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When banks and finance collapse, what do we do ?
dimanche 14 juin 2026, par ,
What will happen, why, and what we need to do
It’s possible that in the coming months, your bank card could stop working. That you could go to the ATM and find no cash dispensed. That your salary wouldn’t be deposited. That your rent payments would be blocked. It may sound like science fiction. It isn’t. It already happened in Argentina in 2001. In Cyprus in 2013. In Greece in 2015. Closer to home, in the United States in March 2023, three American banks collapsed in a matter of days. In Europe, Credit Suisse, one of the world’s largest banks, disappeared in the aftermath.
What’s coming next is on a different scale. This article explains why, and what you need to prepare for.
What’s happening in finance today
Economist Frédéric Lordon, research director at the CNRS, recently gave an interview in which he sounded the alarm. His diagnosis can be summarized in a few simple points.
• First point : private credit. For the past fifteen years or so, a new segment of finance has developed under the radar of regulation. It’s called private credit. The principle is simple : wealthy investors entrust their money to hedge funds, which then lend to struggling companies. These companies pay very high interest rates, allowing investors to pocket 10% per year when everything goes well. Today, two trillion dollars circulate in this system. That’s three times more than the subprime mortgage bubble that triggered the 2008 crisis.
• Second point : default rates are skyrocketing. Companies that borrowed from these funds are starting to find they can no longer repay. In 2024, the default rate was 1%. A Swiss bank, UBS, now predicts it could climb to 15%. Investors are getting scared and demanding their money back. But this money was lent for five to seven years to companies that can’t repay immediately. As a result, the funds are refusing to return the money. This is called a fund run. It’s the equivalent of a bank panic applied to investment funds.
• Third point : the artificial intelligence bubble. Trillions of dollars have been invested in companies like OpenAI (the one behind ChatGPT). The problem : OpenAI has never made a single cent. It loses six to eight billion dollars a year. Yet, it is valued at over 800 billion dollars based on the promise that it will become profitable by 2030. If this promise doesn’t hold true, the entire pyramid will collapse.
• Fourth point : other debts. In the United States, payment delays are skyrocketing across the board. On auto loans. On student loans. On credit cards. On commercial real estate loans. Each category represents a trillion dollars. And in each one, the warning lights are flashing red.
• Fifth point : the war in the Middle East. The oil shock triggered by the events around the Strait of Hormuz is, according to the head of the International Energy Agency, more severe than those of 1973, 1979, and 2022 combined. It will cause both recession and inflation. It will accelerate business failures. It will make traditional crisis management by central banks impossible.
Lordon concluded that he found no precedent in the history of capitalism for this simultaneous collision of crises. Neither did we.
Why this time the state won’t be able to save the banks
In 2008, when American banks collapsed, governments rushed to bail them out. They gave, lent, and guaranteed trillions of dollars and euros. In France, Sarkozy’s government implemented a massive aid package. In return, we were told we would have to "tighten our belts." The five years that followed were marked by austerity, cuts to public services, mass unemployment, and Greece being placed under supervision.
The bailout was paid for twice by the workers. First, by the public money used to save private banks. Then, by the austerity measures that followed to repay the resulting public debt.
This time, the mechanism will no longer be able to function in the same way. For three reasons.
• States are already heavily indebted. In 2008, French public debt stood at 68% of GDP. Today, it is at 113%. American debt is at 123%. Italian debt at 137%. Japanese debt at 260%. Each new crisis forces states to borrow more, and each new indebtedness reduces their room for maneuver for the next. Financial markets are beginning to grow wary. Interest rates on public debt are rising. Rating agencies are downgrading.
• Central banks are at their breaking point. They have printed astronomical amounts of money since 2008 to keep the system afloat. The European Central Bank’s balance sheet has grown from €2 trillion in 2008 to €6.5 trillion today. The US Federal Reserve’s has increased from €900 billion to €7 trillion. Continuing down this path risks massive inflation. Stopping would mean letting the house of cards collapse.
• Wars empty the coffers. The militarization of Europe, rearmament, and exploding arms spending absorb considerable public resources at the very moment when the financial crisis will require massive funds to save the real economy.
