If You’re a Banker, This Man Wants to Wring Your Neck
Nick Clegg has been digging himself ever deeper into the hole in which he finds himself.
He has now given an interview to BBC Radio Sheffield:
I am like anybody else: you want to wring the neck of these wretched people who behaved so irresponsibly and then we are now having to bail them out.
Apart from being utter nonsense (the causes of the crisis cannot simply be blamed on the banks), this is really dangerous talk. Whenever a politician starts to sneer at a class of people, and tries to blame them for all the country’s woes, you can be sure they’ve lost the plot.
Setting our people at each other’s throats is not the answer. Bankers are no worse than the rest of us. They enjoyed Brown’s boom as much as we all did.
They are now being vilified and made scapegoats for the inevitable morning after the party, by a small-minded politician who clearly has no real ideas to offer.
For the record, we didn’t have to bail out “the banks”. It was the Labour government’s decision to do so. They nationalised three banks in Britain – Northern Rock, Royal Bank of Scotland and partially Lloyds TSB (or more accurately HBOS, since Lloyds merger with HBOS, encouraged by the Labour government, is what did for Lloyds TSB).
It is blindingly obvious to all but the most blinkered commentator that Northern Rock could have been allowed to fail – while protecting the depositors, of course. It would most likely have been bought by a competitor, possibly by Virgin, who were interested at the time. The government later followed a more sensible course with Bradford and Bingley.
And what about the big two supposedly bust banks – RBS and Lloyds? Did we really need to bail out their shareholders and bondholders as we did? Remember, bailing out the banks is not the same thing as bailing out depositors.
So what was the alternative? Well, RBS could have gone into receivership. The Bank of England would have provided the liquidity to protect depositors and enable the bank to continue running while the receivers looked for a buyer for the business. In receivership, the assets could have been disposed of in an orderly way and the bank broken up and sold off. Yes, the bank’s lenders would have lost a proportion of their money. But that’s a risk you take when you lend to a company.
As it is, those lenders risks and potential losses have been transferred to taxpayers. Note the irony of a government that, when it nationalised RBS, proclaimed that it would eventually make a profit by selling it.
Gordon Brown tried to have it both ways – arguing that RBS was bust, but it was a great investment for taxpayers and he could sell it at a profit.
Regardless of all that, what of the more sensibly run banks like HSBC, which is very much solvent and thriving? Was the crunch their fault too? Was the crunch the fault of the teller behind the counter of your local Barclays?
According to Nick Clegg, it was. He wants to wring all their necks. I guess he would deny that. “Of course,” he would say, “I wouldn’t wring that teller’s neck, just the Big Bad Bankers whose fault everything is.”
But he didn’t distinguish, did he? If you work for a bank, don’t forget. We all know you work for Britain’s most successful and crucial industry, and have a right to be as much a valued part of our country as anyone else. But the Liberal Democrats want to wring all of your necks. Remember that in May.