Probably not, says Martin Vander Weyer, but the banks do need reining in. We’ll all be better off when the Tories dismantle Brown’s disastrous ‘tripartite’ regulatory system
The last time I argued politics with Lord Turner of Ecchinswell, he was firmly on the centre right and I was a rather confused proto-Will-Hutton of the left. But that was a lifetime ago, when we were fifth-formers on the eve of Ted Heath’s 1970 election victory. Not quite 40 years on, all has changed.
Turner has been making headlines in the guise of ‘Red Adair’ (or ‘Daring Adair’ in the Guardian) and being applauded by Will Hutton for articulating the most radical ideas yet expressed by any serious public figure as to how to cure the City of its destructive addiction to excessive pay and risk. As for me, I’m still in a state of confusion: outraged at the reckless greed of my former colleagues in the financial world, yet clinging to the idea that the greater good will be served by allowing them to prosper again on more stable business models that they must develop for themselves — rather than having them imposed by the likes of Lord Turner.
His outburst last week, coming from the chairman of the Financial Services Authority, really was strong stuff — perhaps much stronger than he realised in his haut-fonctionnaire way. Here, compressed from a round-table discussion in Prospect, are the key phrases: ‘There are clearly bits of the financial system which have grown beyond a socially reasonable size. Some [financial innovation] is socially useless activity. The FSA has to be very, very wary of seeing the competitiveness of London as a major aim. If increased capital requirements are insufficient [to eliminate excessive trading activity, profits and bonuses] I’m happy to consider taxes on financial transactions — Tobin taxes.’
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