Lord Turner keeps heat on bankers with further attack
Lord Turner, chairman of the Financial Services Authority, has launched another withering attack on the banking industry ahead of Wednesday's critical meeting in the US between Gordon Brown and senior bankers that will catapult bonuses back to the top of the G20 reform agenda.
Hitting back at critics of his view that parts of banking are "socially useless", Lord Turner said in his Mansion House speech on Tuesday evening: "British citizens will be burdened for many years with either higher taxes or cuts in public services because of an economic crisis ... cooked up in trading rooms where many people earned annual bonuses equal to a lifetime's earnings of some of those suffering the consequences."
He told bankers they face a future stripped of profitable businesses in which they will make "lower returns" that will leave them looking like "boring" utilities.
The cost of operating with more capital and liquidity will drain profits, he said.
"If, as a result, bank equity becomes a more boring investment, lower return but lower risk, we should not regret that. After the last year, there's a lot to be said for being boring," he said.
"Top management, in particular of banks involved both in complex trading and retail banking, needs ... to be willing to recognise that there are some profitable activities so unlikely to have a social benefit they should voluntarily walk away from them." [MORE]