“Democracy is the road to Socialism.” -Karl Marx"In what now looks like the final phase of the credit crunch, one thing has become clear: Many of the world's major banks will end up in state control.
Britain is furthest down the track. This week, Royal Bank of Scotland Group Plc and HBOS Plc ceded majority control to the government in exchange for financial support. Already, the state is making demands. It will have the right to seats on the board, to fix dividends, and be allowed to set executive pay.
Other countries are likely to follow. Germany has put its own rescue package in place, and Chancellor Angela Merkel has said the way bankers pay themselves will have to change. Even U.S. Treasury Secretary Henry Paulson has promised the government will take a direct stake in banks such as Citigroup Inc. and Goldman Sachs Group Inc.
In effect, bankers are about to become civil servants. That will require a huge culture change. In a second, banking will have to switch from being a raucous, entrepreneurial and aggressive industry into a dull, safe and conservative one.
For that to happen, their brains will have to be completely rewired. Everything a generation of bankers grew up expecting will be forgotten. A new set of rules is being written.
The initial moves will be cosmetic. Out will go the round- the-clock, work-hard-play-hard culture. In its place will come the nine-to-five day with a break for tea and biscuits. Meetings will be sacrosanct, and the keeping of minutes precise. The gender-awareness officer will no longer be a figure of fun, but rather the most powerful person in the workplace. As for taking clients to lap-dancing clubs, don't even think about it.
It's a new world, get used to it.
-Matthew Lynn (Excerpt: "Bankers Find Their New Calling as Civil Servants," Bloomberg News, 10.15.08. Image: - Deathagony1917,DeviantArt.com,2008).
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