The real lesson of the alleged Kweky Adoboli fraud at UBS isn’t that the Vickers reform requiring ring-fencing between the retail and investment arms of banks should be implemented far quicker than 2019 – though that should certainly be the case. It’s rather that Vickers, after 18 months’ investigation, missed the point. The central problem is not that taxpayers should be protected against any bail-out of wild, speculative and greedy investment traders – though obviously they should be – but rather that such activities within investment banking must be tightly regulated or prohibited outright. Capital is scarce, and the wasteful and reckless dissipation of it in highly risky and speculative betting by investment bankers is something the nation simply cannot afford when capital is desperately needed for job creation and revival of the manufacturing economy. Continue reading →