Editor’s blog: Peston’s New World Order

His Lloyds TSB/HBOS scoop gives him the double after getting the Northern Rock story first last year. Robert, an ex-MT columnist, has friends in very high places and is regarded as a safe pair of hands into which to let slip unpalatable news.

Today his blog welcomes in a New World Order. It’s a world, he writes, where the ploddingly dull will rule: ‘The credit crunch is creating a new world order in banking and finance… conservative institutions, and those with simpler business models and a history of careful management of their funding sources, are the new superpowers… it’s a world in which even Morgan and Goldman may well have to surrender their proud independence.’

It’s also potentially a world where, as Polonius from Hamlet would have it, the best thing is ‘neither a borrower, nor a lender (to) be.’ We’re entering a new world of fiscal realism. We’re all acknowledging that we’ve been collectively very unwise and are now going to don a hairshirt. A world where the likes of Andy Hornby (CEO of HBOS) won’t even be allowed to work behind the til in a branch of Halifax because he’s a only a profligate ‘retailer’ at heart, a marketeer (jeers), he’s too young and he’s only got a degree in English, rather than some accountancy exams, which means he likes to say ‘yes’ too readily.

This is all very well. It might be unavoidable. But anyone who kids themselves that life is going to be just fine working to these new, tough rules is kidding themselves. Bad decisions will be made of the negative sort.The whole capitalist model is based on risk, chancing something that may or may not work, and persuading someone to back you on that chance of it working. This new world order will be one where the bank likes to say no. Let’s hope it’s not a new world order where after10 year’s hard saving you put your cash down for a new car, and then two years later, after your dutiful wait, it turns up and it’s a Trabant. And it’s only available in black. Or grey.