Banking ten years on

I was lucky enough to be a student during the banking crisis which meant I had time to read about it, research it and indeed to write about it.

I remember my anger at reckless and greedy bankers. I remember too the calm reflection that pointed the finger at me, at us. Bankers may have been reckless and greedy, but we, as members of pension schemes, wanted our pensions. If we had savings, we wanted a return.

The reality though was that high returns were a thing of the past. Chinese surpluses had provided all the cash the western world needed and interest rates could be rock bottom. It didn't matter.

We have now lived through ten years of rock bottom interest rates. From time to time amazing investments appear, only to disappear. Ironically for British investors Brexit provided a shot in the arm: a weaker pound meant that the non sterling earnings of global British companies were worth more overnight. Returns have been good and will remain so, unless we decide to invest in the UK economy which, what any one says, is suffering.

As a nation we can no longer pay our way. Look at the evidence:
The NHS needs billions more just to stand still.
University lecturers want decent pensions; actually everybody does. The reality is that the investment returns simply aren't there to provide them.
We are desperately short of housing, yet houses have never been more valuable.
Government outsourcing was meant to be a panacea. Now outsourcing companies are losing money and going bust.
High Street names failing to survive

Labour wants to take over banking so that banks lend to businesses rather than providing mortgages on over priced residential property or providing ever increasing credit card debt. This is laudable but it ignores what banks have become. They are global. They make a good slice of their money from trading currency and securities and this profit provides much needed tax revenue. There is no longer the bank manager in his sober grey suit. The world has moved on.

Any government seeking to address the economic issues facing this country needs to take the country as it is, not as it was in the 1950s. It needs to recognise that it can only effect change if it works with like minded governments of like minded nations. It can do nothing alone.

The scene of the 'march of shock' following the referendum result.

Ian Jack's article is a helpful reference