Lordon himself, despite remaining a benevolent reformer of the system, acknowledges this. He even cites the president of the European Central Bank, Christine Lagarde, who responded with an awkward silence to a journalist from The Economist who questioned her about the political consequences of the coming crisis. This awkwardness speaks volumes.
What Lordon doesn’t see, and what we say
Up to this point, Lordon accurately describes the situation. His material analysis is sound. But when it comes time to conclude, he falls back on the 2008 scenario. He hopes that the population will revolt and that the crisis will open a "historic window" to impose a re-regulation of finance and a return to a "boring and disciplined" banking profession. In short : he dreams of a reasonable left wing coming to power and putting its foot down.
We believe this model is outdated given the facts it describes. If governments no longer have the means to bail out banks, it’s not an opportunity for re-regulation that’s opening. It’s a much more brutal collapse that’s looming, with only two possible outcomes.
What will actually happen when it breaks down ?
Imagine an ordinary week. A Monday morning. You turn on the television, or rather, you receive an alert on your phone. A major French bank has gone bankrupt over the weekend. Asian markets are plummeting. European stock exchanges open in a catastrophic crash. The government announces emergency measures.
Here is what can happen in the hours and days that follow.
• ATMs are limited or empty. Withdrawal limits are set at 50 or 100 euros per day, as in Greece in 2015. Then some ATMs stop working completely due to a lack of cash.
• Card payments are becoming unreliable. Some go through, others don’t. Merchants are starting to refuse cards and demand cash. But there’s no more cash.
• Transfers are blocked. Salaries are not being paid on the scheduled dates. International transfers are interrupted. Businesses can no longer pay their suppliers.
• Supply chains are blocked. Without payment, trucks stop leaving. Without trucks, supermarkets go unsupplied. Shelves are emptied within 48 hours.
• The state declares a state of emergency. The army is deployed in the cities to "maintain order." Prices are frozen by decree. Exchange controls are imposed : you can no longer transfer money abroad. Borders are reinforced.
• The bourgeoisie is rushing headlong into war. Seeing the situation slipping out of its control economically and socially, the French and European bourgeoisie is accelerating foreign military involvement. What was merely preparation is becoming direct engagement. Conscription is back on the table. Armament factories are running at full capacity while the rest of the economy collapses.
This scenario may seem exaggerated. It isn’t. Each of its elements has already occurred, somewhere, in the last twenty years. The unique aspect of the present moment is that they could all happen simultaneously, in Europe, on a scale unseen since 1945.
The two paths : barbarism or socialism
In such a situation, there is no third way.
• The first path is that of the bourgeoisie. It consists of salvaging what can be saved of capital by imposing the full burden of the catastrophe on the workers. Rationing. Increased police and military control. Forced wage cuts through inflation. Massive increase in working hours. Requisitioning of property for the war effort. Repression of social movements. And, to provide an outlet for popular anger, a headlong rush into foreign war against a designated enemy : Russia, China, or Iran, depending on the circumstances.
This is barbarism. It is already being prepared. One only has to look at the exploding arms budgets, the tightening of internal security laws, the war rhetoric that invades the media, to understand that the bourgeoisie knows what is coming and is actively preparing for it.
• The second path is that of the workers. It consists of not waiting for the bourgeois state to orchestrate the catastrophe, but of directly taking control of the material circulation of society. This path has a name, a history, and concrete precedents.
In 1871 in Paris, when the bourgeois government collapsed before the Prussian armies, the workers of the Commune organized their own supply, defense, and distribution. In 1917 in Russia, workers’ and peasants’ soviets took charge of production and distribution when the Tsarist system crumbled. In 1936 in Spain, the workers’ committees of Catalonia kept the industry and agriculture of an entire region running during the Civil War. In 1974-1975 in Portugal, after the Carnation Revolution, workers’ committees occupied factories, farms, and empty housing, and brought them back to life.
These experiments were all defeated militarily or politically. But they proved that it is materially possible. That when the capitalist system collapses, workers are not condemned to passively await the return of bourgeois order. They can organize production and distribution themselves, provided they have prepared the necessary tools.
