4 3 mins 9 yrs

The Rt Rev Justin Welby is only 57 years old, so it looks like many more years of wrong-headed arguments like this:

The Archbishop of Canterbury has launched a stinging attack on the City, describing it as infected by “a culture of entitlement” that has left it disconnected from the rest of the country.

Speaking to the Financial Times, Archbishop Welby acknowledged that standards in the Square Mile are higher than in the past, but he said:

“In banking, in particular, and in the City of London, a culture of entitlement has affected a number of areas – not universally by any means – in which it seemed to disconnect from what people saw as reasonable in the rest of the world.”

I’d agree on the “culture of entitlement” which he mentions. We’ve seen much evidence of that. But he then gets very confused and argues for an entrenchment of that entitlement:

Arguing that the taxpayer may have to intervene to clean up the banking system, he added: “Part of an ethical approach is transparency and reality about recognising where you are. The lesson from Japan is if you’re going to bit the bullet, it’s better to bit it sooner rather than later.”

He wants reality about recognising where we are, but it’s profit and loss which tells you where you are in business. These natural market mechanisms provide all the transparency we need, but they’ve been swept aside as institutions which should have gone bust have, instead, been allowed to gorge deeply on taxpayer’s money. This is the entitlement culture writ large, one which has seen the special interests become the greatest welfare addicts of the lot outside of government itself.

He can have his way, he can see discipline and transparency brought back into The City, but calling for even more looting of the taxpayer to bail out the politically connected banks is precisely the wrong way to go about it.

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  1. it`s profit and loss which tells you where you are in business.


    Welby was making the point that no-one believes the bank balance sheets, because there is a huge amount of bad debt not provided for. But all signed off by their auditors as “true and fair”.

  2. From which of his gold and jewel encrusted palaces was Mr Welby delivering this homily on the sanctity of poverty and humilty?

    When these people practice what they preach then I’ll pay a tiny bit of attention. Until then….

  3. Peter –

    But debt, if sufficiently bad = terminal losses and closure whatever auditors flag, if markets are allowed to liquidate bad debt.

    Welsby is calling for these signals and processes to be overwritten yet again with even more socialisation of losses/theft of taxpayer wealth.

  4. Of course his conclusion is wrong. There is no way the taxpayers should have to pony up yet more. But there is a good case for breaking up RBS into three regional banks (let`s call them NatWest, Royal Bank of Scotland and Ulster, which form the core of the current monstrosity) with a a regional focus. And sell them off with clean balance sheets.

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