There’s no doubt the global recession that first began in 2008 was in part due to the greed and wanton disregard for risk by some in the banking community. No one can say for sure that this was the only cause, but most experts would agree that it far from helped an already precarious situation.
But are the banks getting too much bad press or are they just reaping what they sowed? To a certain extent, they most definitely are reaping what they sowed. Banks and investment companies moved massive amounts of money around the globe and sold and resold the debt of countries and individuals in a virtual market that had to come home to roost at some point, but there is a large element of hypocrisy in the current vilification of bankers. When times were good and whole countries and economies were benefiting from the risks being taken and the rewards being gained, little mention was made of the behaviour and risk-taking of the banks and investment brokers. Private individuals who are losing money now would have been only too happy to have taken positive improvements on their investments without breathing a word or asking difficult questions of the methods being used to provide the huge returns.
Now that the full effect of the risks being taken and the reckless working practices of some bankers has come to light, it’s fashionable to knock them and their industry, but the truth is that many of those now attacking the banks will have gained greatly during the boom years and were only too happy to have done so. Once through the hard times, the banks will continue to make money as global economies recover and countries will once again be quietly glad of the tax revenues and dividends being paid.
The bonus paying culture in many financial institutions could be argued to have moved straight back to pre-recession ways and this could be taken as the first indication that little will change in the future once the hard times recede and economic growth returns. In truth, governance and control of banking firms will inevitably change. Controls will be tighter but consumers, investors and shareholders will long once again for the good times and the boom times that will see them benefit from healthy banks and investment houses.
While the world takes its anger out on the banking world, maybe a thought should be spared for the good times when they inevitably arrive once again and the level of general hypocrisy that is bound to result.