Bankers Take a Bashing While Darling Takes a Bow

Last Updated Oct 9, 2008 3:00 PM EDT

Bank bailout views turn to banker bashing in as the Guardian's Polly Toynbee demands a "clear out" at the top of City institutions in an interesting, albeit long, weekly political podcast.

Rather than allowing the perpetrators of the chaos, all "thoroughly imbued with the spirit of the City", to oversee the new structure of the City, she calls for new faces to advise on regulation.

She also calls for a minimum level of corporation tax in eurozone countries to prevent some countries setting themselves up as offshore havens (Ireland, specifically).

In the same discussion, Observer economist Bill Keegan applauds the concerted intervention of the banks yesterday to avert Armageddon -- but it won't stave off recession, he says.

In fact, it's beginning to seep out of the Square Mile and into the 'real world'. Small businesses are being threatened with higher overdraft charges and the business confidence is waning, according to the British Chambers of Commerce. One accountancy firm boss predicts insolvencies will rise by at least 25 per cent next year, with over 20,000 firms going to the wall.

Some 20 local councils also look set to lose out as their deposits in Iceland's failed banks -- Transport for London, too, has a £40m deposit in Kaupthing Singer & Friedlander. And it's not the first time local authorities have become embroiled with the wrong banks, says Burning Our Money.

But not everyone's in the soup. Ruth Sunderland sees HSBC distancing itself from fellow banks, while wags have changed its brand from "the world's local bank" to "the world's only bank".

It foresees consolidation at a global level among the banks that make it through the current economic turmoil. There will be opportunities as banks seek to deleverage or look for a protective business partner, but governments will be closely involved in any short-term merger and acquisition activity, according to HSBC finance director Douglas Flint.

But Darling's reputation's done an about face -- this weekend, the Washington DC gathering of G7 finance ministers will be looking closely at Britain's bailout plan as a potential way of salvaging their own financial institutions.