Archive for November, 2009

Riots could have broken out in connection with banking collapses

November 1, 2009

In October 2008 Great Britain was only a few hours away from a banking collapse, which would have triggered massive riots involving military action.

The two leading banks, Royal Bank of Scotland and HBOS, were only a few hours away from a total collapse, which could have resulted in extensive civil unrest in major British urban areas.

David Livingstone, senior research fellow at Royal Institute for International Affairs in London: “The banking collapses would have forced Government to mobilise massive police and military forces to restore general order and to keep the most vital community functions in operation”.

Tom Kichmaister, research fellow at London School of Economics: “This situation would have resulted in absolute panic, a run on the banks and the population left with no money to buy bread. The costs and consequences for the economy would have been catastrophic”.

A similar scenario with possible involvement of martial law as a consequence of the financial crisis was launched in connection with comments from Rep. (D) Paul Kanjorski (USA) in February 2009.

(check: February 2009).

It may intensively be questioned:

Can the basic structures for the existence of populations and nations be maintained by the forces of free financial markets, which to a great extend are left in the hands of individuals making dispositions influenced by incentive- and bonus packages?

The financial crisis may involve consequences way beyond the traditional geo-economical powers. Nations like China, The Arab Emirates and Russia have demonstrated their increased influence on occidental companies and institutions. Premier Gordon Brown’s expectations concerning Saudi Arabian IMF-support certainly gave thought to the influence from energy and cash flow on the geo-political agenda.

Are we facing the end of the American-European dominance with democracy at stake?

Answers and solutions will be complex, and should involve cooperative actions taken by the international University and Business School community, as stipulated in the coming EQUAL Guidelines on Sustainability:

“There is currently considerable global financial instability, widespread economic decline and unprecedented levels of world debt an poverty. These represent huge global challenges, yet at the same time, the opportunity to re-consider our current financial, economic and social models in relation to business and management practice, education and development. The United Nations’ Globally Responsible Leadership Initiative (GRLI) and the Principles for Responsible Management Education (PRME) should act as key reference points for business schools in relation to these guidelines”.

Povl Tiedemann

October 2009