Friday, August 17, 2012

Banking Then and Now

It appears that financial shenanigans are not a new thing at all.  Bloomberg brings up a very interesting scandal from Medieval England that to their way of thinking looks a lot like today’s LIBOR banking scandals.
In Medieval England usury, lending at interest, was viewed with great suspicion, and generally illegal.  But a number of financiers to the crown used the foreign exchange markets to disguise the fact that they were charging heavy interest rates to the crown.  The crown of course knew this, but needed the money.  So when there was a great outcry, he at first bowed to public pressure and threw one of the main financiers, Richard Lyons, into prison.  But then as now, financiers are not treated the same as you or I.

Adrian R. Bell, Chris Brooks, and Tony K. Moore, Bloomberg, 27 July 2012 (hat tip: Big Picture)
Once parliament had dissolved and the public outcry had died down, however, the king’s eldest son, John of Gaunt, acted to reverse the verdicts of the Good Parliament. Latimer and Perrers soon reappeared at the king’s side and Lyons was released from the Tower and recovered his wealth, while the “whistleblower” de la Mare was thrown in jail. The government also sought to appease the wealthy knights and merchants that dominated parliament by imposing a new, regressive form of taxation, a poll tax paid by everyone rather than a tax levied on goods. This effectively passed the burden of royal finance down to the peasantry.
It seemed as though everything had returned to business as normal and Lyons appeared to have gotten away with it. In 1381, however, simmering discontent over continuing suspicions of government corruption and the poll tax contributed to a massive popular uprising, the Peasants’ Revolt, during which leading government ministers, including Simon of Sudbury (the chancellor and archbishop of Canterbury) and Robert Hales (the treasurer) were executed by the rebels. This time, Lyons did not escape; he was singled out, dragged from his house and beheaded in the street.
Well, the story at least started off the same.
In the end the King tricked the peasants into meeting with them, and then executed them.  So they didn't come out completely a head: so to speak.
1381 Peasants Revolt Postard (purchase here)


Stephen said...

Russell, you're a hoot...thanks.

Synfidie said...

The interesting thing will be to see if there will or could be a "peasants revolt" in modern times.
Sometimes, I think that the "protests" in western societies are just for show nowadays and don't actually do anything (aka the 1% protests)