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The deadliness of the bankers

28 September 2012

AS AN analogy, it takes some beating. Bankers are like Dr Harold Shipman, only worse. The submission from the C of E's Mission and Public Affairs Division (MPA) to the Parliamentary Commission examining banking reform pulls no punches. Having mentioned the homicidal GP, the submission warns against trying to draw too many parallels - but not because this would be unfair to bankers: "The Shipman case was essentially about the inadequacies of the system to pick up and prevent extreme, almost unimaginable behaviour by one individual." In the case of banking, however, the "extreme and criminal behaviour" is systemic. "The question is not whether systems have been adequate to identify and deal with the bad apples but whether the whole orchard needs replanting."

This language reflects the anger that the MPA feels at the depths to which the banking sector has sunk. It is intriguing, though, that the reason for the anger is barely mentioned: that the effects of the recession are felt predominantly by the poor. Since the MPA argues that it deserves to be listened to because of the Church's presence "in every community of England", a better representation of the bankers' victims would have helped.

It is for the Commission to come up with solutions, although the MPA submission expresses disquiet at what has so far been suggested, in particular at the trust that the Government, regulators, and the banking industry are putting in technical solutions, when the problem is so obviously a moral one. A key difficulty, it says, is that nobody can now say what a good bank looks like. The old attributes of discretion, responsibility, and customer service - the elements that once made banking appear such a boring profession - have never been written into any sort of job description or code of practice. The combination of deregulation and the removal of personal contact by modern technology have severed the fundamental link between labour and profit. This is capitalism at its purest, and when governments themselves fail to benefit, while retaining responsibility for losses - the "too big to fail" trap - it is time for the referee to stop the game.

The problem is that the financial institutions have been making themselves immune to intervention. Involved in transactions of ever-increasing complexity (the Libor scandal exposed just one example), the banks rely on their global connections to stay ahead of trouble. There have already been threats to move to another financial centre overseas if the UK Government attempts to toughen its regulatory powers. As the MPA points out, this is now an international crisis requiring an international solution. Yet, nearly five years on from the US sub-prime loan collapse that triggered the present recession, individual governments are still unsure what they are groping towards.


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