Do Banks Rule Government? Rise in earnings with increased volatility, presidential candidate and more

Typical banking situation.

Rising profits

A profit of 27% as a result of trading division rebounds. This was due to increased volatility that profited its core business.

Rothchild is doing well too with an increase in profits to the point that it is looking to expand its US branch. 

Both of the above are extracts from the financial times and seem to point towards an interesting historical suspicion that people have held. Do banks rule the world? Do they rule nations and the mind behind the most esteemed political leaders in the country? These are of course critics of capitalism speaking. Their assertions are indeed worthy of consideration. Was it not Goldman Sachs that triggered the crisis all the way from the USA to Greece? Was it not American investment banks that had a stake in Iceland's property market that in one swing got Europe to its knees?

Pardon the fancy hyperbole but the crisis was real then and the negative impacts of banks are felt even today. It constructs a frame that leads to 3% of the world supplying goods or services in some manner to the remaining 93%. In other words, wealth is managed by the top few. Poverty is a feature by design of the economy. I am not against incentivised work but I am saying that the system is flawed and the first step towards its reform is acknowledging it for what it is.  

Having said that, consider the old accusation of banks running too many governments and central banks in light of Emmanuel Macron's rise to presidency. Now, I have no idea about Macron's leanings in this context but we can say in one sense that money is indeed a defence just as good judgement is. The power of money could indeed be a strengthening feature of his candidacy. His work for Rothchild might not have made him popular with the social opposition in France but if, all in all, he can demonstrate credibility and leverage his financial know-how in the right sense, this might hold France in good stead. 

Having said this, France is still scarred, a decade later, from the financial crisis because the reforms that followed it, whether in the USA with the Dodd frank Act or in Europe through Basel Accords, they have all failed miserably. At best they have treated the symptoms and not the cause. 

That is all for now just as food for that with updates for today. 

This is your weekly economics correspondent from Brighton. 

over and out 

Aman Jamwal 

Behavioural Economics Doctoral Student