Time to put an end to banker bashing?
If we can all stop banker bashing and simply get back to our everyday work, maybe we can actually concentrate on getting our GDP back into the positive territory
With the Olympic tradition of Ekecheria, i.e. truce between the constantly warring ancient Greek city-states for the duration of the games, and the magnificent cauldron in Stratford representing "the coming together in peace" – in its designer, Thomas Heatherwick's, own words – it was only appropriate that the various malcontents of British society took a breather from their beloved banker-bashing.
It definitely came as a welcome development since only 12 months earlier it felt very much as though we were at the peak of the witch hunt that began back in early 2009 when (the then Sir) Fred Goodwin's windows were smashed by a mob clearly influenced by the sensationalist tabloid press.
A scaremongering media and various opposition and coalition (!) politicians quite frankly got carried away with their calls for bankers' blood beyond Bob Diamond's scalp. With that in mind, the Olympic Truce could not have come at a better time, particularly seeing as we now live in a different sort of reality than at the beginning of the recession.
A generation of NEETs (Not in Education, Employment or Training) and NINJAs (No Income, No Job, no Assets) has been developing as a by-product of an economically lost decade. Large swaths of British society no longer fall into the stiff-upper-lip, "Keep Calm and Carry On" category and are now best described as a volatile mass capable of nationwide rioting at a drop of a hat, as was witnessed a year ago.
That fact, unfortunately, has done little to ensure media responsibility. Instead, there are many in the British media who appear to relish their troublemaking powers, constantly adding fuel to the fire.
Obviously, being a banker myself, I am hardly supposed to be cutting the branch I am sitting on – but I fail to understand why the banker-bashing has become so catchy, especially within the overly politically correct Labour and Lib Dem-voting crowd.
Banking was the engine that helped to drive the temporarily successful New Labour Great Britain of the 90s and 00s. The Lib Dems too have their association with the industry with Party leadership packed with the children of successful financiers – although that could also explain the irrational hatred towards finance as a sort of overgrown teenage rebellion.
Furthermore, is banker-bashing even legal? After all, should it not fall into the same category as bullying, persecution, racism and sexism that have been tackled by our own or EU-imposed legislation? Funny then, that similar prejudices are overlooked when aimed at a perceived “elite”.
Let's look across the pond to how the US has been approaching the recent failure of their "national treasure" bank, JP Morgan. CEO Jamie Dimon has held his hands up to the loss of USD 5.8 billion and was let off without even a slap on the wrist by the US authorities – quite a contrast to the treatment of the former Barclays CEO and his officers.
Highly paid individuals aside, what sort of message are we sending to the world with public prosecution proceedings against our British companies being televised, tweeted and re-tweeted over and over? It almost smacks of the French Revolution, where the aristocratic heads were rolling off the guillotines in market squares for the plebs to enjoy and comes across to anyone remotely intelligent as no more than a "bread and games" approach to crowd control by today's politicians.
Whichever way we look at it, we should make no mistake about the importance of banking to the UK and hence to each and every one of us. The inconvenient truth is that at least until the hi-tech sector really takes off in East London, and becomes a true competitor to the Silicon Valley in the USA, the only Great industry left in Britain is banking.
The City is an undisputed heavyweight champion when it comes to global finance. Despite all the bad press, which portrays bankers as the top earning percentile of society, banking is actually a mainstream profession in London with 280,000 individuals working in finance in the City and Canary Wharf at the height of the financial crisis in 2009, according to the BBC. This figure may now be even higher thanks to the banks' hiring spree of 2010 and 2011.
I struggle to think of another private sector industry which gives employment to a similarly large number of people in the UK, let alone London.
But let's not forget that the benefits of this sector do not stop at the doorsteps of the bankers themselves. The money earned in the City is not only spent in virtually all sectors of the economy, hence creating jobs all over the capital, but also passed via the tax/National Insurance system to support those out of employment and is a massive contributor to infrastructural investments, charity, and any number of private initiatives.
And there is plenty of money earned in this industry to go around; financial services on a nationwide scale contribute as much as 10 percent of the UK GDP - a statistic from early 2011. Furthermore, given that London pays into the national coffers between GBP 10 - 20 billion a year, the rest of the country seems to be getting their cut of "putting up" with the City as well.
Now that the Olympics have finished, and so too the Ekecheria truce ended, I hope that Labour and Lib Dem politicians, seeking easy electoral wins, will refrain from jumping on the banker-bashing bandwagon yet again.
It seems that our mayor Boris Johnson has the right idea about the importance of the City and David Cameron has already proved that he can defend this crown jewel in Brussels. I hope that these two will put paid to any more nonsense from the likes of Balls, Miliband, or Vince Cable – whose behavioural patterns closer resemble those of the aforementioned shadow cabinet members.
If Cameron and Johnson can also put the brakes on the witch-hunting media, with a bit of luck we will all be able to go back to our everyday work and concentrate on getting our GDP back into the positive territory.
Przemek Skwirczynski is an economist, banker, and Conservative
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