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Wednesday, 8 September 2010

Money, Money, Money

Barclay's Bank has appointed  Bob Diamond as its chief executive. Depending who you listened to this is an imaginative appointment or the lunatics have taken over the asylum.

Mr Bob is a highly successful investment banker - it is said he made Barclay's Capital into the powerhouse it is today. He's also made a packet on the way.

The establishment in this country are up in arms about this appointment. They say he's the sort of man that got us into the mess we were in in 2008 - now he'll be in charge of a huge bank - one of the "banks that can't fail"; at the centre of our financial system. What madness!!

I've heard others, in the financial world, say it's a stroke of genius.

There are possibly two rules of thumb to follow in life. The first is to ignore what the establishment say about  anything, the second is to ignore what club members say about fellow club members.

A minister of the Coalition Government is up in arms at this appointment - as far as he's concerned Mr Bob is the lunatic taking over the asylum.

Just remind me. How clever were our institutions in preventing the recent financial melt down? Not very. Many would say that their cheap money policy was the main cause of our problems, not the banks doing what they're good at - chasing profit.

We're told that Mr Bob has no experience of the high street network - that beloved institution which we all depend upon. Some might say shackled to.  All he knows about is making money. In which case he'll do fine since the high street bank is possibly one of the most successful, and unchallenged, money making machine yet devised.

Not that the bosses of Lloyds TSB, RBS or HBoS have much to crow about. None of their chief executives were high street bankers and even if they had been they couldn't have done a worse job. The much vaulted competition in the High Street has been castrated by their over weaning ambition and left us with the feel of Andalusia in our nostrils.

And none of those hugely compensated ( what a filthy expression - compensation) knew what a Consolidated Derivative was or bothered to understand how it worked - just as long as it kept the fees rolling in and the "performance" related bonuses clicking ever upwards.

At least Bob does. Which seems to me to be a good enough reason to put him at the helm of a "lynch pin" of the UK's financial system.

Oh, and by the way. Unlike most of the UK's banking system Barclay's isn't now owned by the Government.

So frankly they can appoint who they bloody well like.   

1 comment:

thedailyg said...

People's anger is unfocused and misdirected; the media does not help - it does not fulfill its duty to explain complex events and causes to them, preferring the neutered ethic of 'balance', which means that competing agendas collide in something like a stalemate.

If the media did make things clear for us, we would be able to rapidly solve problems.

Meanwhile, people will lash out at bogeymen.

A lot of it has to do with a basic question of whether it's right for some to be wealthy while others are poor. The usual answer (in the West) is that the rich should be free of guilt and that to say otherwise is to dream of some doomed opposite extreme way of life. However, this view is rarely exhaustively justifed - it is typically expressed as a prejudice, a social norm requiring no justification.

Because this question festers unanswered, people do this incoherent thing of attacking some of the rich some of the time, like when they are bankers during a bank-driven recession, or when they are politicians following an expenses scandal. Suddenly these people are expected to feel the pinch along with the rest of us; it seems only just. But I would venture that if it's just to share wealth now, it was just before the recession or the expenses scandal. Make your minds up, people.