Simon English: Is there any way back for the banks after this blow to moral authority?
Thursday 09 August 2012
Outlook It is easy to be holier than thou when writing about banks. Not to mention fun. Even Mafia bosses are presently raising their eyebrows, à la Sir Mervyn King, at the ongoings at Standard Chartered, Barclays and the rest, and wondering just how these guys got away with it for so long.
There's now so much mud flying around that it is tempting to counter-intuitively argue that they really aren't as bad as you've read. That grandstanding lawyers with an eye for a headline are playing a populist card before they run for election.
What's a bit of money laundering between friends? Dealings with terrorists and drug barons? Who hasn't — be honest with yourself.
But then you come back to just how awful much of this is and wonder whether this now represents a total loss of moral authority that they will never win back.
My banking correspondent, a direct descendant of Captain George Mainwaring, notes that banks have always lost money in the past and will always do so in the future. Their job, the whole point of them, is to lend money they don't really have, to expand the economy by taking risks. Sometimes they will get it horribly wrong, in the same way as last time, but with a fresh twist.
The thing is that some of this stuff occurred after there had already been a credit crisis brought on at least partly (it's in dispute, don't write in) by their own foolish practices.
So they'd already messed up horribly, but saw little reason to change in any way.
Empires have fallen on such things before. The loss of moral authority, says the Captain's descendant, was what almost destroyed the Papacy in the 16th century. Its power was partly based on a belief that they should behave in a certain way. When it turned out they were just a bunch of self-interested kleptocrats who thought the rules didn't apply to them, the whole edifice near collapsed.
So if the bankers' days as Masters of the Universe are truly past and never to be repeated, which bunch of delusional loons are next up to lead us? (do write in).
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