Leading article: The former Chancellor's critique still applies

Arrogance and stupidity are not confined to a particular tricky moment in the banking sector

Share
Related Topics

The occupants of the village that is Westminster will no doubt be preoccupied by the political sensation that is about to be uncovered in the memoirs of the former Chancellor of the Exchequer, Alistair Darling. There is all the delicious detail of a volcanic Prime Minister, Gordon Brown, setting up a parallel Treasury run on the side by the then Education Secretary, Ed Balls, and Shriti, now Baroness, Vadera who – according to Mr Darling – was "only happy if there was blood on the floor – preferably that of her colleagues". It is all grist to the political mill.

But what will resonate most with the public are the comments by Mr Darling on the City bankers with whom he dwelt as the world was seized by a global financial spasm with banking institutions collapsing, a massive credit squeeze and national economies plunged into a recession from which they have not yet properly emerged. "My worry," Mr Darling writes, "is that they [the bankers] were so arrogant and stupid they might bring us all down".

Quite. It is a worry which has far from abated among a general population plagued by spending cuts, job losses, vanishing pensions and general belt-tightening. Arrogance and stupidity are not confined to a particular tricky moment in that sector, as Barclays and HSBC have demonstrated with their more recent threats to relocate outside the UK if banking reform is too stringent. And the bankers are clearly still at work behind the scenes on the current Chancellor George Osborne, trotting out the old combination of dangling carrots and waving sticks.

The banker-friendly Tory Chancellor is currently engaged in a struggle over the pace and scale of reform with his Liberal Democrat Coalition partners. The Vickers report on the UK banking sector is to be published next week, and expected to recommend, among other things, that banks split their retail and investment arms – so that high-street accounts are placed behind a firewall, safe from the attentions of those involved in riskier "casino" activities. But the latest signal from Westminster is that Mr Osborne has decided that a major shake-up of Britain's banks may be postponed until after the 2015 general election.

It is clear which siren voices the Conservatives have heeded. Now is not the time to clean up banking, the bankers say, for that could imperil the fragile economic recovery. Regulatory changes to compel high-street banks to increase their reserves could force them to curb lending to small and medium-sized businesses at a time when the economy is slowing. The emphasis should be on recovery rather than punishing the banks. This is disingenuous stuff. The banks must not be regulated when the economy is booming, they say, and they cannot be reformed when things are going so ill. It is not hard to see what Alistair Darling means about arrogance and a lack of gratitude for the taxpayer bailout.

The complexities of ring-fencing the accounts of ordinary people may need some time. But five years? This is special pleading from the banks and David Cameron should take a much more robust attitude. Uncertainty and instability in the markets make it more, rather than less, urgent to put the bankers' house in order.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Recruitment Genius: UI / UX Designer

£25000 - £35000 per annum: Recruitment Genius: This firm are focussed on assis...

Recruitment Genius: General Processor

£7 per hour: Recruitment Genius: A vacancy has arisen for a General Processor ...

Recruitment Genius: Outbound Sales Executive - B2B

£18000 - £22000 per annum: Recruitment Genius: A great opportunity has arisen ...

Recruitment Genius: Online Sales and Customer Services Associate

£14000 - £16000 per annum: Recruitment Genius: Full time and Part time positio...

Day In a Page

Read Next
 

i Editor's Letter: Our representatives must represent us

Oliver Duff Oliver Duff
MP David Lammy would become the capital’s first black mayor if he won the 2016 Mayoral election  

Crime, punishment and morals: we’re entering a maze with no clear exit

Simon Kelner
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot