Has Mervyn lost touch with reality? No, but the City has lost its moral compass
Mervyn King’s interview with Charles Moore in the Daily Telegraph, in which the governor of the Bank of England accused the financial sector of exploiting gullible customers, gambling with other people’s money, lacking a moral compass, paying themselves excessively and relying on taxpayer bailouts when it all goes wrong, elicited some strong reactions. One unnamed City figure said it was ‘not correct’ for the governor to make it quite so clear that ‘he doesn’t like bankers’; another called him ‘an embittered old man with no appreciation of reality’.
It is indeed hard to imagine any previous incumbent being quite so preacherly towards his own parish, but the truth is that the City, not the governor, has lost touch with reality. The financial community remains trapped in the ‘silo mentality’ Gillian Tett wrote about in Fool’s Gold — the collective delusion that its unique and untarnished brilliance deserves exceptional rewards.
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