Occupy London have announced that an event will take place at the Friends Meeting House, Euston Road at the end of October featuring Andy Haldene of the Bank of England as well as radical economists and journalists. More details to follow.

Here are some things others have said about Haldane.

Haldane ‘defends the public and the social against the sectional interests of finance.’ [2]

The Financial Times‘ Chief Economics Commentator Martin Wolf wrote approvingly; ‘The conclusion to be drawn from Haldane’s work is that an out-of-control financial sector is eating out the modern market economy from inside, just as the larva of the spider wasp eats out the host in which it has been laid.’ [1]

Here are some things Haldane himself has written.

‘If banks seek to maximise shareholder value, they will seek bigger and riskier bets. Joint stock banking with limited liability puts ownership in the hands of a volatility junkie.’ [3]

‘The banking industry is… a pollutant. Systemic risk is a noxious by-product. [It] risks endangering innocent bystanders within the wider economy… measures of the costs of crisis, or the implicit subsidy from the state, suggest banking pollution is a real and large social problem… those entities perceived to be “too big to fail” appear to account for the lion’s share of this risk pollution.’ [4]

Citing estimates of state subsidy, Haldane suggests that ‘the too-big-to-fail problem results in a real and on-going cost to the taxpayer and a real and on-going windfall for the banks.’ [5]

‘For UK banks, under either [of the most popular measures], the implicit subsidy amounts to at least tens of billions of pounds per year, often stretching to three figures… These numbers are eye-popping. To give some context, they are a large chunk, and sometimes exceed, the measured valued-added of the financial sector to annual GDP.’ [6]

Haldane has described some of the strategies employed by banks in the run-up to the crisis as ‘the latest incarnation of efforts by the banking system to boost shareholder returns and, whether by design or accident, game the state.’  [7]

‘There is evidence of an up-only escalator of state support to banks dating back over the past century.’ [8]  And ‘evidence paints a consistent picture: a progressive rise in banking risk and an accompanying widening and deepening of the state safety net. There is a ratchet.’ [9]

‘Financial arms races are scarcely a new phenomenon [but] the liberalisation of financial services over the past 30 years, and the accompanying increase in financial scale, has probably increased arms-race pressures.’ [10]

The ‘twenty year period, from 1986 to 2006, transformed [the] picture… Banking became the goose laying the golden eggs. There is no period in recent UK financial history which bears comparison.’ [11]

‘The increase in pre-crisis bank CEO salaries can be fully explained, arithmetically, by high and rising returns on bank equity’; ‘The pre-crisis rise in returns on bank equity can be explained almost fully by higher bank leverage… It was a classic financial arms race, a case not so much of “keeping up with the Jones’s” as “keeping up with the Goldmans”.’ [12]

‘While bank performance has fallen off a cliff, executive pay remains close to pre-crisis Himalayan heights [suggesting that] risk and reward may [be] out of kilter in the financial sector.’ [13]

‘Deep-rooted incentive problems in banking need to be tackled at source.’ [14]  Among other remedies, Haldane moots ‘Reconsidering the industrial organisation of banking.’ [15]

‘For at least the past century… the state often [has needed] to dig deep to keep crisis-prone banks afloat… Reversing direction… is likely to require a financial sector reform effort every bit as radical as followed the Great Depression.’ [16]

‘It is possible that no amount of capital or liquidity may ever be quite enough. Profit incentives may place risk one step beyond regulation. That means banking reform may need to look beyond regulation to the underlying structure of finance.’ [17]

In banks under the plc model, ‘ownership and control are vested in a small minority of the liability-holders… an equity dictatorship.’ In mutually-owned co-operative banks, ‘ownership and control are vested in a much wider set of liability-holders… a liability democracy. …The advantage is that governance and control would then be distributed across the whole balance sheet. Some of the rent-seeking incentives of the equity-dictatorship model would be curbed.’ [18]


1.    CRESC, Haldane’s Gambit (pdf), Aug 2011, p. 3

2.    Martin Wolf,  Comment on Control Rights, (Word doc), Oct 2011, p. 1

3.    Andy Haldane, Control rights (and wrongs) (pdf), October 2011, p. 6

4.    Andy Haldane, The $100 billion question (pdf), March 2010, pp. 1-6

5.    Haldane, The $100 billion question, p. 5

6.    Haldane, Control Rights, p. 11

7.    Andy Haldane and Piergiorgio Alessandri, Banking on the state (pdf), Sept 2009, p. 7

8.    Haldane, The $100 billion question, p. 5

9.    Haldane and Alessandri, Banking on the state, p. 4

10.  Andy Haldane, Financial arms races (pdf), Apr 2012, p. 4

11.  Andy Haldane, Small lessons from a big crisis (pdf), May 2009, pp. 1-2

12.  Haldane, Financial arms races, p. 5

13.  Haldane, Financial arms races, p. 11

14.  Haldane, Control rights, p. 2

15.  Haldane and Alessandri, Banking on the state, p. 9

16.  Haldane and Alessandri, Banking on the state, p. 11

17.  Haldane, The $100 billion question, p. 20

18.  Haldane, Control rights, p. 16



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