influence. My blog post on this is here

  16. avatar
    Maurizio Flores Felis

    Breaking down big banks, creating more cooperative banks, putting a limit in interest rates bringing them back to 1 and a maximum of 3%, creating more and more cooperatives lesser corporations and stock markets…..

  17. avatar
    Kyriakos Papadopulos

    The nature of the global financial system is running with “imaginary” money creating debts and fake obligations. Debate about creating faith on this?

  18. avatar

    There is only one way to gain Trust in any system.
    Transparency and simple rules applied to everyone.
    This has never been the case in our societies.

  19. avatar
    Maia Alexandrova

    Adopting stricter rules that will take the banking system back to basics – keeping people’s money safe, not playing games with it. For example, obtaining individual permission from every customer on whether they are happy for the bank to use their money for investment, lending and other business, or not. On this basis accounts can be simplified to just two types – non-secure and secure. The bank pays to customers with non-secure accounts to cover the risks it takes by using their money, and in turn is paid a small fee by clients opting for secure accounts – only for safe keeping of funds, but with no permission for the bank to use the money in any way. Responsible attitude and behaviour will gradually regain people’s trust.

    It is also essential to regulate the salaries of bankers. For example, they should only get a certain percentage of the profit as a salary, not a fixed amount plus fixed bonus. In this way they will personally feel in their pockets the losses from taking any irresponsible actions and the pressure to remedy the mistakes, well in time before the bank is in trouble. There should be a connection between the performance of the bank and the salaries of staff and their bosses. Otherwise, greed and gambling will continue to rule this sector.

  20. avatar

    Regulations and/or nationalizations. It’s not about “restoring” anything, banks are not harmless institutions.

  21. avatar
    Jeroen Matthee Jay

    They only way forward is to give back to the people what was stolen from them.
    Instead of pumping money to the corporations who just spent it on CEO bonuses.

    In our economy we must create win win situations.

    With all the automation people are freed from dirty jobs, these companies should pay higher tax.

    A basic income can then easily be provided and take care of everyones basic survival needs.

    In europe we should bring all countries to the same levels of equality, to unify the EU as one nation with many cultures.
    Unification is good with the right intentions behind serve the greatest good of all.

  22. avatar
    Stefanie Müller

    Please register for free on to find your dreamjob.. not answering to job ads, but getting discovered by interesting companies..

  23. avatar
    Ivan Burrows


    The global economy is recovering, the Eurozone isn’t and is the main threat to that recovery.

  24. avatar
    Ainhoa Lizar

    The global financial system is the problem and it should not be restored or even exist. Globalisation is a failure. Globalist bankers, multinational owners and corrupt politicians, lobbies and co. should go to jail and every country and nation should try to restore their economy and create a fair and honest trading agreement between each other.

  25. avatar
    Mj Jansen

    What a stupid question! The (global) bank system is the problem. Reforming is not possible as long we accept wall Street and the corporations as we know it.

  26. avatar
    Yordan Vasilev

    The global financial system needs of new rules, laws and regulations, which will inspire respect and justice. Despite of that, the guilty ones for the crisis must be sentenced and gone on jail.

  27. avatar
    Michael Šimková

    Fundamentally it needs to make people richer rather than poorer, purchasing power needs to go up rather than down, increased productivity needs to translate to increased prosperity rather than an increased stratification resembling feudalism.

    Furthermore, and aside from that, people should be made economically literate at least on a basic level. Most people do not even understand that a loan is not free money, do not understand what mortgages are beyond “something they have to pay every month” but are still granted mortgages anyway, they do not know that their deposits are mostly loaned to others and not simply locked in a vault like in Spaghetti Westerns, and do not understand that the money banks lend out, for better or worse, is the same money they deposit into the banks as savings and not some secret stash of ill-gotten profits from general evil-doing, such that a bankrupt bank means all of the clients of that bank are bankrupt.

    In some sense this ignorance has actually protected banks in the financial crisis from a run on the banks. People are so ignorant of the nature of finance today, even of the services they themselves use, that they do not understand that if a bank busts and the government underwriting the bank busts, the money they have deposited into that bank cannot simply be conjured up. They are more ignorant than bank users were in the Depression when rumours of insolvency and bad loans caused runs because savers mostly understood that the money banks lend is the same as the money bank customers deposit.

    In the long run this ignorance, like ignorance in general, is very bad. It creates a cauldron for recklessness and political demagoguery. For example, people support allowing banks to fail (rather than simply forcing bad bank managers to pay for their negligence by being personally liable for a bankrupt bank’s losses, which I do support) without understanding the ramifications that.

    People looking to open deposits and to take out loans and mortgages should be mandated to complete Finance 101 courses to ensure that have a basic understanding of what they are doing, because private banks have a perverse incentive to hook in ignorant clients and sell them far riskier financial products than they would be inclined to accept if they weren’t so damned ignorant about everything that they sign off on.

  28. avatar
    eusebio manuel vestias pecurto vestias

    CETA/TTIP the good news is that European workers want to join the middle class in are European places hand have an opportunity I want trade agreements that push standarts and there is no reason to do so

  29. avatar
    Giorgos Beitis

    A new one based on social principles and not concentration of wealth to the hunds of the few

  30. avatar
    George Titkov

    Return to the gold standard and make the banks lend only what they’ve got as deposits, not 10 times more. In other words, stop creating money out of thin air.

