Letter in FT: Banks must verify their good powers
15 februari 2011
Today the following letter of Steward Redqueen was published in the Financial Times:
Sir, William Isaac concludes that it would be wise to allow US banks to pay dividends even though they may not have their financial house on a stronger footing (Banks should be allowed to pay out dividends. February 10) Paying dividends, he argues, will increase the availability of fresh capital which in turn will increase bank lending that creates economic growth. Whereas he may be right from a financial perspective, the outcome of this and others discussions about the banking industry will depend highly on other factors.
Already in 2008 Martin Wolf wrote in a column two years ago that no industry has a comparable talent for privatising gains and socialising losses. Globally tax payers still are frustrated about the level of accuracy of this statement.
Banks are hardly tolerated, definitely not trusted, but even less understood. They can be an extraordinarily powerful force for good throughout the economy but they should put more effort in trying to explain what exactly this force brings. More should be done to acknowledge where they can improve and how this will be achieved.I am convinced that explaining the ‘societal dividend’ they are generating, is of capital importance for banks around the world.
Already in 2008 Martin Wolf wrote in a column two years ago that no industry has a comparable talent for privatising gains and socialising losses. Globally tax payers still are frustrated about the level of accuracy of this statement.
Banks are hardly tolerated, definitely not trusted, but even less understood. They can be an extraordinarily powerful force for good throughout the economy but they should put more effort in trying to explain what exactly this force brings. More should be done to acknowledge where they can improve and how this will be achieved.I am convinced that explaining the ‘societal dividend’ they are generating, is of capital importance for banks around the world.
Wouter Scheepens,
Steward Redqueen,
Steward Redqueen,
Haarlem The Netherlands