It is almost a decade since the financial crisis and barely a day has gone by without banks being in the headlines, invariably for the wrong reasons.
Only last week, RBS – 73% owned by the state since its bail out in 2008 – announced it was taking a £3.1bn hit as a result of a case brought by the US Department of Justice over the way the bank packaged and sold mortgages during the great housing bubble that preceded the crash.
RBS is just one of many. Banks have been fingered for, among other things, money-laundering, rigging the money markets, and mis-selling payment protection insurance. The total amount paid out by banks for various malfeasances since the financial crisis stands at £250bn and rising.
Despite being serial offenders, banks have been the big beneficiaries of quantitative easing. The bulk of the money created by the Bank of England found its way into asset markets. Share prices have been rising and City bonuses will be good this year.
The even better news for the banks is that they are no longer hated. Far from it. Much of the concern about how the UK will survive outside the EU has centred on the future of the City. For years, the banks have been trying to find a way of getting themselves off the public’s naughty step. Brexit has provided them with an opportunity that has been seized with relish. The City has played the post-referendum game masterfully.
Roll the clock back 18 months or so to the time of the 2015 general election and it was a different story. Then, a commonly held view – at least for those not working in the City – was that the UK suffered from having a too-dominant financial sector. There was distaste for the way a poorly controlled financial sector had wrecked the economy with their speculative excesses and left others to pick up the bill. The recession that the banks caused and the austerity that resulted created the sense of “them and us” – the notion of an unbalanced and unequal Britain – that led to Brexit.
