In defence of banks

Many happy returns to Cicero Speaks.

I take it you enjoyed conversing with me so much last week that you wanted to come back for more of the same, more of my thought provoking warm wit and wisdom. Thank you. I will try not to let you down.

And if this is your first time here. Welcome. Stick around. You will get soon the hang of this. And I hope you will be so stimulated by my thoughts and views on marketing, on business, on life, that you will want to come back and will want to take part in my Great Big Conversation.

And please let me have your thoughts on my thoughts. It is very lonely writing for you. Mr Google has laboured long and hard to allow you to comment on my words.

This week I want to stick up for banks. I know this is bound to be controversial but someone has to before we all get consumed by our choleric anger against them.

And before I start let me declare an interest. I am no apologist for the banking industry in this country but until recently I practised my marketing arts and science at one of these fine establishments. The banking industry has been good to me-it paid for my house, my car, indeed it funded my entire lifestyle, as it does for us all though in a very different way. And I do want the industry to be around to fund my old age which is coming up fast towards me. My future is almost behind me.

Now I may be stupid but I am not so stupid as to think that banks are entirely blameless in the situation we are now in. I understand that banks are guilty of humungous errors over the past few years. Only an idiot would think that if you lend money to a Tennessee trailer park resident with no income, no job and no assets, that you are going to get it back. And only someone who is severely learning disadvantaged would think it commercially sensible to buy these loans along with loans to his cousin from Texas, his wife’s sister in Alabama and his brother-in-law’s cousin’s wife’s friend in Florida. Sorry I forgot, that is exactly what the bankers did with our money.

Banking used to be easy. It was based on the 3-6-3 rule. You pay savers 3% for their money, lend at 6% and be on golf course for 3. But that was before the rocket scientists took over and decided to invent a whole new range of TLAs, or three letter acronyms, such as CDOs, CDS and WTFs, which no one, including me, understands. As my old boss (and in case my old boss is reading this, when I say old I mean former, you are not old, honest) used to say ‘if you don’t understand what you are buying and selling, don’t buy or sell it’. Wise words.

I think you will be with me so far. But you will no doubt be wondering how I can stand up for these morons. Let me try to explain. Let us look at why these bankers, and I know I am only one letter out, did what they did.

In some respects we must all share a responsibility for what happened, unpalatable as that might sound. Do we not believe we have an inalienable right to right buy a house with a cheap mortgage? Did we not think that our spending on cars, holidays, clothes and the rest via our flexible friends was a basic human right? And did we ever for a moment consider where the banks got the money to lend onto us?

Sure we gave the banks our savings to help fund the boom we have all enjoyed over the past few years but that was nowhere enough and so banks also got money to fund our insatiable desire for cheap borrowing from dodgier, riskier and more incomprehensible sources of funding. Yes I know the banks wanted us to borrow but we as consumers were not exactly slow in taking and spending it. Indeed to fund our borrowing ‘needs’ it is estimated banks need an additional £700bn over above what they get from savings. Where do you think this money is going to come from? Are we going to save an additional £700bn? I don’t know about you but I am a little brassick at the moment.

And now we all think we are all shareholders in these banks. We are not, except of course RBS where we are shareholders. As taxpayers we have only lent them the trifling sum of £40 odd billion plus a few more hundred billion in guarantees, soon we will be talking real money. And this money was given to them not so they could lend but so they could be safe and strong.

As a taxpayer I would like my share of this loan back. And I want to see banks big and strong and profitable, keeping our savings safe and generating profits to pay tax again. Don’t you?

This means that the banks have to lend sensibly and behave commercially. This does not give us the right, no matter how unfair it might seem, to demand higher savings rates, lower mortgage rates, increased lending to small businesses, an end to repossessions and even, and I kid you not, I even heard this on the radio, the right to 6 Nations rugby tickets since this is sponsored by one of the many banks we now think we own. I would like my money back as soon as possible

So going forward I would like the bank which has got my tax money to return to health at the earliest opportunity. I want it making good returns again, not excessive ones, good is good enough for me. I would like it to do this with great humility. And I want us as consumers to remember the part our greed played in bringing this about.

That is why I am standing up for banks.

And finally, here’s a thought. Are there any streets in London that are not being dug up? Everywhere you look there is a hole in the road. I play golf and I share my golf course with herds of rabbits, themselves inveterate hole diggers. I believe that there are less holes on my golf course than there are in central London currently. What is going on? Why has London taken on the appearance of an Ementhal cheese?

And that note, I’m off. See you again next week.

Ave atque vale. Et este fornatus.