Vince Won't Quit, Mark My Words
Jerry Hayes says that Vince Cable and George Osborne are at one on banking reform.
12 Sep 2011, 11:50
Vince Won't Quit
Call me an old cynic, but I don’t believe a word of it. This is nothing more than classic good cop bad cop tactics. Firstly, the Vickers Commission was jointly set up by both Osborne and Cable and it is pretty obvious what needs to be done. There has to be some sort of separation between retail and wholesale banking or else the taxpayer will be forced to pick up the tab yet again for the excesses of those who think that they truly are The Masters of the Universe. And as Cable succinctly put in his piece, “ the government knows what the public expects from our banking system: an end to feast or famine in lending to solvent businesses and families and respectful treatment of customers in a competitive and properly regulated market place”. This will happen. The political question is when and precisely how.
But those you are in awe of our bankers, please time to read Alastair Darling’s book about the collapse of the banks. The sheer arrogance of these greedy and incompetent people beggars belief and the utter distain that they have for everybody else even when billions of pounds worth of our money was being handed out is quite shocking. Most of them couldn’t accept that there was a long term problem. Even when Darling had given them the only deal that would save them and the system, namely £50bn, without which our world would grind to a halt, they still squabbled, biting and scratching like ferrets in a sack trying to save their own miserable skins. If they had not been bludgeoned into agreement ATMs would not have worked and we wouldn’t have been able to use credit or debit cards. And the markets had to be reassured by 7am the next morning.
“Panic was setting in as they felt that they could not get a deal they could live with. At about 11 o’clock it was apparent that some of the chief executives were putting up a last stand fight. I called them back into my room and said that of course we could talk about the detail, but tonight they had to accept the key proposals. I realised that as long as I was there they would think we were open to negotiation, so I said that I was going to bed at 1 o’clock and wasn’t going to be called before 5am and then only if it was to approve the announcement. I told my private secretaries that they would probably give in once I have gone and said goodnight”.
The truth of the matter is that bankers have shown no contrition for their past sins, nor any sign that they will behave responsibly in the future. In the light of how they behaved in the past I wouldn’t believe a word that they say, for instance the dire warning that they would not be able to lend to small business if there was separation between retail and wholesale. And as for Barlclays Bob Diamond threatening to take his business elsewhere, well matey you’d have done that anyway if you thought you could make a cheaper buck somewhere else. And that’s another problem, the great old names like Barclays and RBS have become so international that they don’t regard themselves as British anymore.
So what will happen? Will they’ll be an almighty row? Will Vince storm out? Of course not. If that Mail on Sunday piece wasn’t approved by Number 10 I’ll shave off my beard. There is no way that Cameron nor Osborne want to be seen as in the bankers pockets. The devil will be in the detail. Well, as Darling said to them at the last spat, by all means talk about the detail but they must agree the key proposals. Sadly these guys are on such a different planet that brute force is the only language that they understand. Now it’s George’s turn to get out his todger.
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Jerry Hayes
Jerry Hayes is a former Conservative MP and leading barrister defending and prosecuting high profile cases
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Comments (2)
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What us very interesting is to consider the parallels between the banking debt crisis and the sovereign debt crisis.
They are both about debt mismanagement.
Both banks and Governments are very big. Some banks are bigger than Governments.
Both banks and Euro Governments operate independently but are dependent on each other.
Both banks and Governments have protection schemes costing 10/100s of billions of pounds of tax payers money.
Both banks and Governments have defaulted, come close to default or are about to default and have been bailed out by tax payers.
So my statement is that you cannot hold the position that banks need to be ring fenced but Governments don't and visa versa. If you believe that banks should be ring fenced you also have to believe that the Euro needs to be broken up.
I believe both the banks need to be ring fenced and the Euro needs to be broken up. I worked in dedicates at HSBC during the crash - the one big bank who managed itself properly. I now work in a hedge fund and closely observe Euro finances.
So what about Vince Cable. He seems to hold contradictory positions. He thinks banks should be ring fenced because they are too big and are part of a interconnected system and will cost tax payers billions BUT apparently countries in the Euro are not EVEN through they patently are.
What's interesting about this parallel is that it will expose the lack of simple intellectual integrity of many politicians. People from the left tend to luv the Euro and bash banks and people from the right tend to bash the Euro and luv banks. However what is important is not the political history but the current system and realising that both the Euro and banks are broken because they were both too big and too brittle.
So If you hold contradictory positions I hope you have integrity and will change one position or the other.
12/09/2011 22:33That, Robin, is a very interesting argument. Not sure I entirely agree, but if you flesh it out in a piece you might persuade me!
13/09/2011 08:40