Banking on a dose of reality

We know we live in strange times when the nation’s top banker bemoans the number of the brightest and the best choosing banking as a career.

That, however, was exactly the message from Bank of England governor Mervyn King to a committee of MPs last week. King said it was ‘unattractive’ that so many of the UK’s best graduates see the City of London as their number one career choice, sapping talent from other areas where they might achieve more even if they earn less money.

The governor made his point as part of a wider attack on a culture of excessive reward and reckless risk-taking that has swept through the financial sectors of the UK and the rest of the world. Many believe that culture is at least partly responsible for the current woes of the financial system.

Images of stable doors and bolted horses may spring to mind. However, we should welcome the conversion of the UK’s top banker to a view The Engineer and many others have held for some time.

As the governor recognised, there is no doubt that the pots of gold on offer in the City have persuaded many people to forego careers in engineering, science and other key sectors where they would have been valuable assets.

This is not, as is sometimes supposed, because engineering is a poorly paid career. It offers salaries that are more than competitive with other sectors of employment. The trouble is, to compete with the pay and bonuses on offer in the City over the last few years you would probably have to become a Premier League footballer.

Faced with the promise of riches beyond their wildest dreams, you can hardly blame people starting out on their careers for chasing the money.

As King highlighted, however, this does not come without consequences. For the last decade, the inhabitants of the Square Mile have basked in their image of the nation’s wealth creators, taking huge risks for even bigger rewards. Now people are asking, whose money were they risking?

King may well be asking himself this question. Which is the more admirable — the innovative small-to-medium sized business that is manufacturing and exporting products, providing employment and supporting the local and national economy? Or the crash-and-burn merchants of the money markets, taking risks with other people’s cash, employing nobody and to whom innovation means the ability to offload worthless financial products to the next sucker in line?

King’s remarks are yet another welcome sign of a redressing of the balance, a return to a recognition that there is more to the UK than the financial sector and that we ignore the interests of the real innovation economy at our peril.

Andrew Lee, editor