In the US it is said that the media covers business as if it is sport – or sports as they would have it. One company is up, and executive is down, there’s always time for a recovery. In the UK it is going the same way. Except the coverage doesn’t resemble cricket, rugby or football, it’s more like a cruel sport such as fox hunting or bear baiting.
The main quarry for the last few years has been bankers. Not that many haven’t deserved some opprobrium. Excessive pay, unfettered risk taking, gigantic losses, astonishing arrogance. All of these have contributed to the current sense that the “big swinging dicks” of the City needed to be cut down to size.
But the red blooded venom unleashed this week following two reports into the problems at two of the UK’s biggest banks – Barclays and HBOS – is repetitive and tiresome…and is in danger of becoming counter-productive.
The Salz Review at Barclays cost £18m to produce – including £1.5m paid for the services of its author – senior lawyer and now investment banker, Anthony Salz. It told us that Barclays paid far too much to investment bankers such as Bob Diamond and the wonderfully named Richie Rich; that this created a sense of entitlement that made them feel they walked on water and naturally should be in charge; and that Barclays made a mistake in making Mr Diamond chief executive. I used to work at Barclays. I could have told you all that for a tenth of the price, even a hundredth.
The Parliamentary Commission on Banking Standards – an odd construct, I’d argue as we don’t have a Parliamentary Commission on standards in any other industry – has focussed on HBOS, the banking behemoth that nearly collapsed under the weight of its bad lending and had to be rescued by Lloyds. The Commission – made up of MPs, Lords and, er, the Archbishop of Canterbury – is coruscating about the trio at the top of HBOS. This report is following on from an investigation by the Financial Services Authority – which, alas has yet to produce its own report into the collapse! Into a vacuum the Commission has stepped.
The Commission argues that the trio should be banned from working in financial services and there are suggestions that the knighthood handed to chief executive, Sir James Crosby, should be removed (as happened to ex- RBS boss Sir Fred Goodwin). Former HBOS chairman, Lord Stevenson, is safe as there is no mechanism for removing peerages, or else Lord Archer might merely be Jeffrey by now.
All great playing to the gallery and copy for the media. But what does it achieve? This report is looking at events more than five years old. The world has moved on and there are bankers who had nothing to do with the crisis trying to sort of the UK’s banking system. The issue I have with this banker baiting is it is getting in the way of the good work that Stephen Hester, António Horta-Osório and Antony Jenkins are doing (though there is an argument that the Salz Review actually helps Mr Jenkins in his transformation of Barclays).
There is a mood abroad that all banker pay is excessive and all banker bonuses are wrong. However if this anti-banker culture makes Stephen Hester so fed up that he leaves RBS – which of course is 82% owned by the taxpayer – we’ll all be the worse off for it.
Many years ago, someone suggested that all animal experiments were stopped and that scientists used lawyers instead as they aren’t as cute and don’t elicit sympathy. I can’t see the League Against Cruel Sports adding banker baiting to their list of activities to be banned, but maybe there should be a moratorium.