A bonus for jobs

No one disputes the need for banks to make profits, not least because those profits contribute considerably to the Treasury tax take, but Mr Diamond’s arrogance exemplified banks’ continued failure to understand just how great their debt to the public is.

For the painful truth is that all British banks owe their continued existence to the largesse of the taxpayer whether they took money from the Exchequer or not. In 2008 a contagion was spreading through the financial system and the guarantees extended by the Government stopped it in its track. The banks must now repay that debt by helping to put Britain firmly back on the road to growth and this means going out of their way to support small businesses and help entrepreneurs to create jobs.

As yet, far too many banks are failing in this simple requirement. This is why it is so gratifying to see Goldman Sachs making efforts in this region to choose those entrepreneurs which it believes have the greatest potential for growth and put them through a course providing hard, practical knowledge of how best to develop their businesses.

With unemployment reaching a 17-year high, and record levels of youth unemployment standing as a testimony to Britain’s struggling education system, Goldman Sachs is setting an example to its fellow banks whose bosses are still being grilled by MPs as to how their huge bonuses can be justified. Indeed, the Government itself – which has yet to demonstrate that it has any convincing strategy for promoting private-sector growth – could learn a thing or two from Goldman’s example.