Brian Lucey with some advice of his own on the advice offered to Scotland by experts in banking…
The bottom line is this. Exceptionally able as most of the bank economists, financial sector analysts and FX traders may be, they are not in the truthiness business. They are paid to help their companies sell product. They are not paid to ahve a moral, ethical, or social perspective except in so far as that aids in sales.
That doesn’t make them bad persons, just employees of large impersonal organisations focused on profit the same way a starving dog focuses on a sausage. We don’t really believe estate agents guff about houses, because most of us know a little bit about living in a ‘deceptively spacious’ house with ‘great potential for a new occupier to stamp their personality on’ – a small rundown kip needing major redecoration.
We do however feel that when people talk on things that we don’t really understand we must take their views as gospel truth. It is an inverted argument from authority – I will accept that well groomed man with a confident voice talking about GNDI and fiscal projections because they are complicated things and he works in a bank. Messrs Python had things to say about bankers….
They wont outright lie, mostly, but the nature of economics is that there are always a range of outcomes from any analysis. A smart bank economist or analyst quickly learns that shading it to the corporate best interests while seeming to be and probably actually being intellectually fairly honest, that does no harm to ones career.
This cuts both ways. It is no surprise to me that a ratings agency, Standard and Poors, had what is probably as overoptimistic a view of Scottish independence than DB has a negative. A new pool of bonds to rate…surely that would have no impact even subliminally on the analysis?