Apologies for radio silence (you can’t do much in a place with no electricity)

This note was published in the FT on 20 Oct. It seems more topical today, and the moral is the usual one: never underestimate the greed and venality of bankers.

Even “helicopter” Ben Bernanke has stopped short of throwing dollar bills out of a slow-moving aircraft over Manhattan, but the UK government is unwittingly doing something similar. The bill for mis-selling payment protection insurance rose again this week, with Barclays setting aside another £700m. Cazenove’s analysts expect the industry total to reach £15bn.

This is not a vast amount in the context of Britain’s £1.5tn economy, but it’s a useful boost to consumer spending power at a time when it’s weak. It’s also 50 per cent more than the further cuts to public spending which the coalition says it needs to make. Since the taxpayer owns half the UK banking industry, we are effectively giving away £7bn to the PPI victims. Not quite showering fivers on the populace, but not far from it.

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