Vickers' "electric fence" - are bankers' DIY skills up to it?

Cows, cricket, and dangerous fences.

John Vickers, the man who has laid out the plans for a redesigned  Vickers Report recommended the separation of retail and commercial activities.

Last month, having digested Vickers’ recommendations, the Parliamentary Committee on Banking Standards published its own report, advocating the “electrification” of that ring fence.

Last week, John Vickers appeared in front of the Committee to endorse the proposal. “I welcome anything that reinforces the ring fence and, in particular, I welcome this committee’s proposal to that end,” he said.

“We are now 16 months on from publication of the final report, and nothing has happened in that period which makes me doubt that ring fencing is the right structural ingredient, along with others – loss absorbency and so on – for banking reform in the UK.”

At the time the Vickers Report was published, many in the banking industry were sceptical as to whether a fence could be erected at all. Senior bankers are not known for their DIY skills… And that was before any talk of passing a current through it.

However, the solution has become generally accepted as preferable to the Volker Rule that is currently causing panic on the other side of the pond. In order to avoid similarly draconian measures being adopted here, most bankers are keeping quiet.

But one committee member, Mark Garnier MP, wanted to make sure that Vickers had faith that bankers would resist the temptation to wield the wire cutters. “Is it inevitable that banks will try and test the limits of the ring fences?” he asked. “And is there a commercial advantage in doing so?”

In response, Vickers painted a surprisingly bucolic scene. “I can’t think about this topic without reference to my own experience, in a rural cricket match a long time ago,” he reminisced. “I was on the boundary, and there were cows in the next field.

“I didn’t realise how much power there could be in an electric fence until the ball whizzed past me and I went to get it.

“Having had that experience, I wouldn’t test the boundary. In fact, I’d try and field much closer in.”

A cautionary tale that I’m sure the UK banking industry will give full consideration to. But I have my own electric fence/cricketing anecdote.

At school, our cricket pitch was surrounded by an electric fence to stop errant woodland creatures defecating on the square. It may have been effective in that aim, but did not do a great deal to prevent errant schoolboys from weeing on it. And trust me, despite YouTube evidence to the contrary, it really didn’t do anyone much harm. Indeed, in those pre-mobile, pre-internet days it passed as entertainment.

I guess it really comes down to just how much current you pass down the wire, and whose hands are on the voltage dial. Those are going to be very difficult decisions to make indeed. As admirable as Vickers’ faith in humanity is, most of the investment bankers I know would look at an electric fence as little more than a potential practical joke.

The “electrification” of that ring fence. Photograph: Getty Images

James Ratcliff is Group Editor of  Cards and Payments at VRL Financial News.

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It's easy to see where Berlin is being rebuilt – just hit the streets

My week, from walking the streets of Berlin to class snobbery and the right kind of gentrification.

Brick by brick, block by block, the people are rebuilding the city once called Faust’s Metropolis. To see it clearly, put your boots on. One of the most bracing walks starts by the Gethsemane Church, which served as a haven for dissenters in the last days of the GDR and takes you down ­towards the Hackescher Markt.

Here, in what is still the eastern half of a divided city that wears its division more lightly, is a Berlin experience both old and new. In three decades of frequent visits, it has been fascinating to note how much this part of town has changed. Even a decade ago these streets were rundown. With crumbling buildings showing bulletholes, it wasn’t hard to imagine what the place looked like in 1945. Now there are lilacs, blues, and yellows. Cafés, bars and restaurants abound, serving the young professionals attracted to the city by cheap rents and a renewed sense of community.

 

Breaking the fourth wall

Looking north along Schliemannstraße, you’ll find a delightful vista of well-tended balconies. It’s a pleasant place to live, notwithstanding the gaggle of grotesques who gather round the corner in the square. On Kastanienallee, which forms the second leg of the walk, an old city feels young. It’s a kind of gentrification but the right kind. There’s more to eat, to drink, to buy, for all.

