In the past 18 months, the banking world has been exposed to ridicule in the media and shackled with unworkable policy proposals that mirror the experience of the farming industry in the late 1980s.
Like fanners, bankers are an easy target. The vast majority ofthe people (and politicians) don't understand what they do. The British are not only uncomfortable with the unknown, they love to chide success.
I agree, many bankers earn too much money, have little conscience and take unacceptable risks with other people's money. But die City alone contributes approximately 19% of our GDP. It creates hundreds of thousands of jobs, generates trillions of pounds for our economy, sustains numerous allied services and has defined the strength ofthe UK economy for the last 20 years which has afforded many households liquidity.
What then are the comparisons with the farming industry? In the 1970s and 1980s farming was booming. Largely due to ineffective policy and favourable exchange rates, UK farming was ahead ofthe curve. Taking advantage of production-based support we used drive, initiative and science to not only satisfy demand but saturate it. The general public benefited enormously, with the average grocery bill dropping by nearly 30%.
But the public were not interested in the reduced grocery bill in the same way that most have ail but forgotten the economic success the City gave us until the past two years. The public were solely focused on the consequence of farming's intensification; the pesticides, the habitat removal and the food scares were all attributed to the success of UK farming.
Farming's perceived "production at any cost" attitude had also fed what became two ofthe most powerful pillars of our society: the media and NGOs. Their increased influence has shaped farming today. The way the public ridicule farmers for getting subsidies for "doing nothing", the new policies heavily influenced by NGOs and even the public's negative stance on GMs can be attributed to the media - it's all direct fallout from farmers' supposedly "gung ho" actions ofthe 70s and 80s.
So the banking world is repeating farmings experiences. Politicians are proposing unworkable policies to sate public demand, the media and the NGOs. For example, Basel II defines banks' capital adequacy requirements. A fair and just policy, but dig deeper and any banker will tell you that trying to ascertain how risky a derivative trade will be is like asking a farmer to determine how his wheat will yield before it has been planted.
Like farming, banking has fallen foul of its own success with the greedy few tainting the image of the masses. And as policies, taxation and regulation become tighter, the industry becomes less efficient and the burden on the public purse increases.
Some of the brightest brains say enough is enough and emigrate: Bankers to Geneva, farmers to Eastern Europe and New Zealand. The outcome is a net loss in personnel, GDP and taxable income.
Policies have historically enabled the trading environments of farmers and bankers alike. By rewriting them to the demands of the media, politicians and policy makers are in grave danger of biting the hand that feeds them.
Like fanners, bankers are an easy target. The vast majority ofthe people (and politicians) don't understand what they do. The British are not only uncomfortable with the unknown, they love to chide success.
I agree, many bankers earn too much money, have little conscience and take unacceptable risks with other people's money. But die City alone contributes approximately 19% of our GDP. It creates hundreds of thousands of jobs, generates trillions of pounds for our economy, sustains numerous allied services and has defined the strength ofthe UK economy for the last 20 years which has afforded many households liquidity.
What then are the comparisons with the farming industry? In the 1970s and 1980s farming was booming. Largely due to ineffective policy and favourable exchange rates, UK farming was ahead ofthe curve. Taking advantage of production-based support we used drive, initiative and science to not only satisfy demand but saturate it. The general public benefited enormously, with the average grocery bill dropping by nearly 30%.
But the public were not interested in the reduced grocery bill in the same way that most have ail but forgotten the economic success the City gave us until the past two years. The public were solely focused on the consequence of farming's intensification; the pesticides, the habitat removal and the food scares were all attributed to the success of UK farming.
Farming's perceived "production at any cost" attitude had also fed what became two ofthe most powerful pillars of our society: the media and NGOs. Their increased influence has shaped farming today. The way the public ridicule farmers for getting subsidies for "doing nothing", the new policies heavily influenced by NGOs and even the public's negative stance on GMs can be attributed to the media - it's all direct fallout from farmers' supposedly "gung ho" actions ofthe 70s and 80s.
So the banking world is repeating farmings experiences. Politicians are proposing unworkable policies to sate public demand, the media and the NGOs. For example, Basel II defines banks' capital adequacy requirements. A fair and just policy, but dig deeper and any banker will tell you that trying to ascertain how risky a derivative trade will be is like asking a farmer to determine how his wheat will yield before it has been planted.
Like farming, banking has fallen foul of its own success with the greedy few tainting the image of the masses. And as policies, taxation and regulation become tighter, the industry becomes less efficient and the burden on the public purse increases.
Some of the brightest brains say enough is enough and emigrate: Bankers to Geneva, farmers to Eastern Europe and New Zealand. The outcome is a net loss in personnel, GDP and taxable income.
Policies have historically enabled the trading environments of farmers and bankers alike. By rewriting them to the demands of the media, politicians and policy makers are in grave danger of biting the hand that feeds them.
Keyword Search:
Comparative analysis;
Banking;
Farming;
Business government relations
Banking;
Farming;
Business government relations
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