Tuesday 23 June 2009

A Man's A Man For A' That

Long ago, I knew an incorrigible who regarded himself as something of a wit, even although it was not shared by those he exercised it on. Inevitably, he was dismissed as something of an unreliable nuisance and a fool. When introduced to a banker at a function, one of his favourite jokes was to ask them when the banks were going to sell booze to their customers, and then lend them the money to buy it at a decent rate. Another was to ask them why they didn’t make up their own money instead of relying on governments or gold diggers to provide it for them.

Perhaps he was just forward thinking and a man ahead of his time. We have learned in recent years what happens when governments allow banks to invent money as and when they feel like it. Now, his other prediction is close to fulfilment.

The supermarkets are going into banking, seeing a gap in the market. They are in the retail business, and retail banking is there for the taking. The Governor of the Bank of England; with a good many other trying to work out a more secure future for the UK finance industry might think that separating retail from investment banking would be wise. But many of the top men in the Banks and their doormen and clerks in the government are still craving for the big time hoopla of the global money markets using assets from retail banking as leverage, especially if they can keep on fooling ordinary people with fake and expensive credit.

The bankers need to be careful. They should wonder where all the small local retailers have gone from the towns and countryside. They should realise that when it comes to the internet anything goes. The supermarkets are big brands, and have worked very hard to create the illusion of security and customer concern. They are not contaminated, yet, with images of thieves and conmen. They do not have to pursue millions of overdrawn customers who have had bad experiences recently.

The media, which has turned on the bankers in a feeding frenzy, is very kind to the supermarkets, their marketing spend on advertisements is enormous. Programmes critical of the sourcing of some products will be tucked away into the darkest recesses of More 4, and barely hinted at.

Above all, the supermarkets sell booze, are now becoming bankers and will be able to lend at competitive rates. How soon will there be a “Poosie Nancies” brand in your local store, between the delicatessen and the supermarket's in house bank?

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