Anthony Hilton: The incredible shrinking City may not be all bad
Saturday 17 November 2012
We may still think the bonuses paid to City bankers are a disgrace but there are significantly fewer of them now than there were a couple of years ago. According to the Centre of Economics and Business Research the total number of jobs in City-type financial services has slumped from 354,000 in 2007 to 250,000 this year, a drop of well over a quarter. But the amount paid out in bonuses after Christmas will have fallen even more, to the lowest for about 15 years.
The research house reckons the gross figure will be around £1.6bn. This is a third of last year's payout and only about an eighth of the total in the bonanza years of 2007 and 2008 when employment peaked.
It is what lies behind the figures which tells the real story. There has been a quite astonishing slump in financial activity this year. Derivatives trading is down by 20 per cent, domestic mergers and acquisitions activity by a third and cross-border deals even more.
In recent months it has become almost fashionable to say the City is too big, and the country would be better off if it were significantly smaller. That is what seems to be happening. And if we were to separate the effects of this contraction from the overall figures for economic growth we might well find the rest of the economy is doing a lot better than we assume.
Banks can keep loans up if they change culture
Every time someone in government suggests the banks would be safer if they held more capital against their loans, the banks say they could only increase their capital by cutting back on their lending. It is one of the ways they routinely scare the government.
On Tuesday a poacher turned gamekeeper exposed this claim for the nonsense it is. Michael Cohrs made his career at Goldman Sachs but he is a member of the group in the Bank of England whose job it is to keep the system safe for the future. In a speech on Tuesday he said banks could easily meet such demands without it having a material effect on their ability to service their clients.
Mr Cohrs says they could cut back without diminishing their ability to supply credit or lend to SMEs. But it would require them to change their culture.
Apple agrees deal with Visa on contactless payments
- 1 Is Apple's iCloud safe after leak of Jennifer Lawrence and other celebrities' nude photos?
- 2 Joan Rivers: 'Palestinians deserve to be dead'
- 3 Perez Hilton apologises for Jennifer Lawrence naked photo leak
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Mexican woman becomes world’s 'oldest person' at 127
iPhone 6 'hidden code' could indicate sharper screens or bigger phones
Perez Hilton apologises for Jennifer Lawrence naked photo leak
Ariana Grande nude photo leak: 'These are completely fake'
A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
London 'terror threat': Metropolitan police deny tube attack hoax
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
iJobs Money & Business
£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...
£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...
£650 per day: Harrington Starr: .NET Developer C#, Win Forms, WPF, WCF, MVVM,...
£350 - £375 per day: Harrington Starr: Looking for a Java/C++ Developer to wor...