The British have a love/hate relationship with the City. It is a complex issue, complicated by a history of class antagonism, the North/South divide and lingering confusion about what the City actually does (ie, is money made in the City 'real'?).
(I set up a information service for the European finance industry a while back, so can certainly attest to the reality of City money and its role in exports.)
I woke up this morning to hear Robert Peston arguing that the public's anger at bankers puts at risk one of the few industries in which our country has comparative advantage. In this he repeats arguments I have been making recently about the dangers of throwing the baby out with the bath water, and buying into myths about manufacturing.
There is a very large 'but'. That is, there is more than a whiff of truth in the criticisms of banks and bankers, and the government (to its credit) is pushing hard for deals where banks clean up their act in return for taxpayer support. Note the comments underneath Peston's article (on the Peston link above).
This makes today's stories about Barclays particularly pertinent. The often persuasive Alphaville crew believe the bank is seriously challenged by today's revelations. Certainly, such large-scale 'strategic tax planning' is not the 'humble' and socially-aware form of banking that the government (and public) wish to support.
Instead, the activities of Barclays' SCM look like the kind of discredited complex and aggressive behaviour that characterised the banking world during the credit boom.
3 days ago