Adair (Lord) Turner, the head of the Financial Services Association (FSA) has made perhaps the most stupid speech I have heard this year, against some pretty stiff competition. He has said that bankers are socially useless and that the financial sector is too big and needs to be cut back.
I have been trying to imagine how it must feel to be a hard working person and be told you are socially useless, and told that by a bureaucrat ennobled and handsomely rewarded by the taxpayer. Suppose Lord Turner decided that gardeners were socially useless, or bricklayers or politicians? One wonders who has authorised him to make this judgment.
More serious is the idea that the financial sector should be cut back. It’s not just the facts of the case – every year I can remember Britain has run a trade deficit with the world, wholly or partially recouped by a surplus on invisibles – largely banking. The financial industry has been bailing us out of the mire for ages.
But I could agree that banking is so strong an industry for Britain that there is perhaps an imbalance. What should we do? What should a country do if it had one very strong industry – say agriculture or oil or electronics? The liberal adviser would say encourage other industries to grow. The illiberal bureaucrat says hack the successful industry back down to size.
Turner is new to the FSA but he must be aware that it was charged with regulating the financial industry and yet failed to notice the banks were leveraged to 30%, failed to understand what was going wrong at Northern Rock. Let’s remember this when we talk about people being ‘socially useless’.
No comments:
Post a Comment