Banking basics
THE admission by Sir Philip Hampton, chairman of the taxpayer-backed Royal Bank of Scotland, that too many of those working in the industry are overpaid will do nothing to assuage the public unease about banks in general, not least because it comes at the same time as Barclays are fined a record £7.7m for failures in investment advice offered to 12,000 customers.
It is both too easy and too simplistic to make an Aunt Sally of the banks; there were sound reasons for the bail-out made by the last government, and it is certain that many hard-working and thrifty people would have been plunged into severe financial hardship if they had been allowed to fail. Taxpayers continue to pay a price for saving the banks, and in their turn, the banks must pay a price too, its coinage being responsibility.
That debt of responsibility means sensible pay, the avoidance of excessive bonuses and sound practices when investment products are sold to customers. It is simply not good enough that an institution as large as Barclays gives sub-standard advice. Nor is it good enough for mediocre bankers to be overpaid.