  31. avatar
    Julia Hadjikyriacou

    Islamic banking is interest-free and still makes a profit. I would suggest interest-free loans for the people and charging interest on corporation loans that currently pay 0% interest. Also QE for the people and public services and infrastructure instead of for the banks. And stop bailing banks out with innocent peoples money.

    • avatar
      Ishar Wyrm

      Maybe it won’t truly fix the problem, but I’m certain it will help to ease the problems it is creating, as byrpoduct of savage de-regularization

  32. avatar
    Andre Lopes

    No faith… just waiting to the completed collapse. Then I will see who is right, who was wrong decades ago….. u are good creating problems, zero resolving them

  33. avatar
    Ivan Burrows


    The global financial system is fine, its the Eurozone that is the problem.

    It looks like Greece will be kicked out first followed by Italy.

  34. avatar
    Vassiliki Xifteri

    It is hard to restore faith to a system that was proved both ineffective and unfair. The reporter says that “I would think that you need on the deepest level a fundamental redesign, and it needs to start with the science of economics”. How can you think of any financial system to be reliable if it does not have human values behind it? We do not accumulate wealth so that few live well. The moment we understand we are all one biiig human family and that Earth has amazing opportunities for all, it is the moment faith to the global financial system will be restored. Before the crisis, people could not understand it. I am not so sure we understand it now either. Iceland had fairness and happiness high on its value system. I just wish more follow its example.

  35. avatar
    Vasiliki Xifteri

    It is hard to restore faith to a system that was proved both ineffective and unfair. The reporter says that “I would think that you need on the deepest level a fundamental redesign, and it needs to start with the science of economics”. How can you think of any financial system to be reliable if it does not have human values behind it? We do not accumulate wealth so that few live well. The moment we understand we are all one biiig human family and that Earth has amazing opportunities for all, it is the moment faith to the global financial system will be restored. Before the crisis, people could not understand it. I am not so sure we understand it now either. Iceland had fairness and happiness high on its value system. I just wish more follow its example

  36. avatar
    Bobi Dochev

    Can you have trust to criminals?.. I don’t think so.
    If you steal once you’ll steal twice!

  37. avatar
    Nicola Piazzalunga

    On one side, you need to have a more educated consumer base, on the other, you need to have more transparent and fair communication.

  38. avatar
    andre l

    Why faith in Global Financial system? It’s not a matter of belief, it’s a matter of doing the things right in good practices, things that LACKS A LOT in the Global Financial system. Actually the Global Financial system it’s just a virtual illusion, bit and bytes that judge entire countries over a few bunch of fellow in this damn world. No moral, no fair play, where are the legal aspects of all this economic treats? CETA and TTIP it is your response?? Can I sue coca cola personally? NO? Why do I want this, “sorta” treat??????? If coca cola for instance can sue my country for whatever they want, like we are forcing more tax for drinks with tons of sugar….. “this is not good for business” I know the “pain”. I know the consequence.

  39. avatar
    Nando Aidos

    Put the financial system back where it belongs – as a facilitator, as a tool, for people to realize their other life dreams. Nothing else!

  40. avatar
    Jan-Marten Spit

    We might start with not calling the massive liars lone fraud of 2001-2007, a “crisis”. We don’t describe events by their effects. We describe events by their nature, their root cause.

    If somebody breaks into your house and steals your wallet, that is not called a financial crisis, even though that may be the effect. We call that burglary. If someone is driven of his bike into a wheelchair by a drunk in car, we don’t call that a mobility crisis, even though that is the effect. We call that assault.

    The liars loan fraud of 2001-2007 comprised the design of mortgages specifically issued to people that could not pay them, a designed interest scheme that starts with low interests only to raise to very high levels later, forcing real estate appraisers to overvalue the property so that the mortgage could be made bigger (a lender that seeks to overvalue the collateral is evidently engaging in liar-loan fraud, and that is why real-estate appraisers alerted the FBI as early as 2003) which gives the malicious lender the ability to sell it of their books before it explodes on somebody else’s account. Join in a few criminal rating agencies stamping triple A on something they have not verified and the liars loan fraud is complete.

    Any activity that misleads clients into yielding value is fraud, and fraud is illegal, even in the US.

    This fraud has cost Europe two trillion in already earned wealth. None have been convicted despite it being the largest financial crime in the history of mankind. None of the banks have been shut down as criminal organisations, even though they are. None of the rating agencies have been shut down or denied the right to operate in the EU. In fact, a drive to create a European rating agency in their stead has simply been abandoned. By you.

    It is a certainty this is going to happen again. In fact, it already is happening again. Should we blame banksters for being banksters or should we blame the millions of victims simply letting them – despite having the means to not only punish the criminals, but to strip them of any illicit wealth as well.

    The only thing we have to do is to become what we proclaim to be. Democracies. The rule of law. Instead the less powerful EU countries were victimized because stronger EU countries would rather pass on the consequences of crime than to face the criminals. It was EU darkest hour, and a clear sign of weakness to the United States that the EU is a herd of cows ready to be milked again.

    The complacency of my fellow Europeans is a bigger threat to my freedom and sovereignty than banks are.

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