Strange old world. First, we have our former prime minister proceeding with unseemly haste to the nearest US investment bank to give them the benefit of his wisdom.
Tony Blair’s decision to take the JPMorgan shilling, signing up as a part-time adviser to the bank with a pay cheque likely to be north of $1m, has sparked inevitable debate. Yves Smith at Naked Capitalism thinks it’s “reprehensible” and advocates a two or preferably four year moratorium on private sector roles after leaving office to safeguard against conflicts of interest.
Felix Salmon is more sanguine. Tony’s got a family to keep in the manner to which they’re accustomed and besides, these tie-ups are as much about schmoozing and adding lustre as offering actual advice.
We can’t get too exercised here at FT Alphaville HQ. Post-PM private sector careers, especially in – horror of horrors the City – have generally been avoided by Labour leaders. But then Blair was always true-blue with a ruddy paint job.
But how’s the City going to feel if the government and public sector start to muscle in further onto their terrain?
Robert Peston on Friday reports that in the Northern Rock bond fund-raising scenario, which might involve the flogging off of bonds securitised on the Bank of England’s loans to Northern Rock through a third party issuer, could have an usual name on the term sheet.
The Bank of England.
The suggestion is that the Bank’s name would be on the deal as one of the lead managers, along with Goldman, Citi and Merrill, with the aim of reducing the fees of up to £250m-odd associated with the deal.
Sounds remarkably charitable stuff from the banks – until you think that if Goldman and co can’t come up with a realistic structure to enable a sale, or to facilitate an independent future for the Rock, the most notable thing they’ll take out of the affair will be the reputational hit of having failed to engineer a private sector solution to this sorry tale.
And we thought that the banks were in disgrace. With Blair over at JPM, Goldman back esconced in the Treasury, and the BoE potentially getting in on the Rock’s bond action, the City and Whitehall are suddenly looking like one big, dysfunctional family.