It's astonishing the banks haven't been ring-fenced earlier

The in-kind subsidy to consumer banks has been crying out for a limit.

The chancellor has announced his plan to "electrify" the proposed ring-fence between retail and investment arms of British banks — which George calls the "Jurassic Park solution" — ensuring that if a bank tries to breach the ring-fence, it will be separated fully.

Much of the criticism of the ring-fence, as well as the Chancellor's defence of it, stems from its effects on financial stability. That's obviously important, but there's a bigger reason why such a move is long over-due, and that's the state backing of retail banks.

This backing isn't even a question of the too big to fail subsidies which hand around £34bn to the biggest banks. Instead, it's the effect of the financial services compensation scheme.

That's the government body which protects up to £85,000 of individuals' deposits with accredited banks. Since it was formed, it has paid out over £26bn, mostly in the aftermath of the financial crisis, to customers of retail banks which went bust.

And that's good! The FSCS is necessary in a world in which customers can't be expected to judge the financial health of a bank when deciding where to keep their money, and even more necessary given that a bank account is largely deemed a prerequisite of living a normal life in the UK today (hence the concern over the lack of basic bank accounts). But, at least on a cursory analysis, the FSCS also reduces the cost of capital for banks, because they don't have to compensate customers for the risk that they will lose all their deposits.

For a bank that's not failing, though, the FSCS is an in-kind subsidy, and it makes sense to limit that distortion. That's the reason for a ring fence: it ensures that the government is only subsidising the consumer banking sector, rather than the entire sector at once.

The stability arguments are important; and the ring-fence does indeed lessen the downside of a casino bank going under (although the amount it will lead to broader stability of the financial system is more questionable). But even without them, there'd be a strong prima facie reason for some kind of limit to the amount consumer deposits can be leveraged.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Abbas / Magnum Photos
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Portrait of a religion: Hindu rituals and celebrations across Asia

The Iranian photographer Abbas spent three years journeying through the Hindu religion capturing a wealth of sacred ceremonies.

 

My relationship with God,” Abbas says, “has always been strictly professional.”

The French-Iranian photographer has spent his life photographing every major religion on earth. But, be it the God of Christians, Jews, Muslims, Buddhists and Sikhs, he has always retained a degree of distance. He doesn’t tell me what to do,” Abbas says. “And I don’t tell Him what to do with his believers. It’s nothing personal.”

Abbas, 72, was born in Iran and raised in Algeria during that country’s fight for independence. As a young man, he made his name photographing the Iranian Revolution of the late 70s, including a now iconic image of an old, veiled woman dragged to her death by a lynch mob.

It’s not faith I’m interested in,” he says. “It’s what men make of their faith. I’m not interested in God, I’m interested in what people do in His name — the great things, and the stupid things.”

Now he has photographed the Hindu faith. And this, Abbas realised, was to be a bit more complicated than usual. Every major religion tell us to worship one God. They have one sacred text, one central religious authority, one idyll of a returning prophet. Apart from Hinduism.

A baba sanyassi by the altar he has erected to his god in Pushkar, Rajasthan, India. Credit: Abbas / Magnum Photos 

Hinduism is a religion of more than 330 million Gods and Goddesses,”Abbas says. “They change name, nature and sex. They marry and divorce and ask for alimony. They are strangely familiar to us in their doubts and weaknesses. They are, all in all, very human gods. Like us, they are capable of the best and the worst.”

There are more than a billion Hindus in the world, making it the world's — and the UK’s — third largest religion. It's also the world's oldest religion, with key texts dating back to 1500 BC. But what do we know of this faith, one followed by around a million British citizens?

Hindus believe in Karma — a cycle of birth, death, and rebirth. And so their faith is expressed through a dizzying variety of sacred rituals and celebrations, animals and insects, places and texts.

For his most recent photobook Gods I’ve Seen: Travels Among Hindus, published in October, Abbas travelled for three years through India, Bali, Sri Lanka and Nepal.

"Hinduism may be the least egalitarian of the great religions,” Abbas says. “But what diversity exists in its expression. All I had to do was go down to the street, and the religion unfolded before me. I would walk to the river and see a God thrown into the sea.” (This was the river Hoogly in Kolkata, India, where devotees drown a statue of Durga, the Bengali avatar of goddess Kali).

This series began on 1 January, 2011, in The Hanuman Temple of New Delhi. There he discovered a monkey deity all of 15 meters tall. The city’s aerial metro trundles past at the height of the monkey’s waist, and devotees enter through an opening between its legs. “I was seized with laughter,” Abbas says. “I could tell I was going to like this religion, after more than 35 years of photographing the Sons of Abraham.”

 

In the Golden Temple, the Sikhs’ most sacred place, a pilgrim holds a leaf to receive the morning food offering, Amritsar, India. 
Credit: Abbas / Magnum Photos 

Abbas’ photographs are remarkable in their scope, from a Tantric Sannyasi in Tarapith, India, who uses the skull of his dead guru to enhance his spiritual powers during meditation, to naked devotees in Allahabad, in the north of the country, who rush to the holy waters for a ritual bath, to a man in Colombo, Sri Lanka, suspended high in the air from hooks inserted into his flesh, to Jain devotees in Mumbai, wearing masks to avoid harming insects by swallowing them.

On his penultimate journey, Abbas found himself in Junjungan, a village near Ubud in the uplands of Bali. Every 30 years, the village has a festival of sacrifice.

For a week, praying, dancing and offerings to the deities, mostly of live animals, succeed one another,” Abbas says. “All domestic animals, or those easily caught and unfortunate enough to be alive on this friendly island, are sacrificed, from the largest buffalo to the very smallest chicks, a tortoise, a newly born piglet.”

Students from the Indonesia Institute of Arts dress up for a rejong traditional dance in the Batur temple, Kinmantan, Bali. Credit: Abbas / Magnum Photos 

Abbas saw a pair of dogs, muzzled, tied to a pole and exposed to the sun. “The devotees prayed around them, sitting on the ground with their hands folded above their head. As the two dogs became more agitated, so a devotee tried to calm their distress by stroking them. Soon after they were massacred, and not eaten. It was such an innocent form of sadism.”

Remembering the sight of the dying dogs, Abbas says: “Abrahamic religions try to suppress the dark side of mankind by encouraging the struggle towards its annihilation. Hinduism recognises our dark sides, but urges their coexistence with the good and the light, in order to reach a sense of personal harmony. It’s a philosophy, I admit, with which I am more in tune.”

Gods I’ve Seen: Travels Among Hindus is available from Phaidon.

Tom Seymour is a freelance journalist.