Bankers are people too
I started a Masters in financial journalism in September. I had the pleasure of attending a heated lecture this week where the speaker waxed lyrical about how he felt the incompetence and excessive remuneration of bankers caused the latest economic crash.
He said the banks should have been allowed to fail, nationalised, split up and sold on once they returned to profit - this caused a student to storm out.
The student’s complaint was that this was an overly simplistic way of describing the crisis which neglected the role of the regulators, credit agencies, shareholders and investors, as well as the work some bankers put in and the wealth they created and spent in the economy.
The lecturer retorted that he would prefer they had done less work so less damage was done.
Is there a place for sticking up for financial services? Has the narrative moved on from the causes of the crash to the cures or are we stuck in a cycle of banker bashing?
Everybody accepts that “bankers” - the catch all term for individuals who involved themselves in risky lending practices - behaved irresponsibly. Some have suffered with regulatory bans, although others have got off with large pay-offs and a nice pension.
Should there be sympathy for bankers having their bonuses or pay cut? Maybe not. What about empathy for those left in the industry at firms now struggling from the prospect of another crash and facing bank failure or redundancy? They also have bills to pay.
It is easy to argue that bankers are paid too much because they do not contribute to society like a doctor or nurse. But how relevant is that point. People can choose their vocation. Is it a banker’s fault that the remuneration levels are so high?
Surely that is just capitalism? Should IFAs be sympathetic? After all, the advisory sector has often been demonised, particularly by the FSA which in the past has painted it as being full of commission hungry salesmen.