CITY AND SUBURBAN
The Bank of England, the Bank of Cocaine, and the box marked 'No publicity'
CHRISTOPHER FILDES
Shock exclusive: there are more than 500 banks licensed by the Bank of Eng- land, and you can bet that one or more of them is in trouble, and that the Bank knows about it and isn't saying. (Would you be more worried, or less, if the Bank didn't know?) It has all sorts of powers which it can use against shaky banks — so long as it uses them behind closed doors. It can tell banks to remove unfit managers, or restrict the business they can do, or require them to raise extra capital — which was what followed from Price Waterhouse's report on the Bank of Cocaine and Col- ombia. Always it ticks the box marked 'No publicity'. Its concern is to protect the depositors, and if publicity brought a scare and a run, they would be the losers. As against that, prospective depositors need protection, too. The town halls are now trying to pretend that they took the Bank for a credit-rating agency and guarantor. First over swaps, now over BCCI, they want to revoke the rules when they don't like the score in the game. Bad cess to them. I suspect, though, that the Bank can be led astray by its instinct for secrecy. It denies itself a weapon, Public censure is a useful threat and a potent example. Public justice and public confidence go together. I could name a dozen bankers who have been privately told that they have lost their licences — but the Bank will not name them. It would not improve confidence in racing if the Jockey Club stood down Holdhard the jockey and warned off Pill the trainer, but did not tell anyone.
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