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Banks must become “public utilities” say academics

The problems of the banking sector will not be solved by firing a few top bankers, researchers at the University of Manchester say.

The University of Manchester and Open University researchers, based at the ESRC Centre for Research on Socio-Cultural Change (CRESC), argue that while it is necessary to prosecute white collar criminals, conduct inquiries and fire bankers, these measures will not solve the problem.

CRESC researchers claim that economic benefits of the City for the ‘real’ economy are an illusion, and have been perpetuated by effective PR over the years; made possible because the City has enjoyed unique privileges in the government of finance and access to top policy makers.

They have suggested that an inquiry would need to be on a Leveson-style scale, with power to uncover the cultures and institutions that persuaded City operators they could operate with impunity.

The group also say a fundamental redefinition of the social and economic roles of finance must take place, where Banks must become public utilities with the duty to serve the wider economy.

Professor John Law, from The Open University, said: “Talking about good and bad culture is simplistic and will limit any inquiry because cultures and structures go together, and we need to address the culture of finance via structural and organisational reforms which get to the heart of banking business models”.

Professor Mick Moran, from The University of Manchester, said: “Any inquiry needs to have a combination of judicial powers, a broad remit, freedom from government influence and a panel of investigators drawn from a wide range of interests in British society rather than the narrow interests of financial services”.

Professor Karel Williams, from The University of Manchester, added: “We need to set the finance sector’s contribution to the UK economy in context.

“During the six years before the financial crisis, manufacturing contributed more than double the tax receipts and employed 1.5 million more.”

This was posted in Bdaily's Members' News section by Tom Keighley .