Did you hear the one about the honest, hard-working and decent banker?

No, really, did you?

Despite this being the worst week yet for an industry that’s had more than its fair share of miserable weeks in recent years, and even in spite of the fact that the accusations against the so-called “banksters” have escalated from a lack of morality to potential criminality, there remain plenty of honest, good and moral men and women working in financial services. Many of them are even in the most senior positions

Take, for example, the old story (retold to me this week) about Lord Mervyn Davies, when he was boss of Standard Chartered. As the drama of Bob Diamond’s resignation over the role of Barclays in Libor-rigging unfolded, I was offered this wonderful insight that explains why few expect Standard Chartered to be implicated in this most serious episode of financial misadventure. It also explains why Standard Chartered wasn’t quite as exposed to the financial crisis as many of its competitors.

Some time in 2006, one of Standard Chartered’s financial rocket scientists met with Davies to let the bank get involved in the sort of complex transactions that were all the rage at the time and that were making rivals (both institutions and individuals) so rich. Davies, clearly not a stupid man, asked the boffin to explain the scheme. About 20 minutes later Davies stopped him and admitted he hadn’t understood a word. A sure sign of his intelligence and honesty was that he was confidant enough to show his ignorance (not something very prevalent in banking boardrooms at the time). He gave the boffin another go, who then took half an hour to explain his ideas in plain English. Davies thanked him for his time but still didn’t follow. He is reported to have said, because he couldn’t understand the scheme, there was no way he was prepared to let the bank get into it. Two years later that already looked to be a good call; six years on it looks like the wisest possible decision.

There is danger that this sort of story makes Davies appear something of a throwback to a much-vaunted "golden age" of banking. While this week has been bad, we must resist glorifying the past or go misty eyed over an era before the Big Bang opened the City up and all those brash Americans brought their naughty ways over here. The old City was the worst kind of closed shop. Deals – rather, gentleman’s agreements – were sewn up over lunch or a round of golf, and in this age diversity meant hiring from both Oxford and Cambridge. Women, if they were in the boardroom at all, were there to make tea and take notes.

It may have its faults, but the modern financial services sector is a rare example of a UK success story. And the whole economy benefits from a thriving financial services industry. But that’s exactly why wrongdoing (especially crime) must be rooted out and acted on swiftly. Criminality must be punished as such and all financial gains must be recovered, as they would be elsewhere.

All this requires adequate regulatory oversight and proper legal protection. It’s why the government must recognise that its Financial Services Bill is not fit for purpose as it is and needs a radical overhaul.

The good news is that there is still time to get it right. But it requires politicians to stop pointing fingers over whether light-touch, tripartite regulation caused the mess and see that the proposed twin peaks regulation is equally flawed. There are myriad specialists arguing that while politicians quibble over quantity of regulation, it’s the quality of those rules that matters. Politicians must take this opportunity to learn from other people’s mistakes and create the support and regulatory structures that allow us all to be confident of hearing many more stories about decent, honest bankers in the future.

This article originally appeared in Economia

London. Photograph, Getty Images

Richard Cree is the Editor of Economia.

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How Labour risks becoming a party without a country

Without establishing the role of Labour in modern Britain, the party is unlikely ever to govern again.

“In my time of dying, want nobody to mourn

All I want for you to do is take my body home”

- Blind Willie Johnson

The Conservative Party is preparing itself for a bloody civil war. Conservative MPs will tell anyone who wants to know (Labour MPs and journalists included) that there are 100 Conservative MPs sitting on letters calling for a leadership contest. When? Whenever they want to. This impending war has many reasons: ancient feuds, bad blood, personal spite and enmity, thwarted ambition, and of course, the European Union.

Fundamentally, at the heart of the Tory war over the European Union is the vexed question of ‘What is Britain’s place in the World?’ That this question remains unanswered a quarter of a century after it first decimated the Conservative Party is not a sign that the Party is incapable of answering the question, but that it has no settled view on what the correct answer should be.

The war persists because the truth is that there is no compromise solution. The two competing answers are binary opposites: internationalist or insular nationalist, co-habitation is an impossibility.

The Tories, in any event, are prepared to keep on asking this question, seemingly to the point of destruction. For the most part, Labour has answered this question: Britain will succeed as an outward looking, internationalist state. The equally important question facing the Labour Party is ‘What is the place of the Labour Party in modern Britain?’ Without answering this question, Labour is unlikely to govern ever again and in contrast to the Tories, Labour has so far refused to acknowledge that such a question is being asked of it by the people it was founded to serve. At its heart, this is a question about England and the rapidly changing nature of the United Kingdom.

In the wake of the 2016 elections, the approach that Labour needs to take with regard to the ‘English question’ is more important than ever before. With Scotland out of reach for at least a generation (assuming it remains within the United Kingdom) and with Labour’s share of the vote falling back in Wales in the face of strong challenges from Plaid Cymru and UKIP, Labour will need to rely upon winning vast swathes of England if we are to form a government in 2020.

In a new book published this week, Labour’s Identity Crisis, Tristram Hunt has brought together Labour MPs, activists and parliamentary candidates from the 2015 general election to explore the challenges facing Labour in England and how the party should address these, not purely as an electoral device, but as a matter of principle.

My contribution to the book was inspired by Led Zeppelin’s Physical Graffiti. The track list reads like the score for a musical tragedy based upon the Labour Party from 2010 onwards: In My Time of Dying, Trampled Underfoot, Sick Again, Ten Years Gone. 

Continued Labour introspection is increasingly tiresome for the political commentariat – even boring – and Labour’s Identity Crisis is a genuinely exciting attempt to swinge through this inertia. As well as exploring our most recent failure, the book attempts to chart the course towards the next Labour victory: political cartography at its most urgent.

This collection of essays represents an overdue effort to answer the question that the Party has sought to sidestep for too long.  In the run up to 2020, as the United Kingdom continues to atomise, the Labour Party must have an ambitious, compelling vision for England, or else risks becoming a party without a country.

Jamie Reed is Labour MP for Copeland.