The world is stunned wondering what will happen if the proposal of Alistair Darling, HM Finance Minister to 50% tax on the millionaire prizes of the City of London bankers really materializes. The example could spread like wildfire starting with the rest of Europe and the United States, putting the best brains in finance on the run.
As benefits bankers, an indignant and subdued protest rises from the category with which they claim the merits and irreplaceable function of CEOs, presidents and managers who from the 1970s onwards have produced the most brilliant financial innovations that so much well-being and wealth have brought to all humanity.
Innovations that can be compared to inventions such as electricity, the telephone, penicillin: securitizations, CDs, derivatives, ARM mortgages and so on and so forth. Someone pointed out that in reality the last real revolution in the world of credit is represented by the introduction of ATMs and perhaps, in the 1950s, credit cards. But do you want to put the sophisticated utility of a swap or an Asset-Backed Securities?
No, we cannot allow financial engineering laboratories to close their doors, and such a large scientific heritage is to be lost. The accidents, toxic stocks, the credit crunch, the subprime crisis, and the recession are of little importance. They are the right price that we consumers must leave on the altar of progress, together with the billions of dollars or euros needed to rescue failed bankers so that they can continue to do their job.
The art of the banker, said a rampant CEO of an Italian bank a few years ago, is to shear the customer like a sheep without him noticing that, leaving him the little bit of hair that allows regrowth and new shearing the following year.
Published in The Diary of Perestroika