Lessons from the edge of the crisis

Three items of news nearly dropped out of sight in the last day or two - except in the financial press. They shed light on bosses and rulers - and maybe offer the rest of us a lesson.

In the too-ing and fro-ing between Barclays and Westminster in September 2008 it emerged that Barclays loans and interest rates were 'among the most catastrophic in the financial sector.' The famous Barclays - that didn't take a dime of taxpayers money - It has now admitted it was "low bowling" its interest payments on loans from late 2007. Bob Diamond told the MPs on the 5 July that the real rates of Barclay's loans 'might have led government officials to conclude  - My goodness, we need to nationalise.'

My goodness.

Even for uber-capitalist Diamond Bob nationalisation seemed perfectly rational and certainly plausible. That was when the rich were very worried that they might lose everything. Nationalisation meant their investments in the bank were gone - but they would still have their assets and not have to liquidate them to pay the bank's debt.  We have an answer then to the question what would happen if a government nationalised the banks. If it was pointed out that the super rich could lose everything otherwise - to pay the debt - then this measure would not produce the instant crisis and exit of big capital that many commentators threaten the rest of us with.

Msr. Hollande France's new president, has just announced extra one -off taxes raising 2.3 billion Euros on those with wealth over 1.3 million. His pledge of a 75% rate next year on annual incomes over 1 million Euros remains intact. It seems that France's biggest industrial and financial groups 'seem likely to hunker down'. Msr Poitirinal of Unibail-Rodamco (a French biggie) said "At this stage, we have no plan to move our HQ outside of France. And we hope that France will remain an attractive place in which to invest and to recruit and remunerate top people." (FT analysis 5 July)

Lesson? Big capital of all sorts has deep roots inside its bases of operations. The modern image that it is prepared to float away at the drop of the hat ignores the fact that the scope for those sort of strategic decisions has been very wide for the last 20 years. Those who have stayed put now face much gloomier prospects for any potential move to the BRIC countries.

Spain's High Court has just open a fraud investigation into Rodrigo Rato, former IMF chief and recently chair of Bankia the part nationalised Spanish bank. Rato and 32 other prominant leaders in politics and business are in the frame. They are accused of falsifying the banks accounts. They did it, it is alleged, to mislead investors and avoid the need for a state rescue. Before its nationalisation Bankia, under Rato, declared a 309 million Euro profit. Slight mistake. It was actually a 3 BILLION Euro loss. The Spanish government rejected calls at the time for an enquiry.

Another lesson? When they commit fraud - put them on trial.

Summary? They are more vulnerable (to decisive action) than we often think.