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Tag: banking crisis

Would MPs back a law that sees them go to jail for running the country in a ‘reckless manner?’

Look I know everyone hates bankers. Thanks to a delightful mixture of media and political scapegoating bankers are now as beloved as Joe Kinnear in the North East. However at some point surely some common sense has to breakout and we as a nation actually stand up and say ‘No, no Mr Politician and Mr Media Mogul. This is enough of the lambasting of the banking industry and can you please move on to actually dealing with the issues of the day in a grown-up manner.’ I suspect though that I’m pissing into the wind on this. As I always seem to do.

Anyway what is this latest tidbit of absolute bollocks that Labour MPs want to bring in and the coalition certainly don’t seem opposed to? Oh yes jailing bankers. Pur-lease.

Let me at this point quote from the Telegraph:

Andrew Tyrie MP, the chairman of the Commission on Banking Standards, warned that bankers had escaped “personal responsibility” for their actions, and said that drastic reforms were the only way to restore trust in banks.

Personal Responsibility. An interesting term. I do presume that said MP (and in turn all senior MPs) back a law to jail senior politicians who screw things up? Surely if they think bankers should pay in terms of jail time for making errors that force the economy to plunge then there is no doubt that they should as well? Norman Lamont’s performance on Black Wednesday cost this country £3.3bn – I’m sure that is worth a few years in the slammer under this law?

All the Labour MPs who apparently let the bankers do what they wanted that led to this recent recession must take some responsibility, yes? They ran their government in a reckless manner by not overseeing the banking industry strongly enough. They saw the good times and let them do what they liked believing that the good times couldn’t stop. I’m pretty sure sticking your head in the sand isn’t a defence under the law.

Now the thing is I wouldn’t advocate this law. Running a country and a bank and in turn any giant multi-national is probably a rather tricky job and mistakes will be made. Things will happen that you couldn’t see and outside influences will have a significant impact on how you perform which are totally out of your control. However this proposal in the Banking Commission report isn’t exactly viable and in my opinion is solely a political cheap shot knowing that the public will lap it up.

Also shall we look at it this way. The government are telling banks that they need to lend more and get money circulating in one breathe but in the next they are saying they want to send bankers to jail who give out plenty of loans that in turn can’t be repaid as that’ll be running a bank in a reckless manner. Can you see the irony?

If you are a senior banker you basically shut the purse strings with the public and deal solely with large companies and countries where the risks are absolutely minimal. Why would they deal with risky investments like lending the average person money for their business or for a mortgage? It would make no sense. No sense whatsoever considering the money they make from the public is vastly inferior to what they can make from other avenues but is in fact one of their riskier investments. Did the world’s economies stall and tank because of bad mortgages? No but they were certainly a significant catalyst.

If the government wants to bring in a criminal offence called ‘in hindsight you cocked up’ then so be it – as long as they do exactly the same to their decisions in the House of Commons and then spread it to the House of Lords then I’ll be fine with it. Just putting a provision in place to criminalise one section of the economy who make poor decisions and not applying it to others is just wrong. However the best thing to do is ignore this proposal but of course deep down we all know they won’t as the banking industry and bankers have become the poster boy/girl for public and media anger about the economy.

Jailing bankers in hindsight of what happened. What absolute bollocks. sadly though this would certainly up any governments approval rating. At this point I shall retire and despair.

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Lib Dem Baroness Ros Scott has caused me to blow a gasket

Oh Lib Dems what are you doing to me? I sit her in my toothpaste stained jogging bottoms and a t-shirt saying ‘Brain Loading…47% Please Wait’ and feeling good playing Bejeweled Blitz and then I see a tweet and my anger soars to record (well that’s a lie – nowhere near record levels but still I’m pretty pissed off) and why I hear you ask? Well because of this tweet from a Liberal Democrat Peer…

Baroness Ros Tweet
Lib Dems…the grown-up party – or so I thought…

It seems pretty innocuous but still, ‘We were told if we didn’t pay huge bonuses to bankers they would all go abroad. And the problem with that is? ‘ I think I need to respond for what the problem with that might be.

First of all the city is actually a vital part of our economy. As much as it is hard to say in this day and age when everyone wants to crush the bankers and the banks as I have blogged about on numerous occasions before, I think it is fair to say that the city helped us get into this mess but that without a strong city it is highly unlikely that we are going to get out of it. We can’t just kill the city because all that will do is stunt growth. It isn’t rocket science but it seems like it might be for some people.

