There was a very notorious bank robber in the USA called Leonard William Willis . He was one of the most successful bank robbers of his time. When the FBI eventually caught Willis, he had stashed an unknown quantity of loot and most of it was never found. He coined one of the most quoted criminal phrases. After his capture, journalists interviewed him in jail. They asked him why he robbed so many banks. He replied:" 'Cos that's where the money is." This response is unfortunately also a criminal reality in our lives. Most criminals converge in places where the money and the banks are. Some criminals are on the outside, trying to get in. Some are already inside. If you want to live a life free of crime, move to the least populated areas where there are no banks and people still hide their money under a mattress. My father buried his money underground in a number of cheese whirl glass bottles around his house and we had a hell of a time digging them up when he lost the map.
Bank robbing is not a one sided affair because the term 'bank robber' has a double meaning. It could refer to a person who enters a bank with a balaclava and a gun to steal some cash from the tellers and the safe. Alternatively, it could refer to a bank that fleeces the money off its customers with dubious and very low interest rate investments and high bank costs or lending rates. It may even also declare it bankrupt unless the investors bail it out on a pro rata basis. You didn’t know that, did you now?
The general public and most governments only cottoned on to the latter meaning after the collapse of Freddie Mac and Fanny May in America. It always surprised me that anyone with some financial sense would invest their money in institutions with names like that. Freddy and Fanny sounded more like a poorly financed pornographic video with a Scot in the leading role. After the Cyprus affair when the government seized up to fifty percent of the investors funds to bail them out of the Euro mess, the Russians who invested their money offshore in tax haven banks of Cyprus became aware that a government could also legitimately become a bank robber. The Cyprus government realized that investors in their banks could not complain or raise any kind of hell because their money was not supposed to be there in the first place. But theft is theft. I suspect if that happened in our haven, the balaclava and gun type of bank robber will turn out to be a big investor only trying to withdraw his investment. Just imagine the field day advocates will have to defend this type of crime!
After many years in international trade and finance, I became quite familiar with the notoriety of financial institutions. At one time, my firm was employed by the marketing arm of an African government to trace large stockpiles of chrome ore that had been deposited around the world. The only map of quantity, quality and whereabouts disappeared together with the Russians and East Germans when they departed from Africa after perestroika. I found most of the material by following the money trial and that's where the banks came in. One could never begin to imagine the complexity of international trade when the origins of material became an issue. Tracing the material was difficult enough with shipping documents and manifests in Mandarin where the origin of shipments was clear only if you could write and read the strange alphabet. It was when we had to explore the route the money had taken, that you could only gasp at the commissions on commissions on other administrative fees that almost doubled the cost of the material. It posed a grave challenge to expose the actual beneficiaries and the myriad marketing agents and their exorbitant marketing fees. Most of our reports read like novels of fiction. One 'bank' that became prominent in our investigations had us walking into an underground bunker to a conference table on a snow-white carpet as thick as a lambs' wool. Behind their side of the conference table was a large square of bright light so that it was more than difficult for us to see them whereas we were almost under a spotlight. We arranged a second interview but this time we had a few representatives of the local law with us. When they realized they were themselves under scrutiny, the bright light was turned off and we made good progress.
Even now as at that time, we discovered that tax haven status banks are only a front for the real action. Some very large banks in the international world prefer ignorance to the origin of investor's money. It was hypocrisy when Tony Blair became a campaigner for the closure of all tax havens when the UK has control over the tax haven Channel Islands, BVI and similar institutions, all unchecked by the Bank of England. You must recall the unquantified trillions of Mark deposited in banks by Jews who were exterminated during WW2. The only banks that acknowledged existence of such funds were the Swiss, only when they were challenged to do so. All the unclaimed Jewish money in the other European banks simply vanished without a trace. Some more bank robbing took place simply because the investors and their testament beneficiaries were all dead. At that time, I rather favored Trevor Manuel declaring the Eastern Cape enclave a tax haven, only for foreign investors. You can just imagine the amount of African capital suddenly enriching one of the poorest regions in our country. If African capital is being deported, at least keep it on the continent!
For most of us, there are trusted names and ownership in our large banks. Don’t be fooled. Take time to look at the financial statements of the banks you support. Look at the foreign owners that have suddenly acquired a majority shareholding in your ‘local’ bank. Just how sound and stable are the economies of the international majority shareholders?
Banks should redefine their responsibility before investors would regain faith after the 2008 collapse. Bank robbing in the modern sense should not become a label on their website. Greed and how to oppose it should be the benchmark for all financial institutions. The lending and investment differential should go back to one percent where it was some years ago.
Just how that can be achieved is dubious to begin with. There are just too many vested interests to consider on a worldwide scale. The gross misfortune the world faces that will affect even the smallest investor, is when the next large scale bank robbing will take place. The financial devastation in 2008 was a wake up call. Next time, we may not be so lucky. Marc Faber, the Swiss prophet of boom-gloom-doom proved to be right in retrospect. His financial predictions for world banks in the near future are far too horrible to contemplate. After reading it, I knew why my father preferred to bury his money in cheese whirl glass bottles around the house. He was not so dumb after all. I hope I don't lose the map.
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