So let me give you some unadulterated good news about the British economy. It is a story of enterprise and dynamism and young thrusters making their dreams come true. I am talking about a cutting-edge sector that is already employing tens of thousands of people and that has scope to take on any young kid who likes fiddling with an iPhone, regardless of academic qualifications – and we have quite a few of them these days.
Yes, folks, we are looking at the world of apps, those lovely little icons you can activate by just brushing the lustrous stay-clean screen of your gizmo, so that you can spend the rest of the day in a happy melon-slicing narcosis. London is at the absolute shiny needle-tip of global progress, as I can testify, because I have just been round a new Wayra academy in Fitzrovia.
It is a special hub, an incubator for start-ups, and it is like a throbbing nuclear pile of competitive talent. It is positively Californian in its youth, energy, brightly coloured bean bags and breakout romper rooms with very good coffee. They are coming up with apps that help you unleash your artistic urges; apps for establishing the sexual preferences of everyone in the vicinity; apps for helping blind people cross the road. One team had come up with a way of monitoring the language of the entire output of Twitter and other social networks, so that they could tell where people were generally happy and where they were generally angry (they seemed to be pretty cheesed off in Islington that morning, but cheerful in Chelsea).
As we talked, my mind raced, and I tried to show that I could invent some apps of my own. How about Pol-U-Swerve, so that you can stay in the bath if a canvassing politician rings your bell? Or Fixme, the way of fixing Libor with no incriminating emails? Or YouHack, so that you can tell at a glance which media organisation is invading your privacy? They looked at me pityingly, but I feel sure that we are now seeing such an amazing collision of technology – search engines, voice analysis, geo-location, face and word recognition – that the possibilities seem boundless. One day soon I bet there will be something called Howler, an app that allows your phone to parse every word a politician says – and go BLEEP as soon as he or she is guilty of some inadvertent inaccuracy. And even if it isn’t Howler, it will be another wonder.
This sector is growing so fast that they think the number of new firms in the Shoreditch area alone has trebled, to about 1,800, in the past two years. The industry already employs 48,000 people in London, the most in any city this side of the Atlantic, and one day soon someone is going to come up with the big one, El Gordo, the next Facebook. We have the brains, we have the restaurants, we have the bars, we have the critical mass of talent. All someone needs is the right idea and then… well, they will need someone else to back it.
You remember the decisive scene in The Social Network, the excellent film about Facebook. It is when he goes to the bankers and outlines his scheme. You bet, says the money man. Half a million dollars? says the fellow. No problemo. Be my guest. That is one of the reasons why America has Facebook and Google and Amazon, and that is why – if we are to compete – we need to ensure we have a confident and dynamic banking sector.
It is time for British politicians to say it loud and clear and in unison: we need bankers, my friends! We need bankers who are not just cautious, owlish Polonius figures. We need bankers who are willing to take punts and put their necks on the line. Yes, by all means arrest anyone who has been involved in a criminal conspiracy to fix Libor. Bang ’em up. Slam ’em away. But we need the political establishment in this country to stop slagging off a sector that is utterly crucial to the British economy and the current system of global capitalism – and after four years of navel-gazing since the crash, we have yet to come up with an alternative.
We need to maintain or lengthen London’s lead as the best place to raise and allocate that capital, and we won’t succeed in that objective if we keep on bullying, berating and generally beating up anyone who has anything to do with a bank. It’s no use regulating them to the point where they are too nervous to lend, and it’s no use saying we should get rid of the “casino” investment banking and stick to good old high-street stuff. You need both. You need the high rollers as well as the nice chaps who used to give you sherry.
It is because Britain is so well placed – with the right time zone, language and legal system – to provide financial services that the sector employs hundreds of thousands of people, not all of whom are on stonking bonuses; indeed, most of them are on middling incomes. Collectively they produce tens of billions – about 12 per cent of government revenues – that go on schools, hospitals, welfare and roads. And then there is sponsorship of all kinds. Talk to the people who run London’s museums, orchestras and galleries. Do they think we should be continuing this onslaught on the banks? Of course not.
Someone the other day suggested that it might be embarrassing to have Barclays pay £50 million to help fund cycling in London. Listen, buster, I said, if they give us another £50 million I will change my name to Barclays Johnson. Of course we should be seeking to rebalance the economy, by building up manufacturing, hi-tech, medical sciences and other areas in which the British show protean powers of self-reinvention. Maybe one day the apps business will employ as many people as financial services; but that day is still some way off, and – this is the key point – it will never come unless we have a strong banking sector with imaginative people who are willing to take risks. London needs banks, and it’s time to stop knocking them.
Boris – old chap the Banks have only ever provided working capital, not Investment capital to business. Investment Banking aka as Casino Banking has been what the City is about for more than 2 decades The City no longer adds value if in truth it ever did , it exists only to skim off as much as it can get away with from the real economy. Over paid overly proud and over here. Send them back to the Ferengi home planet. three cheers for the co-op and the Nationwide. Leave the City Mafia to their sad numbers racket, and tax them “appropriately” – 50% of their gross loot at least.
Remove the subsidies to the banks and then let’s see how they perform.
