Mervyn King's interview with the Telegraph shows that the intellectual and emotional gap between the governor of the Bank of England and the UK's big banks is now of almost unimaginable size.
His view of what they do and how they do it is a universe away from their own self-image.
It is where he compares the banks with manufacturers that he is particularly damning.
Many manufacturers, for King, " care deeply about their workforce, about their customers and, above all, are proud of their products". But what about banks? "There isn't that sense of longer-term relationships. There's a different attitude towards customers. Small and medium firms really notice this: they miss the people they know," he says.
The financial industry, he claims, is poisoned by the idea that "if it's possible to make money out of gullible or unsuspecting customers, particularly institutional customers, that is perfectly acceptable". And he contrasts that attitude with decent businesses which "keep a clear vision of who their customers are, and are run by people who don't think they should simply maximise profits next week".
He also returns to his theme of the investment banks as gamblers in a casino, complaining that over the past 25 years, banks have increasingly "taken bets with other people's money" and where the "the rules of the game are that they get bailed out if it all goes wrong".
In the frantic taxpayer-subsidised casino, all trust between the players evaporated: "Financial services don't like the word 'casino', but instruments were created and traded only within the financial community. It was a zero sum game. No one knew which ones were winners when the crisis hit. Everyone became a suspect. Hence, no one would provide liquidity to any of those institutions."
Source: BBC - Peston's Picks: Is entente impossible between governor and banks?
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Well well, isn't that nice for him to say the obvious? It's as if he wasn't Govt of Bank of England for the last few years and did exactly fook all about it.
It seems to me that "independent" BoE just does things that suits current Govt.
His view of what they do and how they do it is a universe away from their own self-image.
It is where he compares the banks with manufacturers that he is particularly damning.
Many manufacturers, for King, " care deeply about their workforce, about their customers and, above all, are proud of their products". But what about banks? "There isn't that sense of longer-term relationships. There's a different attitude towards customers. Small and medium firms really notice this: they miss the people they know," he says.
The financial industry, he claims, is poisoned by the idea that "if it's possible to make money out of gullible or unsuspecting customers, particularly institutional customers, that is perfectly acceptable". And he contrasts that attitude with decent businesses which "keep a clear vision of who their customers are, and are run by people who don't think they should simply maximise profits next week".
He also returns to his theme of the investment banks as gamblers in a casino, complaining that over the past 25 years, banks have increasingly "taken bets with other people's money" and where the "the rules of the game are that they get bailed out if it all goes wrong".
In the frantic taxpayer-subsidised casino, all trust between the players evaporated: "Financial services don't like the word 'casino', but instruments were created and traded only within the financial community. It was a zero sum game. No one knew which ones were winners when the crisis hit. Everyone became a suspect. Hence, no one would provide liquidity to any of those institutions."
Source: BBC - Peston's Picks: Is entente impossible between governor and banks?
---
Well well, isn't that nice for him to say the obvious? It's as if he wasn't Govt of Bank of England for the last few years and did exactly fook all about it.
It seems to me that "independent" BoE just does things that suits current Govt.
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