What a Load of Bankers

Posted by Colin Harvey Sep 7, 2009

In a week when the BBC is showing a dramatization of the fall of Lehmann Brothers, the investment bank that had a bigger GDP than Pakistan, and the G-20 summit investigates bankers' bonus payments, the issue of what banks actually DO is suddenly centre-stage again.

I'm as baffled anyone why we have to pay have our own resources 'managed' for us. It seems perilously close to a sophisticated form of protection racket to me. I tried reading Robert Peston's 'Who Runs Britain?' but after a stunning autobiographical opening, Peston's narrative bogs down fatally in a quagmire of detail leaving me little the wiser beyond that the rich have got enormously richer under Brown, and that basically he's handed them a printing press, so it's no longer effectively the government running Britain (or -by implication- America or any other political state; the super-rich are a virtual state in themselves).

So I'm enormously grateful to Roger Bootle, over at the Daily Telegraph for identifying both what bankers actually do, and what -admittedly only in his opinion-- is wrong with the financial sector.

Bootle lists six points including the mosts telling, that the banks effectively operate a cartel in setting the prices, and that bankers have so much money that the raising of charges to what are punitive levels to most people have no impact on any bankers who have to pay for themselves.

[The head of the Financial Services Authority, Lord] Turner has been heavily criticised for his suggestion that much of what goes on in financial markets is "socially useless". But...he is partly right. The problem is that the rest of what goes on in the City is socially vital, namely the provision of finance to households and businesses. Moreover...it is not easy to separate one from the other.

It's certainly a more considered reaction than the head of the CBI, who seems intent on accusing anyone critical of bankers as being motivated by 'income envy.'