This speech has just been given by Robert Jenkins, Member of the Bank of England’s Financial Policy Committee, exposing three big myths wielded by the banking lobbyists. It doesn’t seem to have got the attention it deserves.
- Myth 1: We must choose between bank safety and growth
- Myth 2: We must choose between bank safety and banks’ returns on equity (also see Martin Wolf on this, here.)
- Myth 3: Governments must choose between stability and the “competitiveness” of their domestic financial centers.
Myth 3 is my favourite, and I explore the weasel words ‘competitive’ and ‘competitiveness’ in Treasure Islands in some detail. But the first two myths are also extremely important to unmask and Jenkins does a fantastic job of exploding these myths, each in a few sentences. Read his short speech here.
Anyone who wants to understand the direction that financial reform needs to go in has to get their heads around all three of these.