Dear Boris Johnson, I applaud you that you have got the point across of the necessity of liquidity to fuel any kind of prospective new industry sector. However, it is sad as well to see that there is a kind of banker requested which is rare to find: One that does not only channel millions in a prospering and likewise risky sector, no, at best he should be liable to a great extent for his doings. That is a good thing as the person involved in taking a risk will be rewarded if he succeeds – massively. In London, and that is from a very boring german point of view, the type of banker has taken place who is employed in a public noted institution and still is employed. Which is equal of not being involved in taking the risks the institution faces in the markets. With the right kind of insurance any manager is free to take a high risk and not being “killed” by the market if it all goes wrong. The Barclays people have made their lives a bit too easy as we saw it with Goldman Sachs when they influenced public finance to their best interest (e.g. Greece book tuning as done by the London chief of the Goldman Sachs bureau). She did a good job, however, it was not in the public interest. Speaking of public interest: I have visited countries such as Kenya, India and elsewhere where you Brits once “ruled” the place. Looking at the public infrastructure, it is all that they ever had and everything that once was built in public interest (macro economically especially). You can proudly say, that it was not only the “Bridge of the River Kwai” the finest british engineers once build, it was a train net, water infrastructure, energy, etc. – these countries all still live of what british engineers left behind. Nowadays, the industry in Britain is in “Shards” – how funny what you recently build yourself in London for the financial industry. Why is it it that “Retro” and boring to reinvest with “cheap” money (can you lower the interest rates further? Nope!) in your infrastructure again – it’s not all about Olympics, it is as well about a great tube, a modern energy system etc. It is so sad, that your brightest people choose the easy way to earn the Quid and instead of building bridges engineer those “Financial Weapons of Mass Destruction” as Warren Buffett called them. It is a matter of pride for the brits to reinvent themselves, reduce their dependency on taxes and earnings from one sector and I do believe (I’m not mad) that you can be reelected for something which will last longer than your office – Apps is a very small field and the competition does not make it an attractive sector for a nation – it is for high risk takers and the reward is only big in a very few cases. Everyone or say a lot of people can copy a good app. But being innovative is about taking risks and listen to your guts. The guts of your biggest financial institutions are rotten and stink. I know that perfectly well, my Friends at “Deutsche Bank” now approach the german “Mittelstand” again – they lack the funding for equity increases to fulfill Basel III – without some naive, dumb sheep money they will be back at the casino very soon – it is their job to be “that destructive” – call it creative destruction – it is not for the public good and Winston Churchill knew how to write that.
Dear Boris Johnson, I applaud you that you have got the point across of the necessity of liquidity to fuel any kind of prospective new industry sector. However, it is sad as well to see that there is a kind of banker requested which is rare to find: One that does not only channel millions in a prospering and likewise risky sector, no, at best he should be liable to a great extent for his doings. That is a good thing as the person involved in taking a risk will be rewarded if he succeeds – massively. In London, and that is from a very boring german point of view, the type of banker has taken place who is employed in a public noted institution and still is employed. Which is equal of not being involved in taking the risks the institution faces in the markets. With the right kind of insurance any manager is free to take a high risk and not being “killed” by the market if it all goes wrong. The Barclays people have made their lives a bit too easy as we saw it with Goldman Sachs when they influenced public finance to their best interest (e.g. Greece book tuning as done by the London chief of the Goldman Sachs bureau). She did a good job, however, it was not in the public interest. Speaking of public interest: I have visited countries such as Kenya, India and elsewhere where you Brits once “ruled” the place. Looking at the public infrastructure, it is all that they ever had and everything that once was built in public interest (macro economically especially). You can proudly say, that it was not only the “Bridge of the River Kwai” the finest british engineers once build, it was a train net, water infrastructure, energy, etc. – these countries all still live of what british engineers left behind. Nowadays, the industry in Britain is in “Shards” – how funny what you recently build yourself in London for the financial industry. Why is it it that “Retro” and boring to reinvest with “cheap” money (can you lower the interest rates further? Nope!) in your infrastructure again – it’s not all about Olympics, it is as well about a great tube, a modern energy system etc. It is so sad, that your brightest people choose the easy way to earn the Quid and instead of building bridges engineer those “Financial Weapons of Mass Destruction” as Warren Buffett called them. It is a matter of pride for the brits to reinvent themselves, reduce their dependency on taxes and earnings from one sector and I do believe (I’m not mad) that you can be reelected for something which will last longer than your office – Apps is a very small field and the competition does not make it an attractive sector for a nation – it is for high risk takers and the reward is only big in a very few cases. Everyone or say a lot of people can copy a good app. But being innovative is about taking risks and listen to your guts. The guts of your biggest financial institutions are rotten and stink. I know that perfectly well, my Friends at “Deutsche Bank” now approach the german “Mittelstand” again – they lack the funding for equity increases to fulfill Basel III – without some naive, dumb sheep money they will be back at the casino very soon – it is their job to be “that destructive” – call it creative destruction – it is not for the public good and Winston Churchill knew how to write that.
Last but not least: The Brits I know are always up for a good fight – why don’t you take on the real fight? You studied ancient history, did you not? No real hero ever took on the fight without risking everything – it is a good cause and I still believe your children are well fed and taken care of, even if you ally to take a battle on your TOTAL dependency of the banking sector. It is not an industry, they call themselves industry – but they do produce NOTHING. They are just bookkeepers.