“Please don’t hit me, it hurts”

‘Don’t let’s be beastly to the bankers’ is getting out of hand

The collapse of sovereign Reason in the face of the Almighty Banks continues. As does the process of softening us all up for the eventual reality that they’re going to get away with it in the eurozone.

It was a terrible mistake to ask private holders of Greek government debt to forgo half of their investment, European Central Bank Governing Council member Athanasios Orphanides told the Cypriot Parliament today. It seems hard to believe that he just woke up this morning and decided to say this, especially as the press corps was there in force.

“It was a terrible mistake,” Orphanides, who is also the governor of the Central bank of Cyprus, repeatedly told his national Finance Committee. “By forcing the impairment of any state bond we have triggered concern internationally about all state bonds in the euro zone and that’s one of the key reasons we have a problem. It is because of this tragic mistake in the euro zone that the yields of so many bonds are so high”.

Yes OK, fine Athan – we get the picture now, thanks. So then, was it a mistake to let the Greeks issue so many bonds in the first place? Was it a mistake for the sovereign credit community to encourage them in that regard? Was it a moral hazard for a Goldman Sachs team to then go to Athens and teach the Government how to lie to Brussels, in order borrow even more?

“We must all take personal responsibility,” chant the neocons, like the crowd of morons in Life of Brian. Up to but not including the banks.

Mr Orphanides went on to say that even at 50%, the haircut wouldn’t get Greece back in the game. That’s a little off-message versus what the EU folks told us at the time…but also somewhat academic, given that the hair never actually got cut, as such. Somebody, it seems, is going to be ‘dealing with’ this omission during the summitry week. Don’t hold your breath.

All this on the same day that HSBC was fined £10.4M for selling useless PPI to people in their 80s. 2,500 of them. So – not a tiny minority of staff involved, then. However, here’s a free insider from The Slog: the HSBC Board in the UK set aside £44 million as the sum they expected to get hit for. But hey – let’s take it easy, OK? We don’t want them collapsing on us. Just on the old and infirm: seefingizzlike, they don’t vote and they never moan. And they’ll be dead soon anyway.

The EU’s cotton-wool bank policy in train as we count down to Friday’s Miracle has finally permeated the sawdust in City heads: banking stocks were advancing nicely on the FTSE100 this morning. So this probably convinced EU Banking Authority Chairman Andrea Enria that it was OK to say that her regulators won’t allow lenders to shrink their balance sheets to circumvent tougher European Union capital requirements. And a good thing too….as that would just dry up the remaining trickle of money they lend. Bit late, mind you, given that every bank on the Continent has been doing this for the last ten weeks.

You see, the thing is, Governments look the other way, regulators are slow and naive, customers are watching their HD cinerama footie, and bankers are without shame.

But above all, banks are bullies. Letting them off only helps pay for the next wave of PR bollocks about what a great job they do. David Cameron, George Osborne, Barack Obama, Tim Geithner, Nicolas Sarkozy, Wolfgang Schauble, and yes – even Angela Merkel – are scared witless of the banks. Every last one of them scuttles away the minute one of them says “We’ll leave/we’ll go bust/we won’t take a haircut/hands off our bonuses”.

It is a disgrace, but they will get theirs. Onwards and upwards.