How on earth did Lloyds Banking Group chief executive Antonio Horta-Osorio end up getting the same sort of press in the same sort of places as Justin Bieber or those mysterious celebrities who trot along to the High Court every time the paparazzi catch them with their pants down?
The furore surrounding his tangled love life led the bailed out bank's boss to pen an apology by way of an e-mail to Lloyds staff which has, of course, gone public. In it he reaffirmed his commitment to running what is, or ought to be, a rather boring business.
The private lives of people who run institutions like Lloyds are usually of about as much interest to the tabloid press as are the pronouncements of the Bank of England’s Financial Stability Board.
And yet the unfortunate Lloyds chief executive was deemed worthy of being secretly snapped by a Sun man with a long lens as if he were Stacey Solomon. No I don’t know who she is either. But in researching this piece I discovered that she’s the sort of person you find decked out in a bikini in the celebrity gossip columns.
Now it is true that Mr Horta-Osorio has made several pious public statements about his bank being “whiter than white” along with other similarly trite homilies.
But you can be fairly sure he was talking about whiter than white in the financial sphere. He does not, therefore, merit the sort of scrutiny that a politician getting up to lecture the public about family values while carrying on with a researcher behind the backs of his family might deservedly receive.
The clue to the scrutiny afforded to Mr Horta-Osorio, I think, comes in a phrase I used earlier: "bailed out bank".
The problem for banking executives, as the public faces of their businesses, is that they run institutions that have allowed themselves to become public property, in some cases (such as Lloyds) quite literally.
You might argue that Mr Horta-Osorio wasn’t in charge when the bank went cap in hand to the taxpayer and that is true. He is the man leading the turnaround. You might also point to the fact that the state’s stake in the bank is small and that taxpayers have been getting their money back on his watch. Also true.
It doesn’t matter. The public still feels that the banks and their leaders are public property. And you know what? There is some justification to that view.
Even those banks that didn’t take bail out money during the financial crisis have benefitted considerably from public largesse. They are continuing to do so.
During the crisis the Bank of England’s special liquidity scheme poured hundreds of billions of pounds into the banking system to prevent it from gumming up. More recent wheezes have included Funding For Lending and the Term Funding Scheme. These have been greasing bankers’ palms with cheap money to encourage them to lend.
Banks also continue to operate under de facto state guarantees. If Lloyds or any of the other systemically significant ones were to get into trouble again we would be called upon to bail them out. Spare me the talk about “living wills” and “orderly wind ups”. Politicians, bankers and banking regulators all know that in reality it’ll be the taxpayer’s coin that will be called upon to prevent a future financial catastrophe. That is the lesson of Lehman Brothers, the American bank that was allowed to collapse with disastrous consequences.
Hence the reason Mr Horta-Osorio’s private life has become a matter of public interest. Others may find themselves similarly hounded if they’re pictured on the arms of glamorous others to whom they aren’t married.
I’m not crying any tears for either him, or them. But this is actually hugely frustrating, and damaging to the cause of making finance better, and fairer to the people who have to call on it, and to the vast number of people who work in the industry. Thousands of whom are currently in the process of being laid off by Mr Horta-Osorio.
How they are treated is what matters to me. Whether it is right for job losses to end up bumping up banking executives’ already grotesque bonuses is what we ought to be discussing. And whether banks are really safe. And whether they are fulfilling their duty to the tax payer by lending to the economy they did so much to damage. And whether the absurd salary packages handed to their top executives can really be justified. I could go on but all these, and more, are real and live issues, and they are far more important than some tawdry affair that might somehow affect the boss’s “focus”.
Unfortunately, in our current culture, it’s the CEO canoodling on a beach that makes the headlines, and which everyone is talking about (and, yes, I know I’m talking about it too). It is our lack of focus on the real issues that partly explains why the industry hasn’t changed as much as it should have.
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