The banks got us into this and the banks must get us out of it. Robert Peston is not the only commentator to lay out the arguments in favour of calling the lynch mobs off the hated financial sector. “Statements today by Barclays and Lloyds indicate that banks should be over the worst.”
Whatever happened to all those demands for tougher regulation? Peston touches on the debate that the EU havent the competence to lay down a new regulatory framework. Lurking behind their upfront good intentions may be the ambitions of Frankfurt and Paris to dislodge the City as the financial powerhouse of Europe, maintains the Indys Jeremy Warner. Banking uplifts are only the tip of the iceberg of recovery but all the angst about the bankers greed mustnt lead us into cutting their noses to spite our own faces.
Yet here comes the inevitable downside to this counterswing of opinion on the banks, flagged up by John Waples in the Times.
(There) may be good news if you are a bank, and encouraging news for governments around the world which need financial institutions with healthy balance sheets for economies to recover. But it is bad news for anyone in business. It is business that is paying for the banks to recover, and it is a steep price.
The stories from company bosses, both big and small, about the new charges that banks are introducing for even the simplest transaction are horrifying. A covenant renegotiation that a few years back would have cost £250,000 is now £2m. A loan refinancing for a mid-sized company can set you back the cost of a secondhand Boeing 737 (£12m).
So what are to make of all that? The latest round of quantitative easing is clear evidence that general recovery still lies over the horizon. Hamish McRae reckons slow, modest recovery is the best we can hope for.
Prices are “normal” again. If that is right, there is scope for several years of steady, unremarkable advances. Unexciting? Sure, but after the recent madness a bit of a relief.