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Sunny Handal wrote ‘Why we need more banker bashing’ – Simple answer. We don’t.

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Whilst perusing The Guardian earlier I came across an article entitled Why we need more banker bashing and knew that I’d get annoyed if I read it. So I read it. I got annoyed. Sometimes I am my own worst enemy I really am.

So anyway the link is there for all to see but the long and short of it is this. Banking reform has been pretty weak and shouldn’t we have more say in how these private companies work? We’ll look at banking reform first and the Vickers Report and recommendations are to be carried out with one or two measures watered down. This includes the proposal that the biggest UK banks should have enough capital plus loans that could be converted into cash to cope with losses equal to one fifth of the size of their total balance sheet.

The reason this is not being carried out is for some firms this would be unfair due to their trading outside the UK economy being dwarfed by that inside. For example HSBC is a global giant with it’s revenue inside the UK being but a small part of its global balance sheet.

Late last year I sat down with a very senior banker for an interview where we explored all the issues regarding banking in the UK and around the Globe. The banks have clearly had to change and evolve over the past five years and all of them have far more liquidity now than they did then. The issues of the past were that they didn’t have cash to hand in a crisis. Now they do. Most (if not all) banks are now in a better financial situation today than they were when the banking crisis hit but the credit ratings do not meet up with this as they take into account the public perception and not just the facts.

As fr whether we (you and me and/or the governments of the world) should have more say in how they are run well that’s an interesting question. Did we need more say in them when they were bringing in vast sums of money into the economy or it is only when they screw up do we need to step in? I know not all companies and industries are made equal but do the government need to step into any struggling industry and tell them how to run it? Are the government more or less qualified to know how to run the banking industry than those – you know – in the banking industry?

I doubt that somehow. The Vickers Report will change banking and will put strains on the whole sector in the name of safeguarding taxpayers money. This will be seen by us – the taxpayer – as a good thing and by the banking sector as a very bad thing. However they will plough forward. They will make less money and bring in less money to the economy but should in theory be a safer investment. We’ll see how that goes.

In his summing up Sunny Handal writes the following. ‘Public anger has grown because it is starting to dawn on middle England that while the rest of us are paying for the crisis, the people who caused the crash want to go back to 2007’. This I have to disagree with. The reason public anger has turned on bankers in because the government and the media have decided that they are the scapegoats for this and deserve to be punished. The Daily Mail and other groups blame the foreigners too and they have been the other scapegoated party. The British way is to always find someone to blame for everything and then blame them totally. The banking crisis was a mixture of issues of which the bankers must take some of the blame but not all of it and by repeatedly bashing them all we are doing is undermining them and hindering our chances at recovery.

Here are a few comments from the piece which sum everything up for me as to how the British public have been hoodwinked and deceived by the media and the politicians (looking at you Ed Miliband) to believing that the Bankers are the sole reason we are in these tough times:

It has become obvious in recent years that the bankers are utterly and unapologetically evil.

Britain needs bankers as much as I need a malignant Tumour

Nice article Sunny. Nailed the bastards. And now for the apologists.

What can you do? What can you say? People really think this. Luckily a comment a few down made me think that there are some in this world who actually know enough to form their own opinions:

Haven’t we got bored of this scapegoat already? Sunny’s argument’s about no changes to banks are plain wrong – they are now over-regulated with contradictory rules being brought in by different regimes – and his analysis ignores reality (not least of which how much the government of the 2000s encouraged the build-up of property-based debt).

Whoever you are ‘chaz1’ I like you and no – it wasn’t me.

The bankers and their industry were part of the problem however they are also a huge part of the solution. Just bashing them non-stop won’t change that. If all the bankers got up and left London for foreign shores overnight the economy would nose-dive into a thoroughly deep and prolonged recession. That is just how it is but of course that doesn’t fit in with the rhetoric that the media and Labour are driving. Labour have to take some responsibility for letting the banks go unregulated throughout the boom times but they have washed their hands of this. They say it is all the bankers fault and until we thrash them to within an inch of their lives then not enough has been done.

It is a shame we all need scapegoats and can’t just bo honest with each other and fix the mess without the bad blood. Sadly that would be all too easy and straightforward. It makes me sad that people will use this for political gain – just like everything else…

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Written by neilmonnery

February 7th, 2012 at 11:30 am

Posted in Politics

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  1. Dear Neil,

    Thank you so much for writing this because if you hadn’t then I’d have had to.

    For all that they wail about how the Coalition have fixed the story that Labour are to blame for the economy, Labour – and Sunny is intimately entwined with the politics of Labour for all he claims to be “independent left” – Labour and the left have worked very very hard to pin all the blame onto “the bankers”. And with quite some success.

    But the truth is that everyone who borrowed money (and that includes the Labour government borrowing it hand over fist) and everyone who enjoyed the housing bubble are as much involved in the causes of the bust as the banks.

    But as you say, it’s so much easier to pick on someone else to blame than it is to mend our ways.

    Richard

    7 Feb 12 at 5:46 pm

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