What needs to be built now : the Federation of Working People’s Committees
No one spontaneously forms a neighborhood committee on a Monday morning when the banks are closed. No one creates a works council for food supplies on a Tuesday when the supermarkets are empty. These mechanisms are built before a crisis, not during one.
These instruments have a name in the history of the workers’ movement. They are called committees, or councils, or soviets. They are not a theoretical invention. They are not a whim of revolutionary intellectuals. They are the material form that workers’ self-organization has taken, on several occasions, in the face of the collapse of bourgeois power. Before stating what we propose, we must recall what has already existed. Because what has existed can exist again.
What the Paris Commune of 1871 demonstrated
In March 1871, Thiers’ bourgeois government collapsed before the Prussians. The workers of Paris seized control of the city. For 72 days, they established a new type of power, unprecedented in history. Marx analyzed it in *The Civil War in France* as the first historical form of workers’ power. What were its principles ?
• First principle : all civil servants, all elected officials, all leaders are elected by universal suffrage by the workers themselves. No civil servants appointed from above. No permanent bureaucracy. No administrative careers.
• Second principle : all elected officials are recallable at any time by those who elected them. If a delegate betrays their mandate, if they deviate from the intentions of those who appointed them, they can be dismissed immediately and replaced. This is the exact opposite of the bourgeois parliamentary system where, once elected for five years, a representative can do almost anything without being held accountable.
• Third principle : the binding mandate. A delegate does not decide according to their own whim. They carry out the decisions made by those who mandated them. They report regularly on their actions. They are bound to their constituents by a precise list of demands.
• Fourth principle : equal pay. Elected officials of the Commune do not receive more than a skilled worker. No more material privileges, no more political career as a means of personal enrichment.
• Fifth principle : abolition of the standing army and police, replaced by the people in arms. The workers themselves ensure the defense of their power, in democratically controlled militia units.
The Commune was crushed in blood by the Versailles bourgeoisie—30,000 dead during the Bloody Week. But it bequeathed to the world workers’ movement the model of a new type of power, which is not an improvement on bourgeois parliamentarism but its material negation.
What the Russian Soviets demonstrated in 1905 and 1917
In October 1905, in the midst of a general strike against Tsarism, the workers of Saint Petersburg elected a Council—in Russian, a Soviet—composed of delegates sent by each striking factory. One delegate for every 500 workers. The Soviet took control of the strike, the armed defense of the strikers, supplies, and the revolutionary press. Trotsky became its chairman. He was crushed by Tsarist repression after a few weeks, but the model had been established.
In February 1917, the Tsar fell. Immediately, throughout Russia, soviets sprang up again. Factory soviets. Neighborhood soviets. Soldiers’ soviets. Peasants’ soviets. At each level, elected, recallable, mandated delegates. The soviets sent their delegates to regional soviets, which in turn sent their delegates to the Petrograd Soviet, and then to the All-Russian Congress of Soviets.
For eight months, two powers coexisted in Russia : the Provisional bourgeois government on one side, and the soviets on the other. The soviets effectively controlled the factories, the regiments, and the workers’ districts. The bourgeois government controlled nothing. This is what is called the dual power structure. It could not last. In October 1917, the Second Congress of Soviets seized power and proclaimed the Soviet government.
What exactly did these soviets do ? They elected factory committees that took charge of production. They organized the supply of goods to the cities. They controlled railway transport. They led the workers’ militias. They settled labor disputes. They managed requisitioned vacant housing. They kept running what the bourgeois state had ceased to run.
What the German workers’ councils demonstrated in 1918-1919
November 1918. Germany loses the war. The sailors of Kiel mutiny. The revolution spreads throughout Germany in a matter of days. Everywhere, Arbeiter- und Soldatenräte—workers’ and soldiers’ councils—are formed, modeled on the Russian system. In Berlin, Munich, Hamburg, Bremen, Stuttgart, and all the major industrial cities. The Kaiser abdicates. The Republic is proclaimed.
The movement could have led to a council government, as in Russia. This was prevented by the betrayal of German social democracy, which allied itself with the Prussian army and far-right Freikorps to crush the councils in a bloodbath. Rosa Luxemburg and Karl Liebknecht were assassinated in January 1919 by the Freikorps, on the orders of Friedrich Ebert’s social-democratic government. The Weimar Republic that emerged from this, by its very weakness, paved the way for the rise of Nazism fourteen years later.
