There was a time when one had to wait at least 20 years between big banking crises. Perhaps this was because the generation that had learnt the hard way had to retire before the next crop could repeat the mistakes of their elders. This is no longer the case.
Business leaders who were present at the most recent crash seem determined to ignore its lessons — even before the damage has been repaired. The latest example comes courtesy of Carolyn Fairbairn, head of the CBI, the UK employers’ organisation. Among her suggestions: scrap the bank surcharge tax and ensure that regulators give priority to the sector’s competitiveness. “It’s time,” she says, “for banks to be taken off the naughty step. This is about sending a signal that a chapter [of crisis] is over.”
Really? The crisis is not over. The damage done has yet to be repaired fully. Eight years after the collapse of Lehman Brothers, interest rates are at historic lows; government deficits are high; and two of Britain’s biggest banks remain in state hands. Low rates are driving pension deficits higher. Plugging these deficits diverts funds from companies — funds that might otherwise have gone into building up their businesses.
To read the full Financial Times Op-Ed by Robert Jenkins click here.