Saturday, 5 March 2011

Blessed are the bankers...

Banks that are "too big to fail" have no place in a market economy. So says Bank of England governor Mervyn King. A "spokesperson" for the banking industry offers her "take".

"I have no personal interest in this debate - not directly, at least - but I speak on behalf of certain men and women the world over who are misunderstood, vilified, perhaps even abused. I speak for those who have no voice - precisely because they think and transact only in numbers. I speak for those once considered key to the economic wealth and well-being of this nation, but who now, through no fault of their own, have fallen on hard times. I refer, of course, to the bankers.

"Now, when I say "hard times", I speak not of such trifles as money in the bank, cars in the garage, number of houses spread round the globe. No, what concerns me far more is the thorny issue of reputation. For as we all know, in this, as in any other world, reputation means far more to ordinary men and women than any number of villas in Tuscany or Provence or the Caribbean, than any number of horses in the paddock, than any number of Porsches in the garage, or indeed any number of dollars in the various off-shore accounts. For reputation is that without which (according to certain philosophers) men cannot truly be men (unless they're so flush they don't give a damn). And is it not time we allowed bankers, once more, to take back their reputations?

"The Bank of England governor Mervyn King suggested today that the banking industry has not reformed since the bad old days of 2008. He claimed that structurally it is much the way it was when it "almost destroyed the entire fabric of Western society" (whatever he means by "fabric"). But nothing could be further from the truth.

"The banking industry has changed considerably in recent months, both structurally and otherwise. Banks have a wonderful new range of structured products on offer. No more "collateralised debt obligations" or CDOs as some jesters still refer to them. In their place we've introduced "collateralised vulture re-structure funds", "re-collateralised quantitative-easing obligations", "de-collateralised sub-prime re-purchase profits-only structured investment obligations", "multi-collateralised structured inflation no-loss winner-takes-all re-obligations", "quasi-collateralised de-structured off-shore multi-obligation obligations", and, most important of all, "re-balanced and un-reconstructed massive-bonus re-newal obligations".

"So please don't tell me the banking industry hasn't changed! Don't tell me it hasn't developed new structures. Take one look at the formidable range of structured products on offer and then, and only then, look me in the eye (when my eye has stopped shifting) and tell me banking hasn't changed nor re-structured!

"And finally, can I ask one last thing: What more do you want of us? The shirts from our backs? The bonuses from our bank accounts? The Porsches from our garages? Is ultimately what you want from us (or rather, from these bankers to whom I refer and simply represent) nothing less than those very reputations they have proudly held, and have indeed deserved to hold, through time immemorial?

"Is that what you really really want?"

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