The lesson is clear : without consistent revolutionary leadership, without a break with the social democrats who want to save the bourgeois state, the councils can be disarmed and crushed. That is why we insist : the building of committees, starting today, is inseparable from a political break with those who will, when the time comes, seek to neutralize them.
What the Catalan committees demonstrated in 1936
July 1936, Spain. Fascist generals Franco, Mola, and Sanjurjo launch a coup against the Republic. In Barcelona, the working class, organized in the CNT (anarcho-syndicalist) and the UGT (socialist), resists with arms and crushes the coup plotters in a matter of days. The Republican state collapses. The workers take control of the city.
For several months, Catalonia functioned through committees. Factory committees took charge of production—Barcelona manufactured munitions, trucks, uniforms, and bread for the front and the population. Supply committees collected and distributed food. Neighborhood committees organized local life, defense, and education. People’s militias went to the front against Franco. All this without a boss, without a prefect, without a police force. George Orwell, who fought there, described this experience in Homage to Catalonia.
This revolution, too, was crushed, by a combination of Stalinist repression (which sought to liquidate the committees in order to restore the authority of the republican state) and Franco’s military victory. But for a year and a half, it proved that a modern urban economy could function under direct workers’ control.
What Portugal attempted in 1974-1975
Closer to our time, after the Carnation Revolution of April 25, 1974, which overthrew the Salazar-Caetano dictatorship, Portugal experienced eighteen months of revolutionary upheaval. Workers occupied factories abandoned by their fleeing owners and restarted them under self-management. Landless peasants in the South occupied large estates and organized them into cooperatives. Tenants occupied empty apartments. Residents’ committees organized themselves in all the working-class neighborhoods of Lisbon. Workers’ commissions took control of businesses.
The movement was defeated by the combined forces of Soares’s Socialist Party (backed by the entire European social-democratic movement and German money) and the right wing of the army. The movement’s material gains were gradually dismantled in the years that followed. But here again, experience shows that in a developed European country, in the heart of the twentieth century, workers’ self-organization can take control of entire sectors of the economy.
What we are proposing in concrete terms
We propose to build, starting now, in every neighborhood, in every company, in every city, committees of the working people that explicitly draw on this historical tradition. Not as a nostalgic exercise, but as a tool for the struggle of today.
• These committees operate according to the following principles — these are not inventions of ours, they are the very principles of the Commune, the soviets, the workers’ councils and the Catalan committees :
• All delegates are elected by the committee’s general assembly, which includes all relevant workers (from the neighborhood, the company, the building). No self-proclaimed delegates. No unelected natural leaders.
• All delegates are recallable at any time. If a delegate ceases to faithfully represent the members who elected them, the assembly can recall them immediately and elect another. There is no need to wait for the end of a term. Recall is immediate.
• All delegates are mandated. They do not decide according to their own whims. They represent the decisions made collectively by the committee assembly. When they participate in coordination meetings, federations, and congresses, they defend the positions of their committee, not their own.
• All delegates regularly report on their activities to the assembly that elected them. There is no separate power that would become autonomous from the grassroots.
• No material privileges. The delegates receive no perks, no inflated allowances, no separate salaries. They maintain their ordinary living conditions. This is essential to prevent the re-emergence of a bureaucracy detached from the working people.
• The committees federate. The committees of the same district elect delegates to a city committee. The city committees elect delegates to a regional committee. And so on, up to a national congress. At each level, the delegates are elected, recallable, and mandated, without privilege. This is the Federation of Committees of the Working People : not an organization that descends from above, but a coordination that rises from below, preserving at each level the sovereignty of the grassroots assemblies.
• Immediate tasks for the committees, starting today. The committees are not discussion groups. They have concrete, practical tasks. Fighting for better wages, rents, and working conditions. Organizing support when a neighbor is threatened with eviction, when a colleague is laid off, when a family lacks basic necessities. Identifying the needs of the neighborhood and the company. Identifying available resources, skills, and tools. Learning to know each other, to trust each other, to make collective decisions. Preparing connections between committees, communication methods, and logistical capabilities. In short, doing today, on a small scale, what will be needed tomorrow on a large scale.
