It’s not going to be a popular rallying cry, I admit. Somehow ‘Save the Bankers’ doesn’t quite pull at the heartstrings in the same way as ‘Save the Whales’ or ‘Save the Pandas’. Yet the news comes to us today that UK banks will have slashed nearly 190,000 jobs worldwide by the end of next year from their peak staffing levels. That’s equal to the whole population of Geneva.
The figure applies only to the Big Four banks of RBS, HSBC, Lloyds and Barclays, so the number for all City-based banks is probably larger. Nor is what is happening with the Square Mile’s financial institutions only a reflection of the world at large — Wall Street is actually hiring again as the American economy recovers, while Asia’s finance industry never suffered that much in the first place, and is probably poaching talent from US and Europe. (Standard Chartered, which makes most of its profits in Asia, is targeting 2,000 hires this year.) In contrast, Big Four hiring is at a nine-year low.
Britain is haemorrhaging jobs in one of the few world-leading industries it has left, at a time when it can least afford to do so. Yes, it would be much better if the country still had a large manufacturing base and didn’t have to rely so much on financial services — but there’s no point throwing out the baby with the bathwater.
Have we had enough of banker-bashing yet? It doesn’t look like it, as demonstrated by the BBC’s recent show Bankers.
Its not so much a documentary as a hit job, shows (you can read my review, in this week’s Spectator, here). Of course certain financiers, with their terrible rigging of Libor and other scandals, heaped disrepute and suspicion on their profession. And part of the jobs-slashing is because banks must now cut costs to set aside compensation money for the mis-selling of loan insurance products (though a big part of the jobs loss comes from the eurozone’s woes).
But what strikes me about the witch-hunt of bankers — all the focus on bonuses and forced resignations and removal of knighthoods and so forth — is that it acts as though bankers, and bankers alone, are to blame. Somehow, the huge economic mess that we currently find ourselves in is the fault of a few, and has nothing to do with politicians, or central bankers, or eurocrats, or even financial journalists (who dropped the ball spectacularly on the 2007 financial crisis). Least of all, it’s got nothing to do with us, the consumers, though nobody put a gun to our heads to make us max out on our credit cards or take out an unaffordable second mortgage. The bankers’ greed has nothing to do with ours.
The other thing about banker-bashing that we probably don’t want to hear, is that it comes too late. By all means, chase the banking criminals with whatever legals means necessary and let’s create a new framework so that City scandals become far less likely, but — as with so many things in the speedy world of finance — the battle has moved on.
In the coming months, the Square Mile will have to fight the EU’s imposition of the Tobin tax, the financial transactions tax from which London stands to lose the most, and a cap on bankers’ bonuses, which could hit 10 times as many UK bankers as the current pay limits do. Already, US banking bonuses are 60 percent larger than those in Europe. What incentive is there left for bankers to stay in London?
Perhaps we should start defending the City, for a change.
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