James Moore: Lord Turner's optimism not yet justified
Wednesday 23 September 2009
Outlook If nothing else, Lord Turner has a knack for publicity and self-promotion that few regulators have shown before. Last night he was at it again at Mansion House. Of course, he had another bash at the banking industry for its "socially unacceptable" products, its tendency to add layers of complexity on to things which really aren't much use to anyone, and its habit of selling services that people really don't need. But what was most interesting about his speech was his contention that the financial industry is "no longer fragile". Come again?
It is true, as Lord Turner says, that we could all do with a bit of optimism, and that a diet of constant pessimism from officials can actually be deeply harmful. But let's remember where we were six months ago, when "financial Armageddon" was the buzzword, together with "worst downturn for a generation" and "danger of another Great Depression".
Of course, there was more than a little hype in some of these statements. There was something to suggest that Nature's pessimists were indulging themselves in a little gloom porn.
All the same, while Lord Turner's points were caveated with the usual warnings about possible bumps in the road, they do seem a little premature, particularly given his position and the wave of possibly irrational exuberance which has swept through the markets over the past few months.
Yes, we have avoided the sort of Armageddon that the doomsayers were predicting. Things are perceptibly improving on a number of fronts. But no, we are not out of the woods yet. And while Lord Turner was at pains to stress that reform of the international financial system must not be allowed to stall, what he said could just help that to happen.
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