The winner of the Best New Lib Dem Blog last year Richard Morris agrees with the Baroness:

Richard Morris Tweet
Richard agrees with the Baroness…

@neilmonnery @baronessros of course you are presuminging (sic) that A)they would go & b)we wouldn’t find anyone equally ‘talented’ to replace them

Well first of all I think the presumption that bankers might leave the UK if they get offered more money overseas is a fairly safe one to presume. I know – and I repeat – I know – that this is already happening. People that I know are losing staff members because their bonus cheque for the last financial year was shall we say lacking. These are people that actually make money for the banks – and in turn therefore make money fr the UK tax payer – but they are going because they can earn more money elsewhere.

I also think it is fair to say that this happens in all forms of life. People will move on if they get a better pay packet elsewhere. It is why I can never understand why football fans get so worked up when a player leaves for another club and a huge pay increase. People go where the money is and everyone has their families to worry about and such. Even if they don’t then why wouldn’t they take more money to do a similar job? You would as would I. If someone offered me a job to do the exact same as I was doing today for a lot more dosh then I’d be off like a shot. We all would.

So I think we can safely say that the very best will move on – and we know they are the very best because other banks will want to hire them. The people who are crap and make no money won’t be highly sought after. This is how it works. That is purely logical. If you are good at your job then you will have more doors open to you to move onwards and upwards. If you stink then you try to tread water and stay where you are.

As for presuming that it would be hard to find people equally talented enough to replace them, well this one is simple. If they wanted to work in the banking sector then they already would. Rightly or wrongly the banking sector is motivated by one thing – money. If you work in the city then it is highly you like money – and a lot of it. You may also like women and drugs but these aren’t as big of a prerequisite as liking money. No-one gets into the banking industry because they want to save the world. They get into it because they are clever enough to and want to live a good lifestyle.

People say that they want the bonus culture slashed because it is obscene that bankers get huge bonuses when they do a bad job but what about doing a good job? If regulations are put in place in the K (and for UK based firms operating overseas) that reduce the bonus culture then all it will succeed in doing is force the good workers who make money to leave. They won’t stay and enjoy seeing their salaries culled they will just move on.

Going back to the original tweet what is the problem with all the people who make money going overseas and stopping making money for UK firms who employ people in the UK and pay plenty of tax in the UK (both the company and the employees) well let me think…I think I may have showed exactly the problem in that previous sentence.

Look I know it’s cool to bash the bankers. It is cool to see them as a collective and they are all as bad as each other. Well one thing I have learned in life is not to tar everyone with the same brush. Not all redheads are fiery and gorgeous (although most are), not all fat people are jolly, not all Tories were born with a silver spoon, not all Labour voters think pie & mash is the best meal ever invented, not all my online dating experiences have been horrific (well this one is close) but yes you get what I mean.

Yes the bankers who were dishonest and screwed things up should face the consequences but should those who have done and continue to do a good job face the same sanctions? Morally of course they don’t. You have to be an idiot (or a member of #ukuncut) to believe such nonsense but putting aside the moral argument it doesn’t make sense from a financial standpoint going forward either.

Like it or not many bankers are terrific at their job and earn their bonuses. If a department earns a company say £50million profit then what is wrong with a percentage of that money going to the people who helped earn the money? There are two things that motivate most people and money is the big one and the other is the promise of sex. They are the things that will motivate most people so if not money then do we propose lots of free sex on tap for good work? I’m not sure that will go down well in some departments so if it’s neither money or sex then what motivation do bankers have to work those extra hours and get business done? Not a great deal.

Some bankers are bad. Many more aren’t. Until we can get our stupid heads around this fact then bankers aren’t going to fare well. The sad fact that both the media and the government (both sides of the house) are willing to throw the banking industry under the bus because it fits in with what the electorate want to hear is depressing and when Lib Dem peers think that the bankers are one entity – and in so think they are all bad and wouldn’t be missed – then even the Lib Dems are starting to lose their sense of the real world.

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Today is Bankers Bonus Day at the Lloyds Banking Group. Are all bankers evil? Discuss…

As some of you may know bankers bonuses has become the most important buzzword in politics. It is tantamount to political suicide to even think about defending the bankers let alone actually say it out loud. Well folks unsurprisingly I’m not one to follow the rules and actually have a brain of my own so lets look at what this actually means and what will happen next.

The Lloyds Banking Group is 41% owned by us – the people. HM Treasury holds that stake in the company which is well known on the British High Street with LLoyds TSB, Halifax and the Bank of Scotland being part of the company. So we have a very real reason to scrutinise what they do.

