A Christmas wish to banks: keep lying to us

ORDINARILY, the risk management department of a bank is not where you go looking for excitement. A shift in capital adequacy ratios of any more than 0.5 per cent is high-voltage action.

They would have a party. If they thought anyone would come.

Just lately, the RMDs are where it’s at, City wise.

How many Government Covid loans have gone wrong? How many of the other loans made in the same period went right?

Moreover, since the loans are Government-backed anyway, and since politicians don’t like tricky economic news around

Christmas, will there be any force put on the lenders to pretend that bad loans are good?

If you ask a bank about this scenario, it will scoff at the very idea of strict risk compliance laws being politically comprised in this way. They ask: Have you met the guys in risk management?

Two glasses in, the tone might change. Not to “we are screwed” but more to “we don’t know how bad it is and think no one else does either”.

As the year end nears, banks are under some pressure from analysts and investors to tell the truth about these Covid loans, about what’s really going on beneath the bonnet of the UK economy.

Lie to us.

Pretend and extend is a widely discredited economic strategy that I happen to like.

We can’t just keep imagining that everything is OK, say the folk against kicking cans down roads.

I say, keep kicking, keep dissembling. If money were real, we’d be in trouble. If we keep acting like it is not, we might just get through.