I wonder…

Woolly Hutton wants to tell us all of the glories of Rhineland capitalism again.

There is another approach, more widely used in mainland Europe and Japan. It is best illustrated by a story from yesterday\’s Financial Times about the Reading-based Magal Group. Owner Gamil Magal wants a £1.5m loan from RBS to tide over his engineering firm during the recession, collateralised against £12m of assets. The company is solid but now losing money; properly supported it might survive. In Europe and Japan, banks tend to be supportive of their Magals, with whom they have long-term relationships. They certainly demand restructuring and redundancy, but they shepherd the scaled-back firms to recovery, offering not just finance but advice and business knowledge.

In Britain banks do not support such relationships. But they do know British financial protocols. RBS, says Magal, responded to his request by sending him an insolvency expert.

What he misses is that while it is true that British retail banks do indeed not usually have such relationships, we do have, in a way that Japan or Germany do not, capital markets which extend down to companies of that sort of size.

I agree that the bond markets aren\’t exactly open right at the moment, but in more normal times this sort of size of company could quite happily put a £10 million bond issue. Or raise outside capital through AIM. Those are options not available in the Rhineland model.

Which model is better is an issue for another day…..but not to mention this seems a tad naughty by Hutton.

This I thought more amusing.

When RBS was privately owned, he would not have dared complain and tempt such awesome power of life and death. In today\’s climate, he feels he can go public.

Is this a coded message to whichever bank funds Mrs. Hutton\’s buy to let empire?