It’s five years since Northern Rock hit the rocks, and four years since Lehman Brothers went bust. The banking system remains fragile, a number of Eurozone banks still posing a threat of global systemic instability. Regulatory reform creeps ahead, slowly, very slowly, and (as Andy Haldane pointed out in his paper The Dog and The Frisbee) will not work anyway. In other words, after half a decade the financial crisis is still in full swing. We are all paying for it in direct taxpayer subventions, through the central banks massively subsidising banks’ costs, and through slow growth – the latest US figures showing real median incomes at their lowest since 1995 – 1995! –  illustrate the point starkly.

So I was shocked an angry to read a small article in the second section of the FT this morning (Banks Force Aluminium Market Shake-Up) pointing out that big investment banks have started speculating in aluminium. At a time of slow global growth, metals prices should be falling. Instead, there has been a 50% increase this year in aluminium because Goldman Sachs, JP Morgan and the like are buying up large stocks and warehousing them to restrict supply.

“The increasingly dominant role of banks including Goldman Sachs, JP Morgan and Deutsche Bank – as well as traders such as Glencore – has prompted a surge to record levels in the premium consumers pay for metal over the benchmark price set at the London Metal Exchange.”

This comes on the back of evidence that investment bank speculation on food commodities through new indices (launched by Goldmans) made a significant contribution to the increases in food prices in recent years.

Is anybody else angered by this? And why are politicians and regulators as silent on this front as they have been until very recently on the use of the financial system for tax avoidance and money laundering? A number of books have flagged up these behaviours in banking – Nicholas Shaxson’s [amazon_link id=”0099541726″ target=”_blank” ]Treasure Islands[/amazon_link], Misha Glenny’s [amazon_link id=”0099481251″ target=”_blank” ]McMafia[/amazon_link] and [amazon_link id=”0099546558″ target=”_blank” ]Dark Market[/amazon_link], Matt Taibbi’s early ‘vampire squid’ intervention in [amazon_link id=”0385529961″ target=”_blank” ]Griftopia[/amazon_link] – and other journalists have been covering the dark side of banking. But there is no salience for these issues in policy and political circles. Why aren’t central banks concerned about soaring commodity inflation when the economy is flat, and the deliberate market distortions causing it?

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