Spring is coming, Harry is doing a grand job in the former colonies, the Queen and Kate have made roaring start to the jubilee year and the supermarket is starting to fill up with Olympic paraphernalia. Generally all this makes the world look just a little better and I continue to believe 2012 is going to be a better year – whatever that means.
As things get better (and they will) we must not lose the opportunities to learn. One thing we have learned is that we cannot trust the bankers or the government not to steer us into the next recession, whenever we climb out of this one. The question remains though whether the bankers or the government have learned anything, and the indications are not good.
The number of voices telling us to stop the ‘banker bashing’ seems to be increasing. David C started this, Bob Diamond from Barclays said we must ‘move on’, and most concerning, a conference of the Next Generation Finance Consortium called for this.
Most of us don’t trust a politician like David C anyway and Bob Diamond has shown that he is very good at taking care of himself, his bank and actually of his gambling activities – Barclays Gambling Inc (or whatever it is called) did quite well in the financial meltdown under his leadership, but I get concerned when the Next Generation Finance Consortium says it also.
What is the NGFC? It is a group of people involved in new forms of financing, particularly for SMEs, better known as Enterprise Britain. Crowd funding is at the core though it ranges from angel finance to full scale crowd funding. An enterprising group of people with great initiatives, who of course do not want to be distracted by the mess the bankers made and I agree with that, but it does not mean we should simply ‘move on’.
Let us not forget where crowd funding comes from – it comes from the frustration of not being able to raise money from traditional sources due to regulations and costs. With the experience of the last few years, the importance of alternative sources of finance is only becoming clearer and both the regulators and the banks will fight this trend hard – the politicians will support it because they have to be seen to, but they will not be able to stop regulators and bankers.
We all make mistakes, both in business and in our personal lives. What is important is that we learn from these mistakes and that we develop. Well the people who run our banks have not and I am sure the regulators have not – the FSA is too busy figuring out how to justify its new existence to release us from any kind of regulation, however sensible that might be.
Mr Diamond has said we should move on, just as his bank was found to have tucked away several hundred million in unpaid taxes – not quite fraud but certainly enough to tighten the tax rules retrospectively. To make sure he personally does not get affected the bank paid some taxes for him – only a few million so nothing too serious. And Mr Diamond managed to get a bonus of several million despite the results of the bank going down and if I read the papers correctly, not hitting a single target. I wish my companies would increase their payments to me if I under performed.
The lessons have clearly not been learned. Mr Diamond is a leading banker, no doubt a very good one, so he has a God given right to massive bonuses. It simply confirms that the leadership of the banks still has an entitlement problem and I suspect the regulators do too – entitled to make our lives difficult in the regulators’ case.
I just hope that in Enterprise Britain we at least learn from our mistakes and perhaps even learn from the mistakes of others – even if they are bankers. In the meantime, bash away!