We have no issues with the bonus culture in other industries but then I suppose we don’t have a financial stake in them so that parallel in unwarranted. So the big question is what do we the public get for in-part paying these people vast sums of money.

Well the bonus culture is here to stay in banking. The UK government cannot stop bonuses in privately held firms and banks based overseas. These companies will still pay top dollar with huge bonuses should they reach set targets so no point fretting over the bonus culture at large. Bonuses are not evil. Many of us have bonuses written into our work related contracts reliant on our good work and/or good profits for the company as a whole. So I think it would be wrong to say that bonuses themselves are an evil product.

The question is whether bankers earn their bonuses. I’m going to tell you a shocking revelation now that neither any politician nor anyone in the media wants you to know. This is a trade secret that is out there but is kept away from the public. Are you ready for it…?

Not all bankers are evil.

I know. Shocking huh but that is actually the truth of the matter. There is another big secret out there. Are you ready for this one…?

Not every banker was involved in bad banking practices that led to the financial difficulties that we are in.

I know. Crazy. We have been led to believe that they all live in their ivory towers using £50 notes as toilet paper laughing at all of us using regular toilet paper but no, that actually isn’t 100% accurate.

Are bankers bonuses too high? Probably but they are dictated by market forces. Is Manchester City offering Robin van Persie a reported £210k per week obscene? Yes but market forces dictate that he is worth that much. Employees are worth whatever an employer is willing to pay them.

Is a new iPhone worth £499? That depends but people are willing to pay them at that price so that is why Apple chooses to market them at that figure. If they believed they would get as many sales at £599 or £699 or £799 then they would sell them at those prices. The whole economy is driven by market forces.

So lets go back to the Lloyds Banking Group. Today I know people will hand in their notice at the group. They will have seen that their pay packets are not brimming half as much as they were. They will move on to pastures new because the UK banking industry – certainly the banks that are part owned by HM Treasury have slashed the bonus pot. It has been obliterated in all honesty. These people will be able to get far more money elsewhere and leave.

Now I know most people will be yelling ‘why should we care?’ but the truth of the matter is really rather simple. If there is success in the UK Banking sector then we all benefit. If these banks are profitable then we make money. Also the more successful they are the higher the share price and the easier they are to sell on and move them out of public ownership again.

For example I have been told of a man whose department made £40million last year for the Treasury. He led the department into a far better place through good management and his good work has meant that we the taxpayer benefit to the tune of £40million. Seems like he’s done a pretty darn good job then for all of us. His reward? To lose 90% of his pay compared to a year ago. So for making us tonnes of money we are penalising him in his pocket. This has nothing to do with a Bankers Bonus Tax but to do with just slashing his money.

As a whole one large section of the group will have more than doubled its profits in the past year. They are in a far better financial situation than they have been for years. They are generating large profits and income for the government and for this the whole bonus pot has been slashed by just over 75%. So for doing a far better job they’ll be getting paid a whole lot less.

That doesn’t seem like a great bit of business to me.

The problem is the most talented individuals who do it right and generate the wealth for HM Treasury will move on to pastures new where they can get paid what they feel they deserve. If yu are making £40million then you’ll feel you are entitled to a £1million bonus for example. Is that better or worse for HM Treasury than generating £20million of income and getting £100k as a bonus Well lets look at the math.

£40million – £1million = £39million revenue for HM Treasury.

£20million – £100k = £19.9million revenue for HM Treasury.

Yes. Just as I thought. It pays to have the best people as they will generate enough income for them to get the top bonuses. The top people will go where the money is. I think we can all agree that is fair and is just like how we all do it. If you or I was offered more money to do the same job somewhere else we’d probably take it. Nothing wrong with that so the bankers will do the same.

The problem with this is by doing so it will mean that the top people will not be working in the UK Banking industry. This means that less money is made by these companies therefore they’ll pay in less tax to HM Treasury. They’ll be employing less qualified staff who’ll be earning less so will be taxed on their income less and in turn spend less in the economy. As for the banks that we hold shares in they’ll be making less profits and be less commercially attractive to potential buyers and investors going forward because I think we can all agree that the best people will make the most money and generate the best profits for a company.

The problem with the banking industry was two-fold. They got too cocky and took their eye off the ball as they were so unregulated that people could take stupid risks and that people were rewarded for doing a bad job. Bonuses should be a reward for doing a good job.

