The July 7 column for Glass-Steagall in the London Telegraph by Prosperity Capital Management chief economist Liam Halligan, was notable for giving a strategic account of the turning point in history now arrived. Halligan also, like Lyndon LaRouche, makes clear that the Glass-Steagall policy will take away a lot of power — and a large amount of “big money” — from bankers on Wall Street and in the City of London.
Entitled, “Liborgate could trigger crucial banking reform,” Halligan’s long column calls for mobilization for a new policy. “Finally, the British political classes are starting to get it. Finally, a head of steam is building. Over the past week, calls to impose a proper division between investment and commercial banking have become louder, more authoritative and part of mainstream debate. Pressure for the introduction — or reintroduction — of this crucial split could soon become irresistible, however much the politicians wiggle and the investment bankers deceive.
“Until now, its been mainly nerds like me who have advocated a full Glass-Steagall separation. Given the vested interests that would lose from this change, we’ve been lampooned for our hot-headed views.
“Yes, our message is awkward. Life would become difficult (and less lucrative) for a lot of powerful people, were we to prevail. Yet we Glass-Steagallers are right. We have history, logic and common sense on our side. And now — thanks to Barclays ex-CEO Bob Diamond, and Liborgate — we also have political momentum.
“The global economy faces grave dangers. On Friday, Spain’s 10-year sovereign bond yield went back over 7pc. Italian yields topped 6pc. The main reason, of course, was fresh doubt over the supposed break-through at last weekend’s Rome summit. After repeated attempts to stabilise the eurozone, the inevitable political backlash among the region’s solvent Northern members is also coming into view.
“When they meet in Brussels [July 8], eurozone finance ministers will once again spin and posture, as they try to agree the terms of a 100bn (£79.3bn) bail-out for Spain’s debt-soaked banks. That’s before they consider Greece (and now Cyprus).
“Back in the U.K., meanwhile, Liborgate seems to have caused the first tremors in what all responsible people must hope is a political earthquake….”
Halligan then reviews all the prominent Britons who have suddenly come out calling for Glass-Steagall, and demands that Liberal or Labour MPs introduce it immediately: “This split needs to happen and someone needs to get it done. There really is no alternative.”
For the full column, click here.