Comment: Fresh pleas to stop bashing Britain’s bankers

MPs on the Treasury select committee tapped into stock market expertise for some insight into how those at the trading end of the banking debate viewed the process, but were told that they would have to be patient. It could take five years or more for the taxpayer to make a profit on the part-nationalisations.

A marathon rather than a sprint, then, to fully re-privatise two of Britain’s biggest banks, according to a line-up of witnesses that included Robert Talbut, chairman of the influential Association of British Insurers’ investment committee, and two of the sector’s more vocal players: Keith Skeoch of Standard Life Investments, and Richard Buxton, head of UK equities at Schroders. They were virtually at one in saying the climate for selling the shares, even at an initial loss, remained poor for reasons of economic, eurozone and regulatory uncertainty.

None of these is likely to improve in the short to middle term, with informed opinion believing the disruptive Grexit – a Greek withdrawal from the euro – is imminent.

More than one of those giving evidence at the committee lighted on what was termed the unfair “politicisation” of RBS in general, and chief executive Stephen Hester’s bonus in particular. The RBS boss would have been cheered by such sentiments as the Westminster script does not tend to go like this.

But a plea to raise the banking tone raised some sarcastic ire from veteran committee member, Labour’s George Mudie, who wondered whether it therefore behoved communities devastated by the banking industry wrecking ball to be nice to bankers.

It was that time-honoured dialogue of the deaf between financial people and politicians, Skeoch arguing that although anger directed at the bankers was understandable, it was having a negative effect on moving taxpayers on from their losses on bank shareholdings.

This is a central irony of the banking implosion. The sector collapsed under its own misjudgment and avarice, but the taxpayer will only have to wait longer to get his rescue money back if bankers remain pariahs and even get battered when they put in a good performance.

There was little comfort for those politicians still hankering for RBS to be turned into a more socially-useful bank by ridding itself of wholesale banking and focusing on high street and small business lending.

The City spokesmen gave the idea short shrift, saying that demergers, even in good economic conditions, were one of the most difficult operations for a major corporate to pull off.

In short, MPs were told there is no quick fix for the taxpayer and that it would be better for the industry’s prospects if they turned off their attacks.

Quite rarely for parliament, there was some light as well as heat.

Now Obama may get in on the act Stateside

WHEN Barack Obama came to power, one of the first things he was confronted with was the demise of Lehman Brothers, a Wall Street titan thought virtually indestructible

In response, the new president ushered in the massive toxic asset relief programme, amid much congressional horse-trading to clean up Wall Street and give consumers added protection.

However, Obama, now in election year again, sees another American banking heavyweight, JP Morgan, riven with uncharacteristic doubt after $2 billion of trading losses and blood on its boardroom floor in the form of redoubtable chief investment officer Ina Drew.

Even presidents get their Groundhog days, it seems, and America’s high‑wire banking looks to have come full circle.

Visitors to the US say there is not the same visceral antagonism to the industry as remains on this side of the Atlantic.

But JP Morgan’s woes may bring that issue back centre-stage Stateside: Obama can identify with Joe Public in bashing the bankers while indirectly invoking the controversial financial industry background of Republican challenger Mitt Romney.