RICHARD Lambert yesterday used his last speech on banking as CBI director-general to launch a scathing attack on the UK’s culture of political bank-bashing.
Lambert, who is due to step down from his position next year, said politicians were “making matters worse” with unrelenting and vicious attacks on the banks, compounding the problem of lack of trust between the sector and the public.
“This back and forth between the politicians and the bankers – what you might call Vince Cable versus Lombard Street – is not constructive,” Lambert said.
“The crisis had many causes. Individual greed and errors of judgment on the part of the bankers were one. But there were much more powerful forces driving the way to catastrophe. They included badly designed policy frameworks, errors of judgment on the part of government, central banks, and regulators, and bad macroeconomic management.”
The CBI director-general said that persisting with laying the blame at the banks’ door would result in the “wrong responses” to the sector’s problems, including the introduction of a much higher banking levy, which he said would place the highest burden on banking customers.
Lambert added that it is “irresponsible” for politicians to caricature investment banks as casinos, warning that “overheated rhetoric” has already deterred at least one foreign player from investing in the UK market.
But he urged bankers to step up to the plate voluntarily to demonstrate sensitivity in the area of compensation, particularly as the public spending cuts start to bite in the New Year.
“If trust has to be built on a sense of fair dealing, then the combination of pay freezes and job losses in the public sector with large bonuses in the City would be toxic in the extreme,” Lambert warned, calling on banks to act collectively on compensation and resist the temptation to “poach disaffected mega-stars”.