Ah, but what about lending? After all, this is why we have banks in the first place: to channel money to productive industries. The Cresc team looked at Bank of England figures on bank and building society loans and found that at the height of the bubble in 2007, around 40% or more of all bank and building society lending was on residential or commercial property. Another 25% of all bank lending went to financial intermediaries. In other words, about two-thirds of all bank lending in 2007 went to pumping up the bubble.
This doesn\’t look like a hard-working part of an economy humming along: it\’s nothing less than epic capitalist onanism.
Because, laddie, you\’re looking at an example of Anglo Saxon capitalism.
Note that this is different from Rhineland capitalism.
We don\’t use banks to finance business. We use markets to do so. We use equity capital, shares, we use bonds, corporate paper, to finance business, not bank loans.
Pointing to banks and noting that they don\’t finance business isn\’t big and it\’s not clever. It\’s simply ignorant.
If the statistics don\’t support the arguments for the City\’s pre-eminence, the public don\’t either. In 1983, 90% of the public agreed that banks in Britain were well run, according to the British Social Attitudes survey. By 2009, that had plunged to 19%.
In other words, both the evidence and the voters are against investment bankers. So why do the politicians cling on to them?
And that is pure cretinism. Investment bankers are those people who do all the stuff with bonds, equity and commercial paper. They are the people who do the financing of business that in the Anlgo Saxon system is not done through bank loans.
You can\’t complain about both: you cannot whine about banks not lending to business and then whine about those who do finance business.
Well, all right, you can, but that will mean that you\’re condemned to working at The Guardian.