revolving doors between banks and government - old boys network - Britain: Culture of cronyism - suspended critical faculties

Source: Scotland on Sunday


Study reveals true extent of 'old boys network' between Government and banks
Published Date: 03 May 2009
By Tom Peterkin, Scottish Political Editor

Links between Government and the banking sector have been condemned in a new report that has uncovered the extent of the "old boys network" at the top of British public life.

Britain has a greater culture of cronyism than Europe or the US, according to the study, which identified key individuals who have moved jobs between politics, financial institutions and the bodies charged with regulating the banking industry.

The report warns the close relations between business and politics "lead to a conflict of interest at best and a suspension of critical faculties at worst".

The study of 116 of the world's most successful companies will be presented to a Global Forum on Public Governance, run by the Organisation for Economic Co-operation and Development (OECD), in Paris this week.

The research looked at so-called "revolving door connections", when a company employs former or current politicians, civil servants or members of regulatory bodies, or where individuals move from the financial sector into politics, Government or regulatory bodies.

Barclays was the most connected British-based company with 14 revolving door connections.

Two of the Barclays examples were Mark Clarke and Sarah Cox. Clarke is director general of finance at the Department for Business, Enterprise and Regulatory Reform, but worked at Barclays from 2000 to 2003. Cox was an international consultant at Barclays from 2001 to 2004 and has since joined the UK Cabinet Office's business support group.

"The Government and the political classes have very close links to the banking industry," said the report's author David Miller, a Professor of Sociology at Strathclyde University, who specialises in researching lobbying.

"I believe this could be one of the factors behind the disaster that has befallen the financial markets. There has not been enough regulation of these connections.

The organisations with more than five revolving door connections were Royal Bank of Scotland, HBOS/Lloyds Group, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Dexia Group, HSBC Holdings, JP Morgan Chase and Co, Standard Chartered Bank and UBS.

Six individuals with RBS connections included Quentin Davies, Labour MP and a minister at the Ministry of Defence, who was an RBS adviser until 2003, and Sir Philip Hampton, RBS's chairman, former chief executive of the Government-owned UK Financial Investments.