Any society where young people have no hope of owning their own homes, however hard they work and however much they save, will be in great peril So anything that helps “generation rent” must be worth looking at 📨 Read HamishMcRae5's newsletter
. The essence of his message is that bank leaders should be punished for what they had done. Loss of reputation and presumably money is not enough. They should suffer. “You have to have a punishment for the people that do the wrong thing,”This is interesting on several levels. For a start, he is acknowledging what we have come to appreciate: that banks are fundamentally different from other commercial enterprises.
So what should you do if bankers have been stupid? Assume they have broken no laws, but simply made bad decisions. If directors of a commercial company make too many bad decisions they eventually, one way or another, get hoofed out. I am afraid sometimes their inadequacies are only fully revealed after they have retired, but at least there is reputational damage and probably financial damage too. However, they don’t go to jail for stupidity.
There is a wider issue here, the extent to which being a director of a bank is an attractive career proposition.
So what’s to be done? My own hope is that reputation will become more important than box-ticking. So if anyone in a top job in any industry makes a mess of things, they don’t get another top job. And they don’t get a welcome at their golf club either. This is Armchair Economics with Hamish McRae, a subscriber-only newsletter from i. If you’d like to get this direct to your inbox, every single week,
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