The first point has been fixed as banks around the globe have got their act together. Banks now have far more liquidity than they did before. This is why Lehman Brothers went down. It wasn’t because it was a poorly run business but because all of their assets were tied up in medium and long term ventures. These days banks have those liquid assets to hand. Risks are taken less frequently because they are monitored much more closely and the bad practices of the early part of the last decade have been consigned to the dustbin.

Do we really want to be lazy and tar al bankers with the same brush? Is that what we do nowadays? We get an idea implanted in our minds and use that scapegoat even when it isn’t reasonable to do so?

Yes there is no doubt that some banks and some bankers made some pretty bad decisions that led to a global recession. However not all banks and not all bankers were part of that so why should they be penalised and bad mouthed for the sins of others?

If you had a son or a daughter who was a thief would that in turn made you a thief and should you face the same ridicule? If your son or daughter had to wear an electronic tag and had to abide by a curfew for being a thief should you have to do it as well because you are related to them?

The simple answer is no.

We are all individuals and should be treated as such.

This goes for bankers just as it does you or I. If Banker A gets a bigger bonus than Banker B but generates more profits then that seems fine to me. As long as people aren’t rewarded for doing a bad job then surely we should all be ok with it?

Bashing the bankers is safe political ground at the moment because we love a scapegoat. Sadly the second scapegoat are immigrants which makes my blood boil. Yet again as a whole we like to tar everyone with the same brush and people have turned on these people because they need a scapegoat.

Don’t punish people for the sins of others. To me that is simple basic etiquette and how it should be.

One day I hope we can have an honest debate about everything but sadly in the political world we live in that isn’t possible at this juncture. This is one thing I wish that we could change. For today though I’ll continue to write my thoughts down for the handful of people who’ll get around to reading them.

My dream is to live in a world where we get all the facts and can have an honest debate on how to interpret them and not just think how we are told. That is how I feel sometimes as to the world we live in is not that. Politicians and the media will drive home a story and use it to enhance their own ends and not report it how it is meant to be. This to me is a sad sad situation…

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

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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The Budget and Debt Crisis Explained…

Here is the budget and debt crisis explained in plain English…

The Budget Crisis Explained in Plain English
The Budget Crisis Explained

The author makes a fairly valid point…

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‘If Europe lets the Euro fail it wont stop there’ – The Banker Interview

I may have been quiet recently but that doesn’t mean I wasn’t very busy behind the scenes working on things for the blog (actually it means my PC is in the coldest room in the apartment and I haven’t felt like writing too much recently) however over the weekend I was granted an interview with a senior banker at a major bank who spoke to me on the condition of anonymity and we spoke about several issues firstly the Euro.

I put it to the banker that despite the people in the UK clearly not giving two hoots about the Euro and in fact deep down wanting it to fail that if the Eurozone goes down like Boris Johnson is predicting then it will be trouble for all of us. His first terse response was quite simple, ‘start stashing all your cash in your mattress. If it goes in an uncontrolled fashion, we are all buggered‘. Not exactly the heart-warming way to start a conversation but he thinks it is clear that the future of the Euro as a viable currency is linked to the stability of the financial sector across the Globe.

Next I asked him about the recent downgrading of French banks and whether that makes him and his bank more uneasy about the situation, ‘The downgrade is becoming irrelevant – all that impacts is funding the credit rating agencies are essentially morally bankrupt – no idea why the world listens to them. We are a great example. We have more capital, more funding, more liquidity, more cash than we did when we were a AAA bank – and yet we are now barely AA. The rules have changed and the rating agencies are acting like they think no one has noticed.

So credit ratings are not as important as the media are leading us to believe. His bank is clearly in a far better financial state than it was in 2007 when the banking crisis started but because of a lack of confidence in the bank they are facing the consequences. Liquidity is everything at the moment as we saw when Lehman Brothers collapsed. Speaking of Lehman Brothers…

The parallel to draw for me is the unintended consequences – when we let Lehman fail, we thought we were letting the market know that there was no one too big to fail. What governments still don’t seem to realise is that the markets are not in their control, and that they will continue to seek the weakest link. If Europe lets the Euro fail it won’t stop there and just because we are outside the Euro, (it) doesn’t mean we won’t suffer the full impact of (the) unintended consequences. I really don’t know how we stop this circle – but essentially the markets are saying they want risk free investment – that is ok, but they need to accept that risk free returns aren’t very exciting. So our share price is what 25p? So we are being punished for carrying too much risk, but if we dont create income, dont create returns – they sell our stock anyway – so (we are) damned if we do, damned if we don’t.’

