Speaking of Keynes, John Maynard argued the definition of a good banker is one who manages to time his ruin to coincide with that of all his peers so he does not get singled out for blame.
Andrew Bailey, the new head of the Prudential Regulatory Authority, offered some support to that cynical interpretation of the profession's survival instincts while giving evidence to Andrew Tyrie's Banking Standards Committee this week.
Mr Bailey noted that in the wake of the Barings collapse in 1995 senior directors were disqualified under the Companies Act. But no one since the present financial credit fiasco – not even Fred Goodwin – has been similarly disqualified. "Why not?" Mr Bailey asked the committee in a rhetorical fashion. "I don't know the answer." Safety in numbers, as Keynes observed, is the likely reason. But it's hardly a satisfactory one for the public which is suffering from the consequences of the actions of these greedy and incompetent individuals.
So what to do? The UK regulator can only ban someone from working in the industry if they have broken a specific financial regulation. Disqualifying someone because they have proved themselves useless enough to destroy a bank under the provisions of the Companies Act is a job for Vince Cable's Business Department. Mr Bailey apparently feels the Government should pull its finger out and start striking off the multiple culprits of the 2008 disaster. Sir Mervyn King said this week that the great lesson of the crisis is that politicians need to start backing regulators unequivocally. Over to you then, Vince…Reuse content