Zak Mir on the Hypocritical Oath?

3 mins. to read

Being something of an expert in the English language, at least my own version of the world’s foremost method of communication, I can say that I keep on top of the latest twists and turns of the latest idiomatic quirks. In particular, the grey area between a phrase being able to create an impact, and then just as quickly becoming a cliché.  

There are two phrases which could be applied to the latest ResPublica “think tank” idea of bankers swearing an oath of good service. The first is  “you could not make it up” and the second, “they have got nothing.” What they are suggesting is the equivalent of the Hippocratic Oath for bankers.

I would suggest it could never be more than a Hypocritical Oath. The nature of the business and the motivations for anyone taking part in the game mean that bankers can never have the morality of doctors and it would be foolishly naïve even to make such a suggestion whether you belong to a think tank or a comedy club.

Clearly, asking a banker not to be bad is like asking a scorpion not to sting. But, it is perhaps sad that after all the regulation, indeed over-regulation of the post financial crisis, the “oath” idea really is an admission that regulators are always going to be one step behind, and hence always going to fail.

Caveat Emptor was the great ancient Roman “buyer beware”, and it remains the essential pillar of what all business dealings should be underpinned by. There is the added bonus that this phrase does not cost millions in the salaries of under / non achieving pen pushers. They are those who both leave the regulatory stable door open just when we are relying on them most, and then close it after the Black Horse has bolted.

It was ironic that this week the Bank of England scolded not the former FSA or took the blame itself. Instead, it has blamed Lloyds Banking (LLOY) for taking action to save itself in the aftermath of the financial crisis. Given the way that the shotgun marriage between Lloyds and HBOS was essentially forced upon it, and a collapse of the merged entity had to be avoided at all costs to preserve the reputation of the City of London, it could very well be argued that a little Libor rate “adjustment” here and there may have been a price worth paying.

This is especially the case, as most of the general public simply do not understand or care about such matters. Also, if anyone would like to send their definition of the difference between making a market and fiddling one, I would be interested to know. I asked a former LIFFE floor trader and the answer was not as obvious as one might think….


All of this leads smoothly onto the current charting position of Lloyds Banking, where it can be seen on the daily timeframe that a gap from August last year is still the dominant feature. This is because it has yet to be filled, even after a couple of clear attempts. The closest the shares got to a fill was the 70.01p April low, after which there have been significantly higher lows for the stock.

Chartists will note how in such a highly liquid market for the shares to leave a 1p plus gap after so long does suggest the bulls are very much in charge. The only negative scenario here is that the gap to the upside from last year would be effectively cancelled out by a gap to the downside, triggered by a fresh Government stake sale or really serious scandal.

But in the absence of such “black swans” the technicals appear set fair. The overall pattern here is of progress within a one year rising trend channel based at the 20 day moving average at 74p, with the message being that while there is no weekly close back below this notional double support zone one would expect to see a top of post May range target of 80p plus as soon as the end of August.


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