It seemed to me that he was getting at confidence being the primary reason for the collapse and not in fact any other factors, ‘am I right in hypothesising that everything seems to be linked to confidence. No-one has any and because of that nothing good can happen‘ I muse. ‘absolutely – cant stress that enough‘ comes the reply. So it is clear to him that it all comes down to how governments around the World deal with the crisis.

On how and what governments do he says thus, ‘It is why everyone needs to be so careful – actions can create confidence, but markets need to be confident that actions will be carried out. So when some faceless beaureacrat says something contradictory – no matter how low level they are, market jumps on it as evidence that actions wont be completed‘. Talk is cheap and actions speak louder than words. David Cameron has spoken what the people of the UK want to hear and we have seen that in a six point bounce in the polls over the weekend. The British people are in general not Euro-loving folk but even more so they don’t want our money being thrown at the Euro-zone trying to save it. However one thing the majority of people in Great Britain do not have is a grasp of the upper echelons of economics and how the Euro-zone impacts not only those in it but also those around it and the state of the financial markets around the Globe.

We again drift back to Lehman Brothers and the whole ‘too big to fail’ issue when I say about the only reason the bank when down was because of a lack of liquidity, ‘Yep – for banks liquidity is everything – everything. What does it matter if I have AAA mortgages that mature in 20 years if I have to pay back the money tomorrow? I won’t be about in 20 years to collect on the AAA mortgages. if I don’t make that payment tomorrow and in the good old days, everyone knew that XXX bank would still be here in 20 years, so lend money for that long now, tell me a bank that you would be shocked by if it went bust? So when governments are out there saying no bank is too big too fail… well if that is true, why should I lend them money?’

So I offer up the ideal that everyone now only wants safe investments, ‘Yep – which is fine, but people dont seem to see the link – I have a 25 year mortgage with Barclay’s. if Barclay’s can’t guarantee they will have funding for that long, why would they give me a mortgage for that long? So a mortgage becomes a ten year loan, who can afford to pay off their mortgage over 10 years? So home prices collapse…and I mean really collapse. So everyone owes so much more – is that the banks fault or your fault? And if we are saying it is the banks fault, then don’t complain when they say to the next customer – we need a 40% – 50% deposit and if they do that (then) house prices collapse… (it’s a) vicious circle‘.

Not looking great is it? Next I move steer the conversation towards politics as Labour with their ‘Bankers Bonus Tax’ and plethora of other ideas that essentially shifts all the blame on to the bankers and the banking sector for the past few years of instability is a bugbear of mine. The senior banker tells me quite bluntly, ‘If all the bad is laid at our feet, then all the good from the twenty years previous should be on us as well‘. You have to say he makes a pretty good point. The banking sector was the driving force behind the boom from the mid 90s through to 2007. The World’s economy now has the financial sector at heart and not manufacturing however back away from the narrative and return again to the banker…

If you think of the politicians who said they had beaten boom and bust – nonsense. We (just) had a long time without it and people dont seem to know how to respond we live in a society where we want everything now – that is a general issue – and so we want all our problems solved now – sometimes solutions take time because we create a solution today and it hasn’t worked by tomorrow doesn’t mean it has failed‘.

One thing is clear throughout this interview and that is one of frustration. Now frustration directed at the banks but with how they are being portrayed both by politicians and by the media. ‘Bankers’ has become a buzz word both in the rooms of the media and in the hallows of parliament. The people of the UK think that the bankers caused the mess and should pay to get us out of this mess but the issue is clearly they aren’t being allowed to do what they have to do. The problem is that the financial sector is linked too closely to the government and when the government keep talking about how bad things are and how much worse it could get all it does it dent confidence.

Speaking with regards to the Euro Accord that we didn’t sign up to last week I made it clear that my fear is that it isn’t legally binding. Countries can walk away from this deal if they think it will help them. In times of crisis we all know people will protect themselves first and foremost and will screw over anyone else as long as they are safe. ‘That is fair – (it) needs to be made into a treaty – and if Britain is on the outside of that so be it. I am a great believer in the single market, but everything beyond that is a stupid political stretch. There was never a need for a single currency – unless you do full economic union it was destined to create the pressures we are seeing in bad times. Europe has always had a democratic deficit, you can’t hide that behind an economic union‘.

