Wednesday, 25 November 2009

Law Lords reassert bank supremacy

As I write, the BBC has just broken the news that the Supreme Court "has overturned earlier court rulings that allowed the Office of Fair Trading to investigate the fairness of charges for unauthorised overdrafts." This does not mean that the banks have won their case for extortionate and exorbitant fees, but that they will not even face investigation.

Lord Phillips, president of the Supreme Court, has said that "this will not close the door on the OFT's investigations and may well not resolve the myriad cases that are currently stayed in which customers have challenged the relevant charges." However, given that the Court "not allow an appeal by the OFT to the European Court of Justice," it is a fairly safe bet that the case is dead in the water.

As the BBC state, the "ruling will come as a bitter blow to the consumer organisations who have campaigned against what they considered to be unfair overdraft charges." But that is not the full extent of the ruling's implications. Rather, as with the "new rules" trumpeted in September to promote "a responsible and long-term approach to remuneration," this decision reasserts the impunity of the banks in the economic order. Then, it emerged that "the curbs do not limit bonuses." Now, it is harder than before to challenge extortion by banks.

This only reinforces, then, what I said after the G20 summit in London this April. Capitalism, the subject of perhaps more defensive editorials this last year than in the preceding two decades, has rebranded itself. However, the fundamental principles of privilege, inequality, and usury remain as dominant as ever.