James Moore: How the banks took revenge on the politician once known as St Vince
Saturday 18 December 2010
Outlook: Should I be watching my back if I were a banking executive?
It's an interesting question because there's a fallen angel who may want to use someone in an attempt to regain his halo. I'm talking about the formerly sainted Vincent Cable who became Britain's most popular politician during the financial crisis as what he'd been saying for years wasvindicated and his ideas for the way forward were seized upon by an angry public which was being made to pay for the mess. Things look a little different now he's at the centre of a Governmentcommitting vandalism against Britain's higher education system (even the CBI's a bit worried) and he personally carries the responsibility for trebling fees for thosestudents living in England.
Mr Cable, of course, has never really been a saint. He is a politician and as such will probably soon be feeling the need to curry a little favour with a public that's rapidly fallen out of love with him. Hence those banks, which are going to give Mr Cable all the ammunition he needs for some much needed point-scoring with the voters.
Your starter for 10 is the bonus season, which is just getting underway and will be reflected in the banks' numbers early in the New Year. That's when their chief executives will also likely refuse to forego their pieces of the pie in the way that they did this year. There will also be numbers from various sources showing that, whichever way you look at it, the banks are still proving slow to get financing out to the small and medium-sized enterprises that desperately need it. That ought to be good for an angry press release or two.
The trouble for Mr Cable is all this sound and fury is starting to wear, well, just a little thin with a public that has heard it before. And while he can talk tough about breaking up the banks, and introducing new taxes and rules, there's not a lot he could do in reality even if his coalition partners were to play ball (take a look at the damp squib banking levy if you think there's a real prospect of that).
HSBC, and Barclays, are now transnational entities with more money, and it seems in some cases, more power than governments. So they can call the tune, which is something that really ought to worry the world's democracies if you care to think about it. And the tune they will sing if anyone tries to squeeze them is "cheerio".
As for the state-owned banks, well the problem there is that while we all know the UK's banking system is horribly over-concentrated, they can't really be carved up. The Independent Banking Commission will quite possibly recommend more carve-outs (over and above the sell-offs already demanded by the EU) but Vince's pal in Number 11 might even resist that. That's because he's desperate to get his hands on the money that will be generated by a sell-off of the state's stakes, possibly later next year if the economy doesn't tip off a cliff.
George Osborne will have seen the $12bn (£7.74bn) profit Barak Obama made last week from flogging the remainder of Citigroup the US taxpayer owned, and will be desperate to get his hands on a profit of his own. What better way to throw the public a banana or two after a bruising year (and following a savage kicking at the next set of council polls). So the chunks carved out of the part-state-owned banks probably won't be very big, if any chunks are ever carved out.
In other words its check mate to the big four. While the banking exec's might care to glance over their shoulders, they probably realise that Vince can sound off as much as he likes to win a few points after tuition fee debacle. But it's all going to be just so much hot air.
And why are 'southern' ways of speaking spreading north?
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