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BW Businessworld

Extract: Trust Deficit

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For The First Year After the financial crisis of 2007–2009, bankers were lying low, mindful of the anger that had been caused by the crisis and by the use of taxpayers’ money to bail out banks. French President Nicolas Sarkozy’s response to JP Morgan CEO Jamie Dimon in Davos in 2011 resonated widely with the media and the public.

At that time, most bank lobbying went on behind the scenes. Since then, however, the banking lobby has become outspoken again. As in the years before the crisis, bankers have been lobbying relentlessly and speaking up in public against tighter banking regulation. Leading bankers present themselves as experts who know and care about what is good for the economy. They are regularly consulted by leading government officials, regulators and politicians. Every utterance of a major bank’s CEO is extensively reported in the press. But whereas there is major coverage of such statements, there is actually little scrutiny of the arguments behind them...
A major reason for the success of bank lobbying is that banking has a certain mystique. There is a pervasive myth that banks and banking are special and different from all other companies and industries in the economy. Anyone who questions the mystique and the claims that are made is at risk of being declared incompetent to participate in the discussion.  Many of the claims made by leading bankers and banking experts actually have as much substance as the emperor’s new clothes in Han Andersen’s story... 

(This story was published in BW | Businessworld Issue Dated 08-04-2013)