I put forward my case on the single currency being a vanity project from certain areas of Europe and I think it is fair to say he agreed, ‘I think European leaders have a single Europe as a vanity project – they see a single Europe as the ultimate outcome and the single currency was a way of helping deliver it. There is a psychological element that I don’t know that Britain gets – our country was never invaded, many of theirs were. A single peaceful Europe is a great goal particularly if you were on the receiving end

It is clear we are speaking the same language as we both think the ultimate goal was to create a ‘United States of Europe’ but the feasibility of this was always far too flung to work. Would a Frenchman be happy to be led by a German? Would a British leader of a united Europe speak for the people of Greece? There is too much distinct water under the bridge for that to happen. The United States works because it is a new country without that rich history. The people of New Mexico and of New York are very different but they don’t have centuries of hate underneath them. Also they speak the same language. I know many American citizens only speak Soanish but that is different to the tens of languages spoken throughout Europe.

I ask how he thought the people of Britain would react to having a German leader? ‘We are all humans – Britain … German… it is just a label. How could a women ever be led by a man…it is just a label. If I can tell you how I can make your life better, and you believe me, you would let me lead, it wouldn’t matter if I was man, woman, child, German, Spaniard… but you would have to believe me and (the) media in Britain would certainly make it very, very hard for anyone other than a Britain… but then if you had told an Englishman in 1966 that an Italian or a Swede would manage England footie team they would have laughed, so who knows.’

Of course the football decisions weren’t put to a vote and I’m sure had it been then neither Sven or Fabio would ever have got the job (although bizarrely I think Martin O’Neill was the nations choice when Fabio got the job so who knows. I say that people are becoming more intolerant and he jumps in, ‘for some reason despite things getting better and better, we live in more fear – if you want to blog about something, ask why we think things are worse, when they are actually better than ever we live longer, in better quality, than we ever have. Life is so much easier than it has ever been and yet we look for the negative in pretty much everything and ignore the good – even immigration – we look at it as a negative – yet every person who wants to immigrate to your country is sending the biggest compliment they can – they like the way of life so much, the opportunities offered so much they are willing to leave home behind yet all we see is – they want our benefits…

This is a huge issue I have. I am very much pro-immigration as I believe we have the rights to live and work where we see fit. Yes the media are right and there are some people who come to this country for the wrong reason however those people are not in the majority and they are a very small minority. What gives me more of a right to live in the UK compared to others who weren’t born in this country? In my opinion not a lot. However all I ever read in the newspapers is how awful immigration is and going back to two earlier points it once again shows how the media have an impact on what happens – they are causing trouble with immigration because they only ever report the negative aspects of it and also how when times get tricky people look out for themselves a whole lot more than they did before. The Polish community were welcomed when they first came over here to do all the jobs we didn’t want but now times are hard the general consensus is that they are ‘coming over here nicking all our jobs’ whereas the truth is they came over here to do all the jobs we didn’t want to do.

So to sum up it seems pretty clear that this Prime Minister has an issue that is nagging away and jawing at him daily. He has to weigh up the feelings of the people he represents with those of doing the right thing for the economy. The people he represents do not have the full facts laid out in front of them therefore they cannot make a totally informed decision. However they also want immediate results and they are influenced heavily by the media who are at best xenophobic to the extreme when it comes to Europe on a political level.

I don’t vote for a person or a political party to do what I want them to do. I vote for them as I think they will make the best choices for me on my behalf. I am not well informed on every issue (I’m not well informed on many issues) but these people are. We elect them to be informed and make the right decisions for the people they represent. David Cameron used the veto which may or may not have been the right decision, that I do not know. What I do know is our economy is bound to that of the Euro and the single market. If one or both goes then the ripples of discontent around the Globe will turn into earthquakes and tsunamis in the financial sector and that will effect us all.

What it would mean is basically cash is king and those with it will be fine. Those without it will be left floundering as credit for any reason will become nearly impossible to get. Saving the Euro and the single market is not about bailing out Europe but it is about saving ourselves. The collapse of either would doom the less well off for generations to come. The Tories traditionally wouldn’t mind that but the concious of them would surely not want to see the gap between the haves and have nots increase to record levels surely?

It is all rather worrying that a Prime Minister might put his own electability ahead of the future of the people he represents. I know it must be hard to marry the two voices in his head from opposite directions as to what is more important, doing what is right and doing what the people want. Sometimes these two voices are polar opposite but he has been elected to represent the people of the UK and not to speak for them. There is a succinct difference.

No-one said being Prime Minister was ever going to be easy…

I thank the banker for his time and he heads off to a gym for a workout. I head off to a chip shop for some dinner. We live very different lives on more than one level so it seems…

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