Is it open season on capitalism? When Jamie Dimon is arguing that capitalism is not the solution to everything, we mortals should pay attention. What an election 2020 is shaping up to be in the US: Donald Trump will be unable to believe his luck as he sets out his stall as the last defender of capitalism. There's even talk that the Bank of England will select a new governor who once praised an anti-capitalist protest. What is the world coming to? Bank of England governor Mark Carney once promised to stick around to help get the Bank through Brexit, but realising that he might be stuck in London for the foreseeable future, Mr Carney is signalling his intention to be gone soon. Reuters takes a look at possible replacements, including Andy Haldane, the chief economist at the Bank of England, who has taken the bank on the road to speak and listen to opinions outside of London. He also took the unusual step of explaining to the public how banking actually works. Andrew Bailey, previously seen as a likely candidate as head of the FCA, has become embroiled in the RBS scandal. "But heading the FCA is fraught with risks. Lawmakers in parliament's Treasury Committee criticised Bailey for not publishing all of a report into alleged misconduct by bank RBS," reports Reuters. "Bailey has cited privacy restrictions." Haldane, of course, mostly comes into focus where Labour is concerned, as he's thought more likely to be palatable to Labour's finance spokesperson John McDonnell. "In 2012, he praised the anti-capitalist Occupy movement for suggesting new ways to fix the shortcomings of global finance. Haldane has experience of both sides of the BoE, having served as executive director for financial stability, overseeing the risks to the economy from the banking system. But he might be seen as too much of a maverick to take the job of governor."
A popular slogan on t-shirts favoured by fintech revolutionaries is 'get shit done', which is a way of expressing how deeply insecure most fintechs feel, at least until they get a banking licence. But according to the FT, the bad boys of Revolut have quietly dropped the 's' and the 'h' from their in-house 'get shit done' slogan, and are now all focused on being compliant. In an interview, chief executive Nikolay Storonsky tries to come across sympathetically, explaining that as the company scaled rapidly, it spent a lot of time (symbolically) putting out fires. ""We were fighting for our survival — there were a lot of fires," Storonsky tells the Financial Times. "We didn't really have enough budget to hire a lot of great people in compliance." It's hard to imagine established banks getting away with this sort of excuse (but of course, they do, and we've written extensively recently about the after-the-fact demand for compliance offices in places such as Denmark.) Although banking is about risk and compliance, this stance has not deterred investors from continuing to pour funds into Revolut. Other concessions now include offering a phone number to customers, which serves as a reminder that all the promotion of AI for customer service is driven by a relentless cost-cutting agenda that is now looking unsustainable.
India's banks are continuing to serve as a drag on the economy, writes Credit Suisse strategist Neelkanth Mishra, who says that state-owned banks control two-thirds of banking assets. "The problem is that state banks continue to have a very large role in the economy," he writes. "As they slow, they drag down the economy, too; private-sector banks simply can't grow fast enough to make up the difference. For a time, non-banking finance companies could help: Shadow banks were responsible for nearly a third of incremental loans in the system over the past three years. But, since September last year, when a funding crunch forced them to focus on survival, credit growth in the system has slowed."
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