Change is in the air and in the FT
In today’s Independent Steve Richards says that, when it comes to banking, ‘change is in the air’.
The slow British revolution that began in 2008 moves a little quicker towards its still vaguely defined dénouement. There is tangible change in the air, but with gusts of wind from the old era that will not blow away. The resignation of Barclays’ chief executive is the latest vivid sign that the old order is crumbling.
To see how far things have changed, it’s worth taking a look at today’s FT comment pages (all behind the pay-wall). Here we find Conservative MP and former Barclays executive Andrea Leadsom writing that:
One significant step in that direction would be taking the opportunity of selling off the now state-owned banks – in smaller “parcels”. This would instantly create potential new challenger banks in Britain. It is something I urge the government to reconsider. I also believe that, in view of the events of recent weeks, George Osborne should revisit his response to the proposals of the Independent Commission on Banking. The chancellor needs to move further and faster.
An obvious start would be to clear out the investment bankers who now run universal banks – Stuart Gulliver at HSBC, Brady Dougan at Credit Suisse, Stephen Hester at RBS – and return to high street banks being run by high street bankers. They may be honourable individuals but, as a group, they symbolise the relentless ascendancy of the securities trading floor.
Today’s two articles come on top of pieces this week from the paper’s John Kay:
There are two main arguments for splitting the utility of retail banking from the trading casino. One is to stop croupiers gambling with house money; the other is the incompatibility of trading and banking cultures. The Vickers commission on UK banking reform addressed the first. It is time to turn to the second.
Yet the government itself has still to grasp fully how much things must change. It is pushing through parliament a half-baked scheme that would in future “ring-fence” the investment banking operations of the banks from their high-street banking operations. This misses the central point: it is the culture of the casino that has done the damage, and it will continue to infect the whole of the banking industry for as long as the two sets of operations operate together.
When articles like this are appearing in the financial paper of record then Steve Richards is certainly on to something – change really is in the air.