Thursday, June 13, 2013

ABC Justin Welby and the Banking Commission Report (not...quite)

We woz robbed? Archbishop Justin Welby at packed St Paul's Cathedral last night gave very muted toots to his trumpet about the wrongs of banking as compared to what we have become accustomed to hearing from him. His was the keynote speech on: 'The City and the Common Good: Good Banks. Timing was all. The Parliamentary Banking Commission report has just been completed but before full publication all participants are gagged. Chairperson Stephanie Flanders warned us that that Welby could not speak about anything that gave away the contents so rather than a tirade on the evils of bank, bankers and banking (we woz  robbed) he mostly gave us positives as to what the wealth from banking ought to be achieving (we were enlightened), with the odd toot from the embargoed report detected.

He was shocked on returning to modern London after 20 years away. It is a brilliant centre of world finance which draws in talent but warned of a danger that like in ancient Sparta, the power centre with its ever higher property prices might result in it being 'served by its surrounding serfs' in areas away from the wealthy centre.  He quoted St Basil speaking to the wealthy (para 329): A great torrent rushes, in thousands of channels, through the fertile land: thus, by a thousand different paths, make your riches reach the homes of the poor' .  Wealth is to be held adventurously and generously, to find fresh channels for wealth to good purposes, whilst we should prick the bubble of self-regarding activity by wealth makers.

One biblical theme was from the Good Samaritan. The GS did not rush by - some did then, and today some of those in fast moving trading rooms might do now.  The event was recounted by Jesus in answer to a question: Who is my neighbour? The GS was a natural enemy of the victim and had no obligation to help. Another bible based theme was the model of the body: when one part hurts all other parts feel that hurt , with exhortations to stop fighting each other but work together for the common good, fullest participation and for 'human flourishing'. We have to recognise that humans are all fallible but we have to believe in them - Jesus offers salvation thus to humanity. Separately regulation, markets and moral sentiments are necessary but not sufficient alone to achieve the order needed, we need a combination of all. Liberty exists under authority, but what is legal is not necessarily right. There has been a breakdown of co-operation, trust and relationships. There will never be perfectly good banks because there are no perfectly good people. The differences in society cannot be eliminated without good banks.

Fellow panellist Anthony Jenkins , Barclays CEO, plugged 'moral capitalism' and the good things his bank is doing. John Fingleton (ex-Office of Fair Trading) championed strong competition, good markets and Adam Smith and criticised the banks for having to be dragged to good behaviour. He quoted JR Hicks 'the best of all monopoly profits is a quiet life'. Justin Welby gave a responsive toot that there are no efficient markets (the events of 5 years ago showed that) and another one from Adam Smith that when people of the same trade meet together they very often start to conspire against the public. 

The greatest applause from the capacity crowd for the supporting panellists came from Laura Willoughby's spirited speech as leader of the Move Your Money campaign who reported that in 2012, 2.4 m people moved their accounts from the big banks to smaller and other banks (-5% market share).  She accused banks of hiding information from customers 'it's what they don't tell you that matters'. She likened Anthony Jenkins' talk to a political election speech. She asked if regulators had been asleep or blind? 

She gave a shout for new homes for our money such as credit unions, mutuals and good banks such as Handelsbanken which have local autonomy.  We as customers are more likely to change marriage partners than change banks, we behave as hostages to them. Indeed the banks have taken the country hostage. I felt that she was tooting on behalf of what Justin Welby was not able to say and by the length of the applause the crowd showed their feeling for her analysis. Justin Welby when asked by Stephanie Flanders if our society was 'held hostage by the banks' said: 'I cannot comment'. Which was probably as big a toot direct from the still secret report as we got.
posted by Charles Bazlinton author The Free Lunch - Fairness with Freedom which 6 years before the crisis suggested solutions to the problems which the Archbishop is highlighting now.

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