FORMER CONSERVATIVE Party cabinet minister Michael Portillo has told a conference in Killarney that there should be a return to “virtuous banking”.
Mr Portillo, a former secretary of defence and adviser to Margaret Thatcher, yesterday delivered the keynote address to the international local government convention, which has been meeting in the Brehon Hotel.
Mr Portillo said there was a feeling of great unfairness, because recklessness had been rewarded and virtue penalised.
There had to be a return to a world where “virtuous banking” was rewarded, but he had heard no politician say that yet.
Banking had to return to what it had been 20 years previously, where thrift was rewarded and people took responsibility. The key point here he added was to “separate High Street banking from investment banking”.
These two very different sides of banking had become linked without anyone noticing and the rewards were “for high risk-taking with our money”.
Shame had been absent in the past decade or two. While he did not agree with the witch-hunt of individuals, such as former Royal Bank of Scotland chief Fred Goodwin, it was reintroducing a sense of shame and stigma.
A climate of what was expected and what was not expected had to return, he said.
It also had to include a culture of philanthropy, such as existed in the US.
The big difference between Britain and Ireland in the current situation was that Ireland was a member of the euro zone, Mr Portillo said.
He said he was “astonished” that there had not been “enormous protest” at British prime minister Gordon Browne’s devaluation of sterling.