On the first anniversary of the collapse of Lehman Brothers, politicians, bankers and commentators were queuing up to pass judgement on the financial services sector yesterday.
The bankruptcy of the investment management firm marked the start of the financial crisis, creating a domino effect across the world as the extent of financial institutions’ sub-prime exposure was uncovered.
The prime minister said we need ‘more responsible banks’. So clearly he’s on board with our calls for responsible finance….errrm, maybe?
However the PM seemed to be talking as if his government were passive observers of the financial services sector, not the ones responsible for reforming the way banks operate.
If Gordon Brown is so ‘appalled’ by the bonuses that are returning to the City, why is he so reluctant to take action? (though please, let’s stop thinking remuneration is going change the system! – http://www.urbanforum.org.uk/community-reinvestment-blog/stop-attacking-bankers-bonuses).
There is apparently ‘unfinished business’ to be completed in the City, so will the banking reform white paper do the job? I’m not holding my breath.
So we’re one year on and what has really changed?
Have we learned the lessons to ensure we avoid the same situation arising in the future?
These questions were being asked and no one seemed to be queuing up to say the world had changed for the better.
In the US President Obama issued a stark warning to the banks not to ignore the lessons of the past, saying ‘we will not go back to the days of reckless behaviour’.
Among the interesting comments from financial services experts was an American billionaire fund manager (who had previously warned of an impending financial crisis) suggesting we’d ‘learned the wrong lessons’ and that things were actually even worse. Oh dear. (You can see what they had to say on the BBC website – http://news.bbc.co.uk/1/hi/programmes/newsnight/8254381.stm)
So we have two weeks left to respond to the banking white paper and ensure our politicians deliver on their promise of real reform. As for the alternative? I think Vince Cable summed it up nicely: ‘they will be rubbing their hands with glee…this marks a return to business as usual in the City’.
Find out more about Urban Forum’s proposals for bank reform – http://www.urbanforum.org.uk/our-proposals/cr-proposals