I was aware that, compared with other businesses – and certainly compared to the salaries and bonuses they pay – the big banks are no longer profitable enough to carry out the basic jobs of providing banking services that they were originally designed to do.
Love them or hate them, everyone seems to agree that banks need to end the pretence of free banking. It isn’t real and it leads to the kind of swinging charges on the people who can least afford them.
But no bank can realistically go it alone on this, and if they try to agree between them they will go to prison. So what can they do?
The answer seems to me that the government needs to facilitate some kind of legal discussion on the future of public service banking, involving all their stakeholders, so that these issues can be resolved in public.
And also, some kind of agreement whereby the banks pay for and mentor the local lending infrastructure that can lend in the places and sectors where they quite patently can’t.
But there is another element to this, which is finally now being spoken by regulators in the USA. The big banks over there have paid out more than $100 billion in fines over the past six years for their behaviour, but still seem unable to reform.
New York Federal Reserve chief William Dudley said, quite rightly, that it they were too big and complex or their systems were irredeemably unfixable, then they would have to be broken up. This is what he said:
"If that were to occur, the inevitable conclusion will be reached that your firms are too big and complex to manage effectively. In that case, financial stability concerns would dictate that your firms need to be dramatically downsized and simplified so they can be managed effectively.”
That moment is now arriving and not before time. But there is a big difference now.
Six years ago, at the height of the crisis, frontline politicians were nervous about taking the big banks apart because it looked vindictive. It looked anti-business.
Now it seems to me to be the other way around. Enterprise is crying out for effective, trustworthy banks, that are no dedicated to short-termism and are not dedicated either to sucking up all the available talent and capital from the productive economy,
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