Oliver Kamm at The Times, a man I respect a lot, argues in his blog that banks are not a “vested interest”.
But unless I have misunderstood him, I think he is being too charitable to the banks.
He argues that “the banks are not some unaccountable lobby seeking to superimpose itself on the public interest: they are an economic sector seeking to maximise profitability within the regulatory framework”.
It’s worse than that. Banks are unaccountable, since they are not allowed to fail – and capitalism without risk of failure corrupts absolutely.
They do seek to superimpose themselves on the public interest: even now, the notion that what’s good for the City is good for Britain is pervasive among many senior officials.
Nor is the regulatory framework a given: it is shaped by banks’ lobbying and the revolving doors of finance and politics: boardroom positions for politicians and government advisory roles for bankers – including the astonishing appointment of “Win” (or should that be “Lose”?) Bischoff, the former chairman of failed Citigroup, to co-chair the writing of a report on the future of UK international financial services.
Like Oliver, I am a supporter of open, competitive markets. That’s why I find it so worrying that we have allowed a complex oligopoly that earns vast monopoly profits in the good times and passes on the losses in bad to amass such huge economic – and political – power, as I argue in my new book, Aftershock: Reshaping the World Economy After the Crisis, which is out on 6 May.
Banks are a vested interest – and a dangerous one at that.