Dr. Molly Scott Cato, National Green Party finance speaker and the South West Green Party's lead candidate for next May's European Elections, has called on Business Secretary Vince Cable to split up Royal Bank of Scotland (RBS) and turn it into local community banks [1].
The call comes in the wake of a damning report on the bank's "unscrupulous" treatment of small businesses [2]. The allegations centre on RBS offering customers help with turning their businesses around but instead deliberately charging high fees so that they would become bankrupt, enabling the bank to pick up their assets on the cheap. The allegations will now be investigated by the Financial Conduct Authority.
Scott Cato said: " This bank, which we, the taxpayers of this country, bailed out and own, has been found actively working to destroy small businesses and profit from their demise. It has long been clear that the financial sector in this country is sucking the lifeblood out of our economy, but the fraudulent nature of RBS's business activity takes us to a new level of revulsion.
The Green Party is calling for the Royal Bank of Scotland to be broken up and turned into a system of local community banks based on the German banking system. Under such a system each local bank could include local business people and others with an understanding of local economic needs on its Board. It would still lend at interest but do so in a way that served its local economy.
Scott Cato concluded : "A system of local community banks has been the engine of the German economy, supporting a thriving small and medium-sized enterprise sector. These shocking, and possibly illegal, revelations about a bank that owes its existence to public support and is 80% owned by the public, quite frankly beggars belief. It is time for a community banking revolution and only the Green Party has the resolve to bring this about.
[1] See Molly Scott Cato Gaian Economics blog for further details: http://gaianeconomics.blogspot.co.uk/2013/11/royal-bank-of-scandal-reaches-new-low.html
[2] The Tomlinson Report into the practices at RBS, ordered by Vince Cable's Business Department, reports that the bank drove firms to collapse in order to buy back their assets at rock-bottom prices. See Independent: RBS 'drove businesses to collapse before stripping their assets': http://www.independent.co.uk/news/uk/politics/rbs-drove-businesses-to-collapse-before-stripping-their-assets-8960879.html