Sunday 23 January 2011

Fun and Games at the Banking Commission

There were early signs that the Independent Commission on Banking has great potential, when Clare Spottiswoode mouthed off before Xmas. And yesterday, this from the ICB Chairman Sir John Vickers

"Systemically important institutions now have an implicit state guarantee for risk taking activities, particularly those related to and/or inseparable from retail banking. This distortion, which is also a distortion to competition with other institutions, should be neutralized or contained."

Go, Vickers ! By the lights of the usual weasel-wording we are accustomed to, this is plain speaking of the highest order and, in theory, just what Osborne set them on for. Likely to prove a hot potato, though, as the months roll on. Can Sir John and his gang be 'encouraged' to be a bit more flexible and diplomatic ?

Hopefully not. Public life does not have many honours left to dangle in front of a man who is already Warden of All Souls. He is also delightfully academic: here's another extract from yesterday's speech -

"Then a necessary condition for U to fail is that R or I fails, but this is not a sufficient condition unless R and I both fail if either does"

What a man ! Now academics as a breed are hardly incorruptible, but the better of them are pretty damned obdurate. I look forward to many months of fun while Sir John, La Spotti, Martin Wolf et al go about their vital business. Let's see what neutralized or contained really means.



Budgie said...

This does look good. Extraordinary.

As an (ex) HBoS shareholder I have always held that Lloyds were diddled; and the man to blame was the bullying arrogant incompetent Brown. Let's hope that gets highlighted.

hovis said...

Budgie: I partly agree. Brown was criminal and incompetant with it.

However I dont think that lets off Victor Blank and Eric Daniels who had the hubris to agree without it appears ANY due diligence - I'm suprised the shareholders havent had them shot. (metaphorically speaking of course...) As for Brown...

Edindie said...

I think that it's obvious what we need to do with the banks and how to address the problems that the structured credit markets created. I have always assumed that this is down to ignorance; the answer is always simple when you don't know anything.

I have read a lot around the subject though and my views haven't really changed. I would be very interested to know what an official (and hopefully enforcable) review concludes.