Well it’s been a long time since I wrote a blog but frankly it’s 12:15 in the evening, I’ve been ill in bed for 3 days and I’m totally bored.  Anyway a few minutes ago I stumbled onto this… http://www.youtube.com/watch?v=oamGnLC6FYY&feature=youtu.be

Ed Miliband’s new wheeze about banking reforms.  Personally I’m not immune at all to the argument that banking needs reform, it absolutely does.  Not only that but most of my clients (CEO’s and Chairman of banks!) can see there’s a need for reform.  Ed is talking about needing new banks and he’s absolutely right, we do.  Not only do politicians and people see it but so do the City, I won’t go into details but there are lots of people I know trying to make this a reality, market pressures will force it to happen.  Where I start to disagree with Ed is how this should happen.

Frankly the last time a politician has been let loose with a bank it was the Reverend Flowers (also Labour) and look where that got us.  I’m sorry but senior politicians of all hues are simply not up to the task of banking reform.  Firstly they’re all as I’ve said before PPE graduate career politicians with no real world experience whatsoever, I wouldn’t trust half of them to run a raffle let alone a major business or reform of the countries largest industry.  Yes of course the bankers have made a shambles of this but that doesn’t mean you throw the baby out with the bathwater.  Banking and financial services in general make up a HUGE proportion of our economy, if you meddle too much then you risk killing the golden goose.  To all the naysayers who will of course pipe up and say well we don’t need all those rich bankers etc please also spare a thought for the millions of others employed either directly or because of the financial services industry in this country.  I don’t think the cashiers at your local Barclays are your enemy.  Financial services is global, if you change the rules to make things too harsh it’s all too easy for them to relocate elsewhere and frankly with loose regulation and lower taxes elsewhere why wouldn’t you?  

The reform has to be done cautiously, by people who understand the banking world and have no axe to grind.  There are plenty of senior bankers out there who are not looking to profit from the sector anymore but have huge knowledge of global financial markets that we can tap to make judicious reform without cutting our nose off to spite our face.  Sir Win Bischoff for instance would make a great elder statesman to do this (yes I’m aware he is now chairing the FRC)

We have great expertise in this country, it’s a sector we excel in, let’s use that knowledge and tap into it.  Let’s not seek revenge for the catastrophe of the past that can only end in future hurt, let’s make sure we build a sustainable model for the future and in doing so retain the City’s position as the biggest financial services centre on the planet. 


(Also as an aside, I’m not sure promoting easy credit, whether to businesses or to people is the best idea, it is what got us into this mess in the first place!  Yes start ups need funds but often that’s better left to private equity than banks, they’re gambling with their own capital and can take greater risks.  I’m rather pleased the banks are being risk averse for a change! Although I’m sure in the next breath Ed can still mention casino banking…)