Berlin, where Bertolt Brecht staged his unwatchable plays, was supposed to have been transformed by a proletarian revolution. Instead, it has been restored to health by a very middle-class one. Germany has always had a well-educated middle class, and the nation’s restoration would have impossible without such people. The irony is delicious – not that irony buttered many parsnips for “dirty Bertie”.

 

The new snobbery

The British Museum’s survey of German history “Memories of a Nation” is being presented at the Martin-Gropius-Bau as “The British View”. Germans, natürlich, are curious to see how we observe them. But how do they see us?

A German friend recently in England  said that the images that struck him most forcibly were the tins of food and cheap booze people piled up in supermarkets, and the number of teenage girls pushing prams. Perhaps Neil MacGregor, the former director of the British Museum who will shortly take up a similar role here at the new Humboldt Forum, may turn his attention to a “German View” of the United Kingdom.

There’s no shortage of material. In Schlawinchen, a bar that typifies Kreuzberg’s hobohemia, a college-educated English girl was trying to explain northern England to an American she had just met. Speaking in an ugly modern Mancunian voice that can only be acquired through years of practice (sugar pronounced as “sug-oar”), she refer­red to Durham and York as “middle class, you know, posh”, because those cities had magnificent cathedrals.

When it comes to inverted snobbery, no nation can match us. To be middle class in Germany is an indication of civic value. In modern England, it can mark you as a leper.

 

Culture vultures

The Humboldt Forum, taking shape by the banks of the Spree, reconsecrates the former site of the GDR’s Palace of the Republic. When it opens in 2018 it will be a “living exhibition”, dedicated to all the cultures of the world. Alexander von Humboldt, the naturalist and explorer, was the brother of Wilhelm, the diplomat and philosopher, whose name lives on in the nearby university.

In Potsdamerplatz there are plans to build a modern art museum, crammed in between the Neue Nationalgalerie and the Philharmonie, home to the Berlin Philharmonic. Meanwhile, the overhaul of the Deutsche Staatsoper, where Daniel Barenboim is music director for life, is likely to be completed, fingers crossed, next autumn.

Culture everywhere! Or perhaps that should be Kultur, which has a slightly different meaning in Germany. They take these things more seriously, and there is no hint of bogus populism. In London, plans for a new concert hall have been shelved. Sir Peter Hall’s words remain true: “England is a philistine country that loves the arts.”

 

European neighbours

When Germans speak of freedom, wrote A J P Taylor, a historian who seems to have fallen from favour, they mean the freedom to be German. No longer. When modern Germans speak of freedom, they observe it through the filter of the European Union.

But nation states are shaped by different forces. “We are educated to be obedient,” a Berlin friend who spent a year at an English school once told me. “You are educated to be independent.” To turn around Taylor’s dictum: when the English speak of freedom,
they mean the freedom to be English.

No matter what you may have heard, the Germans have always admired our independence of spirit. We shall, however, always see “Europe” in different ways. Europe, good: we can all agree on that. The European Union, not so good. It doesn’t mean we have to fall out, and the Germans are good friends to have.

 

Hook, line and sinker

There are fine walks to be had in the west, too. In Charlottenburg, the Kensington of Berlin, the mood is gentler, yet you can still feel the city humming. Here, there are some classic places to eat and drink – the Literaturhauscafé for breakfast and, for dinner, Marjellchen, a treasure trove of east Prussian forest delights. Anything that can be shot and put in a pot!

For a real Berlin experience, though, head at nightfall for Zwiebelfisch, the great tavern on Savignyplatz, and watch the trains glide by on the other side of Kantstraße. Hartmut Volmerhaus, a most amusing host, has been the guvnor here for more than 30 years and there are no signs that his race is run. The “Fisch” at twilight: there’s nowhere better to feel the pulse of this remarkable city. 

This article first appeared in the 01 December 2016 issue of the New Statesman, Age of outrage