Pencil in this one -- hell, ink it -- in the stupidity column. This story appeared in today's Wall Street Journal, in the Money & Investing section.
U.K. Bank Group Lashes Out at 'Irresponsible' Reforms
LONDON -- The U.K.'s leading banking association ended 2009 with a bang on Wednesday, accusing authorities of impulsive reforms that could undermine the U.K. as a top financial center and crimp future economic growth.
In an outspoken end-of-year statement on Wednesday, Angela Knight, Chief Executive of the British Bankers' Association, lashed out at the sector's critics, saying U.K. banks were being unfairly blamed for causing most of the country's economic woes.
Now, let's see: the financial calamity and economic crisis arose from the actions of banks and investment banks, the taking of extreme risks for the potential large rewards, and only the rescue of the government saved the banks and the financial system from disaster -- so, what isn't fair?
U.K. banks know "they have few - if any - friends. They understand they are held responsible for the whole problem - even when this is manifestly not the case," she said.
Friends? Manifestly? What universe are these people living in?
Ms. Knight offered blunt criticism of U.K. authorities, which include the treasury, the Bank of England and the Financial Services Authority, saying they had rushed ahead with "irresponsible" reforms on remuneration and capital requirements that go beyond what others have done.
She criticized everyone, except herself and her industry, for, it must be assumed she thinks, they are wholly blameless.
"There are literally tens, if not thousands of British jobs directly and indirectly related to banking - bringing billions of pounds in tax income," she said. "Some of this is now at risk and, although many are well aware of it, decision makers increasingly either wish to ignore it or - even more dangerously - choose not to believe it."
Depends what one wants to believe.
The U.K. banking system has recovered some of its strength this year, with several leading institutions reporting large profits in recent months. However, there is still broad public anger over the financial crisis, which saw the U.K. government inject tens of billions of pounds worth of taxpayer money into major banks, like Royal Bank of Scotland and Lloyds Banking Group and offer hundreds of billions of pounds worth of debt guarantees, loss insurance and liquidity support.
And the government is to blame for everything bad, even for the weather.
The banks have faced a particular outcry over bonus payments, with Chancellor of the Exchequer Alistair Darling imposing a 50% tax on bankers' bonuses above £25,000 earlier this month and other U.K. officials accusing bankers of having "tin ears" to significant reform. Nor have the opposition Conservatives offered much support for the sector with a general election due over the next six months.
Even the Tories realize that to defend bankers is a sure way to lose votes, and Tories need and want votes.
Meanwhile, FSA Chief Adair Turner has said U.K. authorities should consider whether some financial activities are socially useless and should be banned and questioned whether the banking system has simply grown too big.
Socially useless. Has quite a ring to it.
However in Wednesday's statement, Ms. Knight said authorities' demands that banks increase capital and liquidity reserves "have the potential to drastically reduce economic growth and restrict lending." Meanwhile she attacked as "stupid" the calls by some, including Bank of England Governor Mervyn King, for larger, more complex banks to be split up.
Have the potential to reduce lending? Is there enough lending being done? Stupid? It was stupid and irresponsible to allow such behemoths to come into being in the first place.
Ms. Knight said financial centers overseas "are waiting ready to pick up the business from the wreckage we will leave if we are stupid enough to discard a banking model which has served us well."
And she argued that many of the reforms needed in the U.K. banking system have already taken places, with new measures to prevent irresponsible lending, new regulations to clamp down on derivatives trading and a more aggressive approach from bank boards.
Enough change. Now, leave us alone (until the next time we need to be rescued).