• Tasks in the revolutionary crisis. When the crisis erupts and the bourgeois state proves incapable of running society, the prepared committees immediately take over. Food distribution in the neighborhoods. Requisitioning of stocks in private warehouses. Price control by supply committees. Production maintained or restarted by factory committees. Empty housing requisitioned and allocated by neighborhood committees. Workers’ militias to defend workers against the forces of repression and fascist gangs. And, as the movement spreads, the Congress of Working People’s Committees seizes political power, becoming the real power in place of the bankrupt bourgeois power.
Conclusion : the historical window that opens
Capitalism is not an eternal inevitability. It is a historical mode of production. It was born at a specific moment in history—Europe from the 16th to the 18th centuries—it imposed itself on the entire world in the 19th century, it entered its imperialist and declining phase in the 20th century, and today it is reaching the material limits of its reproduction. The contradictions accumulating in the financial, productive, ecological, and geopolitical spheres are not mere circumstantial accidents. They are the expression of the fact that this system has entered the final phase of its historical existence.
This final phase could last a long time if we let it. It could end in barbarism—fascism, widespread war, ecological collapse, mass destruction—if we are unable to oppose it with an organized alternative. Conversely, it could pave the way for socialism if we know how to seize the moment.
History teaches us that revolutionary opportunities don’t arise every day. The previous one in France was in 1968. Before that, it was the Liberation in 1944-1945. Before that, it was the Popular Front in 1936. And before that, the Paris Commune in 1871. Four opportunities in one hundred and fifty years. Each one partially ruined by the absence of consistent revolutionary leadership, by the betrayal of reformist institutions, and by the disorganization of the workers at the decisive moment.
We are entering a period that could open a new window. Perhaps wider than any before, because the impending crisis is deeper, more systemic, more global. This window must not be squandered.
To prevent it from being wasted, the working class must have its own organs of power when the time comes. These organs will not fall from the sky. They will not spontaneously spring from the minds of the masses the moment the crisis erupts. They must be patiently built, starting now, in the long preparation that always precedes revolutionary moments.
That is why we call on all workers, employees, laborers, technicians, precarious workers, retirees, students who read these lines to get in touch with us, to form committees where they are, to link up with other committees that are forming, to build step by step the Federation of Committees of the Working People.
This is not a matter of personal taste. It is not simply another question of political opinion. In the period that is beginning, it is the material condition for workers not to be victims of the impending catastrophe, but to use it as a springboard for their emancipation.
As Leon Trotsky wrote in 1938, in the Transitional Program, which remains for us a fundamental guiding text : “The historical crisis of humanity is reduced to the crisis of revolutionary leadership.” This crisis has lasted for almost a century. It will not be resolved by mere rhetoric. It will be resolved by the patient and determined construction of a political instrument equal to the times. This instrument is the Federation of Working People’s Committees, linked to a substantial revolutionary party capable of giving it a clear vision and firm political leadership.
History is watching us. The workers of the Commune, the soviets of 1917, the German councils of 1918, the Catalan committees of 1936, the Portuguese commissions of 1975, and all the others before and after, are watching us. They did their part. They proved it was possible. They paid the price of their defeat for us, so that we, in turn, could win.
It’s up to us to take over.
Neither resignation nor reformist illusion. The building now of the organs of tomorrow’s workers’ power.
For the Federation of Working People’s Committees.
Socialism or barbarism.
Messages
1. When banks and finance collapse, what do we do ?, May 8, 5:09 AM , by Myriam
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Global banks and finance are threatened by the international situation caused by the war in the Middle East…
2. When banks and finance collapse, what do we do ?, May 9, 6:37 AM
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All Mélenchon proposes in response to the collapse of finance and banks is a moratorium on debts !
He doesn’t talk about a proletarian revolution, but about defunding the world while remaining within capitalism. It’s a utopia...
3. When banks and finance collapse, what do we do ?, May 22, 6:23 AM , by Florent
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Lenders are getting rich at the expense of the state with the government’s blessing !
We, the proletariat, reject these debts and the interest on those debts : let the capitalists pay ! And if they refuse, we will pay from their capital !