The party’s over: welcome to the City’s new puritanism

AB

What's been missing from the city for the last few years has been the creative destruction that so vital to maintaining the industry's health. Frankly, mediocre people have got very rich by taking stupid risks with other people's money. The current firestorm is long overdue and is ultimately for the good. We need merciless liquidation of those who have failed and then leave the rest to prosper. If the city isn't allowed to be a jungle it becomes a swamp! The only useful thing that government can do at the moment is ensure the cull runs smoothly and that the rest of the economy doesn't drown in the gore.

David Short

The conspicuous consumption that City types indulge in was all down to the fact they were dull people doing dull jobs with no purpose other than making money.

They looked for excitement and a form of joy they could not get from their working lives.

Without these expensive diversions, they will have to face up to the shallowness and amorality of their chosen calling. Scarey.

It's not too hard to make money in the City. You don't have to be very clever; you just have to be willing to give up most of your waking hours and your best years to a rather pointless occupation and to mix with other total t***ers.

Just look at the calibre and manners of the people at Canary Wharf to see what I mean.

Kevin

"Perhaps we’d be better off putting their greed to good use, and offering them whatever bonuses we can to turn around our banks."

I didn't follow your reasoning on this subject the last time you wrote about it:
http://www.spectator.co.uk/the-magazine/features/488671/essex-and-the-city-my-life-as-a-posh-bird-broker.thtml

and look what has happened since then.

Barings failed and was taken over by a foreign company. Why not other banks?

Michael Spencer Smith

I think, Venitia, that you don't realise that a sea change is taking place. The whole reason that banks are having to be bailed out to the tune of several trillion dollars worldwide is precisely because they have been allowed to reward and encourage these frankly not very clever people to engage in utterly reckless trading, the results of which are all around us. This cannot go on.
Years ago, this country was run by the trade unions. It took Margaret Thatcher to stop that. Now the banking tail has been allowed to wag the economy dog for too long, and banking needs to be pruned, globally restricted in what it can do and the products it can trade in, and generally put back in its box so this catastrophe can never happen again.
I am not a socialist, but it must be obvious to anybody that the whole system had got out of control and was being driven by a very ugly mindset sadly prevalent in the City. Banking used to be considered a rather boring job, it should be again.

Erasmus

Let them go bankrupt. Open new banks.

Amerigo P. Vongole

This is a brave and mature article given the current mood, but spot on. The popular swipes at rank and file bankers by Gordon B, John P and others are unjustified and crass. Sure, hold the directors responsible for letting things get out of control, and let the banks sink or swim. Most people in the City are just doing what they were hired to do and, if you're a banker in the front office, you are paid to make money within, and on the edge of, the rules of your organisation applicable to your role. And the bank is there to make money for its shareholders. So don't blame anyone for following duty and instinct. A politically opportunistic regulatory over-reaction to what's happened risks killing off the City. New York lost ground to London and others in the wake of Sarbanes-Oxley and other post-Enron stifling legislation. The free market City has brought a huge amount of wealth to the UK over the last 20 years and can continue to drive the economy in the future. Destroy the City and what exactly is the UK going to do? Export more Stilton? And anyone who says the City is full of idiots is only partially right. There are some seriously smart people working in the City and, overall, they will kick the public sector's arse every time. So blame yourselves for electing people with zero private sector experience to govern.

David Short

All financial instruments, corporate or personal, are invented simply as vehicles for financial bods to earn commission.

Remember that, and you will not go far wrong.

Finance is either debt or equity. Nothing in between makes sense.

I once told this about 15 or more years ago to a friend, a City journalist then and now, and she just laughed. She didn't understand my prejudice against artificial financial instruments.

As I have an MBA, had worked at a senior financial level in a large publicly-quoted and advised a major stockbroker, I felt I knew what I was talking about.

But of course my world view was far too simplistic and common-sensical.

But look at where we are now.

Even so, you have to remember that the people who have brought this destruction about are still a lot richer than most of the rest of us.

So, in their terms, they are the winners.

The only self-inflicted injury is that they have no easy place to invest all their money to earn any significant return.

Nor do the rest of us.

angus MacLean

Those banks that have taken public purse money need to consult with their employees with a legally enforceable bonus and simply advise that this year's budget will allow them to make full bonus payment followed by statutory redundancy payment. Tax payers would soon see bonus claims retracted and the myth that the talent will leave evaporate as the City's work force re-join the real world!

maren schmidt

"The very best bankers and traders" ...Are you referring to the banksters who got us into this mess?

shark

Quote: "There are some seriously smart people...."
What an admission! They have been kicking their clients' arses too with some very seriously dishonest and devious practices for many years.
Despite your hype, not one seriously intelligent person who has compromised the Banking system, has been able to come up with an answer to the problems they themselves set the entire world.
What would you think of a neuro-surgeon who has a grand reputation and an imposing clinic but whose medical staff kept quiet about the humungous fees, extra add-ons and many dead patients because they all got handsome bonuses.
These are Humpty Dumpties all dressed up in their brightest and best and they all fell down spectacularly.

Kicked arses have scented farts in comparison.

Peterfishingfor...

At least the cupboard (para. 3) is not moving about! Come, come! Sub-editors?

Michael Prendergast.

So you are saying, leave the arsonists in charge of the fire department,otherwise,they will take their lighters elsewhere?

MK

It's easy to bash bankers (well they make such appealing scapegoats), but the public and politicians bask in ignorance and hypocrisy if they want to place ALL blame on bankers: perhaps the proposition of making money on what bankers had no option but to deal in, was a losing proposition in the first place. Consider 1. the demographics of "old people lending to young people", where young people do not appear; and 2. low quality of assets that were financed by bankers. A good skit on American SNL summed it up nicely: "I have no job, gambling problem, alcohol problem, two pregnant girlfriends, but I was forced by those evil banks to get a no-money-down zero-interest loan, I'm a victim.". Read this and weep: http://www.atimes.com/atimes/Global_Economy/JE20Dj05.html

MK

MP: "So you are saying, leave the arsonists in charge of the fire department,otherwise,they will take their lighters elsewhere?" - the problem might be, if fire department is nationalized, the fire will be available only to the politically connected and corrupt, which is even worse (much worse) than current system.

Tom Norton

Smaller banks please, and why not consider a post-bank, it would help ordinary people and firms, but Zanulabour are not interested in workers are they?