by Peter Watt
You’ve got to say that the banks are shockingly bad at their own PR. The fact that reckless lending played a significant part in the cataclysmic global downturn didn’t exactly endear them to people.
Obscenely high bonuses that seem at odds with the overall performance of the company don’t help.
And then to top it off they’ve been fiddling rates of interest so that they made bigger profits and created a false sense of their own economic strength! Understandably therefore many people right now wouldn’t spit on a banker if they were on fire.
But in the furore we seem to be forgetting that this is also an industry that employs 1.1 million people in the UK. That contributes 9% of the gross value added in the economy as a whole, generates 7% of all tax receipts (£35.7 billion) and produces a trade surplus.
So the current crisis in our financial sector is a potential crisis for our already fragile economy. We simply cannot afford for this mess to continue, there is too much at stake. It is right therefore that all parties are keen to restore the credibility of the UK’s financial sector.
If people around the world fear that our financial sector is prone to fraud then they will take their money elsewhere. It’s not like moving a factory or an industrial complex; they can simply move their capital with a phone call or click of a mouse.
And if credibility is to be restored or maintained then decisions need to be taken about what the right balance of regulation is and who polices it. And there are the Vickers proposals to implement splitting retail and investment banking. Big issues that need to be sensitively but robustly handled if this vital industry is not to be further harmed.
Instead we have a slanging match between the parties.
The hundreds of thousands of bank workers earning modest wages must be crying into their ledgers.
