In the
air there is a spirit of meddling…I can feel it, I can sniff it out, so
watch out all you politico bureaucrats who are considering putting a
state straitjacket on our banks! Granted, the big high street names of
our banking sector have not behaved in the best possible way, but there
is still time to improve, and they are trying; bless them!In order to counter all the negativity, many leading financiers are giving and engaging in society in a way they have not done for 20 years. They are ramping up their Corporate Social Responsibility schemes with greater and more highly publicised activity in the community, including measures to address ‘financial inclusion’. Other examples of positive community engagement include high profile sport sponsorships from golf to the Premier League, plus other more CSR-led initiatives, including Spaces for Sports. This is a laudable initiative which has won several industry awards.
Yet, still there is a clamour for them to be more regulated, and to what end? Our political masters haven’t exactly covered themselves in glory over managing our economy over the last decade or so! The banks will retreat into their shells, en masse, if they feel persecuted by members of the public and, more seriously, by politicians of every political complexion.
The Vickers Report, which reported in the aftermath of the financial meltdown, said that the banking sector should be regulated to avoid future government bail-outs. The report says nothing about improving bankers’ decision-making, banking supervision, or money and credit policy. What proposals it does make will jeopardise UK banking by reducing its global competitiveness. It will also harm the UK economy by reducing the funds that the banks have available to lend to SMEs and homeowners. Unfortunately, this potentially very damaging report is still under active consideration and there are strong voices in support, particularly from the Left.
It’s simple common sense to insist that we cannot solve the banking crisis by impos-ing more regulation than our competitors overseas. We live in a global, not just a UK, economy! We should not be increasing regulation of our banks if it makes it difficult for them to lend and businesses to grow.
We have to stop vilifying banks and we need to make the moral case for banking and the free market allocation of capital. Our independent financial institutions are an essential part of our free market economy. Their ability to make decisions based on real-life customer-focused facts and figures, rather than a politically driven tick box agenda, is vital to our sustained recovery.
