We already know that the Government tried to slip out lots of bad news (including crucial evidence of the hardship caused by the Bedroom Tax) in a giant Take out the Trash day before Christmas, but the Financial Conduct Authority used Hogmanay to slip out the fact that it wasn’t going to bother with publishing a review into banking culture. Apparently it “wouldn’t help.” Try telling that to the people who suffered as a result of one of the worst crashes in history.
Tim Farron was on this one straight away and ended up getting quoted pretty widely. He said:
The public are rightly fed up with the banking sector marking its own homework and cutting out anyone with a critical eye. Any hope of change and progress has been dashed, with a very clear return to businesses as usual.
Cosy decisions between the banks and politicians, and a toothless regulator, lead us to one of the biggest financial crashes in living memory. The high risk players in the banks were left to gamble with public money, with little care for what may happen.
When the banking sector faces trouble, British livelihoods are on the line. To do anything other than operate with complete transparency, and with proper checks and balances, will be reckless and will undermine public trust.
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5 Comments
This is fine by Tim, given the current climate, but the longer-term battle needs to be won in defending against high levels of regulation.
I get the impression that in financial services some regulatory proposals and policies are only made because it is in the private sector. If we nationalised the whole sector they would still have to make money and they would end up easing off on the regulation too, but because they are privately owned they feel they can’t ease off, but there is no reason why some of the proposals involving the sales process need to be made.
I can understand price controls, even though I don’t really like them, but restricting choice in services and getting rid of cheaper and riskier types of transactions seem to only be getting made in order to say people are hitting the banks. Price discrimination against richer clients also needs to be effectively legalised, because at the moment the only way to do this is via commission and that leads to miss-selling.
How WOULD it help Tim?
I know everyone loves a bit of banker banshing for some stress relief, but as a practical step what would this proposed review have actually achieved? Comparing organisations disparate and varied?
I like Tim, I thin broadly he is taking us in the right direction. He is getting annoyingly enamoured of puff piece superficial statements for my liking though.
This is an excellent piece from Tim, we need to all get behind it and make sure our voice is heard in the media. Senior Executives and Directors in the Financial Sector were allowed to get away with far too much under both Labour and the Tories and have never been called to account for their repeated cheating of the system. We had a chance to do something in coalition, but the Tories would never allow it (other than this review which they have now canned).
I remember a fringe event at the conference in Sheffield in March 2011, which basically said that we had taken a hammering for the coalition in the polls, but that the bankers were still perceived by many as the source of the problem, and that we needed to show we were more than just a bunch of little Tories by taking the attack to the bankers for all the things they had done. Sadly this approach was never taken up by the leadership, and an opportunity was lost.
We mustn’t make the same mistake again.
Who needs to bash the bankers? They are themselves the masters of that art: “This dwarfs by orders of magnitude any other scandal in the history of the markets” – Andrew Lo Professor of Finance at MIT on the LIBOR scandal.
In the aftermath of the LIBOR and Forex scandals it is quite ridiculous that a review into the “culture” of The City is shelved. The collusion involved in this and the Forex scandal go to the heart of how The City conducts itself. Absolute transparency is an essential prerequisite for rehabilitation.
The link to the BBC site makes the interesting point that HSBC (2 doors down the street from the FCA at Canary Wharf) have been making noises about relocating their headquarters to Hong Kong. Osborne apparently thinks that they’re upset that they aren’t appreciated. I suspect that they are more upset by the bank levy, the corporation tax hike, the massive fines for benchmark manipulation and the regulatory regime.
A welcome change of emphasis by Tim – though mentioning the bedroom tax in the post invites the boomerang of which party voted for it when it was first introduced . (To be fair, Tim didn’t)..
During the last parliament it was tedious to hear Liberal Democrat Ministers parroting the Tories refrain to blame Labour for the economic crash when it patently began with the US and UK banks greedy misjudgements and misbehaviour.