A celebrated FTSE 100 boss I know told me an amusing story the other morning over a plate of smoked salmon and scrambled eggs. He said he had agreed to talk to a group of students at his old university last month and had taken a straw poll to gauge their opinion of the City. A healthy majority of them said they’d never consider becoming bankers – a startling revelation given the scarcity of graduate jobs out there at the moment.
His words rang true last week when we were informed by the Parliamentary Commission on Banking Standards that senior bankers are likely to face jail terms should they be found guilty of “reckless misconduct” in the future and bonuses could be delayed by a decade. While politicians jockey for position on the issue of privatising Britain’s bailed out banks RBS and Lloyds Banking Group, I was also personally saddened by news of the departure of Stephen Hester. The RBS chief executive had been making progress in what was unenviably tough job and seems to have ultimately fallen victim to politics.
It was also a week to say a public goodbye to Sir Mervyn King, who gave his last Mansion House speech as Bank of England governor on Wednesday evening. After 23 years at Threadneedle Street, and a decade in the top job, Sir Mervyn will step down on 30th June. I was heartened to hear that the intellectual heavyweight will not be disappearing from public life altogether and will instead take up a life peerage following nomination by the Prime Minister.
The Bank is likely to appear quite a different place once Canadian Mark Carney takes on the top job on 1st July. Economists tell me that a further dose of quantitative easing is still a possibility despite recent positive data which suggests growth in the second quarter is likely to outpace the 0.3pc achieved in the first. It is almost certain, they say, that Mr Carney will follow in the footsteps of America’s Federal Reserve and provide more guidance on the likely future path of monetary policy.
Talking of the Fed, there has been a lot of action across the pond in recent days. First from President Obama, who has suggested Ben Bernanke’s tenure as chairman is drawing to a close, and second from Bernanke himself, whose comments on Wednesday evening fuelled expectations that the Fed will begin to unwind its monetary support sooner rather than later. His words of wisdom (and further signs of a slowdown in China) drove equities, bonds and commodities lower, emphasising the addiction to central bank stimulus that markets have developed.
Elsewhere, gold hit a two year-low and silver was at its weakest point since September 2010. My City sources tell me that a further slide in gold prices and other commodities is likely given the gloomier outlook coming out of China and the implications of a stronger dollar following the Fed’s comments.
That’s all for now, I’m off to spend a few days at Wimbledon. In the meantime, why don’t you tell us how you’ll remember Sir Mervyn?
I know for a fact that he’s looking forward to spend more time at the cricket and watching his beloved Aston Villa… well, somebody has to.
Until next time…
To give our clients a different and uniquely informed perspective on the financial markets, Capital Spreads introduces “The City Insider”, a fortnightly view from a City expert, with a senior network of influential bankers, investors, economists and analysts. The identity of the Insider is anonymous – and a closely guarded secret – in order to allow our expert to express forthright, personal views and to protect the identity of the City figures upon whose opinions the Insider draws.
by City Insider
Is it time to stop bashing bankers?
Jun 25, 2013 at 1:38 pm in Market Commentary by City Insider
A celebrated FTSE 100 boss I know told me an amusing story the other morning over a plate of smoked salmon and scrambled eggs. He said he had agreed to talk to a group of students at his old university last month and had taken a straw poll to gauge their opinion of the City. A healthy majority of them said they’d never consider becoming bankers – a startling revelation given the scarcity of graduate jobs out there at the moment.
His words rang true last week when we were informed by the Parliamentary Commission on Banking Standards that senior bankers are likely to face jail terms should they be found guilty of “reckless misconduct” in the future and bonuses could be delayed by a decade. While politicians jockey for position on the issue of privatising Britain’s bailed out banks RBS and Lloyds Banking Group, I was also personally saddened by news of the departure of Stephen Hester. The RBS chief executive had been making progress in what was unenviably tough job and seems to have ultimately fallen victim to politics.
It was also a week to say a public goodbye to Sir Mervyn King, who gave his last Mansion House speech as Bank of England governor on Wednesday evening. After 23 years at Threadneedle Street, and a decade in the top job, Sir Mervyn will step down on 30th June. I was heartened to hear that the intellectual heavyweight will not be disappearing from public life altogether and will instead take up a life peerage following nomination by the Prime Minister.
The Bank is likely to appear quite a different place once Canadian Mark Carney takes on the top job on 1st July. Economists tell me that a further dose of quantitative easing is still a possibility despite recent positive data which suggests growth in the second quarter is likely to outpace the 0.3pc achieved in the first. It is almost certain, they say, that Mr Carney will follow in the footsteps of America’s Federal Reserve and provide more guidance on the likely future path of monetary policy.
Talking of the Fed, there has been a lot of action across the pond in recent days. First from President Obama, who has suggested Ben Bernanke’s tenure as chairman is drawing to a close, and second from Bernanke himself, whose comments on Wednesday evening fuelled expectations that the Fed will begin to unwind its monetary support sooner rather than later. His words of wisdom (and further signs of a slowdown in China) drove equities, bonds and commodities lower, emphasising the addiction to central bank stimulus that markets have developed.
Elsewhere, gold hit a two year-low and silver was at its weakest point since September 2010. My City sources tell me that a further slide in gold prices and other commodities is likely given the gloomier outlook coming out of China and the implications of a stronger dollar following the Fed’s comments.
That’s all for now, I’m off to spend a few days at Wimbledon. In the meantime, why don’t you tell us how you’ll remember Sir Mervyn?
I know for a fact that he’s looking forward to spend more time at the cricket and watching his beloved Aston Villa… well, somebody has to.
Until next time…
To give our clients a different and uniquely informed perspective on the financial markets, Capital Spreads introduces “The City Insider”, a fortnightly view from a City expert, with a senior network of influential bankers, investors, economists and analysts. The identity of the Insider is anonymous – and a closely guarded secret – in order to allow our expert to express forthright, personal views and to protect the identity of the City figures upon whose opinions the Insider draws.