Banker rancour

When I were a lad, usury was still a mortal sin – OK, I’m not quite that old.  Actually, now I come to think about it, presumably usury is still a mortal sin: I’m not aware of a Newer Testament (Testament 3.0?) that shows God has changed His mind, despite John Calvin’s best attempts to lay the foundations for modern finance.  But, no, I’m not going to blame the Calvinists for the recession – though it would probably represent an original choice of destination for culpability.

Anyway, returning from consideration of such thorny theological issues, I was going to say that when I was a boy, banks were very dull institutions.  For a fee they would look after your money, and occasionally allow you to gain access to it (as long as you didn’t have a job).  They would also give you a cheque book and allow you to set-up standing orders for regular payments – and charged you whenever you used either facility.  Finally, if you could prove you didn’t need one and could charm the forbidding figure of your Bank Manager, then they would offer you a loan.  I think there were also Investment Banks, but they made very little (OK, no) impression on my infant self – they probably occurred less frequently in the sitcoms (or children’s TV) of the 1970s.

Then came deregulation: the Bank Manager vanished, loans were offered on a completely non-discriminatory basis (no longer was a lack of money or any expectation of being able to pay back the amount borrowed considered a barrier to lending) and no high street bank was complete without an investment bank of its own.  On the positive side, customers with jobs were now able to obtain access their own money – though this may have helped fuel the consumer boom, in a world where people could rarely access their money, saving was easy!

A cynic might wonder if the Banks, in their modern incarnation, provide any positive benefit to the economy at all, let alone to wider society.  In their brief moments of rest between trashing the world economy and mis-selling financial products to those that don’t need them (most recently, to the already beleaguered small business sector) they seem to be indulging in outright criminality: who gets to keep the £290million that Barclays were fined?  Should I be expecting a fiver in the post from Bob Diamond as my share?  In fact, it seems that if we are serious about reducing crime and the cost of crime, we should forget about placing more “bobbies on the beat” (though, to give the government their due, they do seem to have forgotten about this quite successfully already) and move to a plan for more “bobbies in the banks”.

The Banks don’t seem to contribute much to the economy through the direct payment of tax, though they do employ a fair few people and the more lowly paid probably can’t afford to indulge in sophisticated tax evasion and so probably do contribute something to funding the State.  Not only did the wretches wreck the economy, and then bleat that they were too big to fail and take massive financial bailouts from the States they had been so reluctant to contribute towards, but they established a bailout precedent now being exploited by troubled countries across the Eurozone.  Should I ever run into financial difficulties, it is clear that I need to ensure my debts are measured in the hundreds of billions of pounds: financial irresponsibility (or mere misfortune) leading to the owing of a few thousands leads to one joining the new undeserving poor with the concomitant lack of any State-funded safety net.

However, despite this relentless negatively take on its recent and well-reported activities, I remain pretty sure that a well-run banking sector is very important to the well-being of the economy.  Sadly, I couldn’t offer a single piece of evidence to support this opinion – despite the existence of wall-to-wall financial reporting for several years across a wide range of media outlets.  Consequently, I would like to make a couple of a suggestions to our Banks for a sensible way to use the time they have (until recently) used making discontinuous topological transformations of the Law.  Firstly, they might like to ensure that all of their staff take a few very basic lessons in morality, preferably followed by quite a searching examination (and perhaps one that is repeated annually, like an MOT for morals).  Secondly, they should perhaps start explaining to the folks whose money they have been gambling away how they actually bring value to society?  If not, I feel that governments – ever at the mercy of public opinion – well regulate them, if not out of existence, then at least back to the 1950s.  If this happens, I suspect we would all be the poorer for the change.

This post does seem quite short of jokes (unless you would be willing to accept financial regulation as the ‘joke’),  but after the previous post many readers may consider this a positive (or business-as-usual).

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