Thursday, June 23, 2011

Banks, but no banks

I quite like the idea of giving everyone shares in Lloyds and RBS, because there is a nice neatness (almost a sense of closure) to the concept of us getting something back from the banks we saved. But at the same time I think it’s an unworkable stinker – quite apart from the issue of whether it wouldn’t be better for the government to sell the shares normally and use the proceeds to cut public borrowing.

Mr Clegg said that it was “psychologically immensely important” for people to be given a stake in the banks … to turn RBS and Lloyds Banking Group into “people’s banks”. … “The idea is that people could buy or sell shares over time.” … Mr Clegg said the proposal would create an army of private shareholders that could hold some of the big banks to account, replacing institutional investors who had done too little to curb boardroom excess.

I see his point. But I don’t think it’ll work. He’s reckoning that people will think:

Ooh, shares in a couple of banks that almost went catastrophically bust! That’ll definitely be a good investment, I’ll hang onto those for the long term and certainly not sell them immediately.
And I’m sure everyone else won’t be selling them immediately either, because that would (a) depress the price of the shares, limiting the benefit that people would get and hitting public confidence in the whole exercise, and (b) quickly concentrate ownership of the banks back in the hands of large institutions.
What’s more, now that I own 0.0000018% of RBS and 0.0000009% of Lloyds, I can use my spare time to become an active shareholder and contribute to how these banks are run. It’ll be like the Big Society meets the minutiae of financial corporate governance – I can’t wait!

I suppose it’s possible, but I wouldn’t bet on it.

Monday, June 13, 2011


Last year I thought David Miliband would be a more capable Labour leader than Ed; I still do. But I worry about the idea of (somehow) replacing the one with the other.

The main thing most people know about Ed is that he beat his brother to get the job – and they think that’s a bit odd, and maybe a bit suspicious. That’s a pity. But for Labour to go on to dump Ed and install David would magnify this ‘dysfunctional family’ thing a thousandfold. And it could make the party look very short of talent. Speaking of which...

If there were another credible leader in the wings, the dynamic might be different, but I don’t see who that would be. So, for the time being, we’re stuck with Ed.

Monday, June 06, 2011

The timelessness of news values

My colleague K, who is trawling through old newspapers for her dissertation, has just unearthed this report from the Daily Express in 1965: