Careless Talk Costs Livelihoods
By Graham Davies

A big thank you to John Varley, Group Chief Executive of Barclays, for providing us all with a very valuable insight in an interview yesterday. Not about the credit crunch, about which he’s completely unqualified to comment. (Something he never mentioned 12 months ago because he was busy at the time heading up an international banking business). No, thanks are due to Varley for showing us all that there are times when people in influential positions would be well-advised to keep their gobs firmly shut, and put their egos to one side in the interests of the greater good.

Varley loftily advised an interviewer from the Daily Telegraph that “in our view” house prices would drop a further 15% and bottom out at the end of 2009. Well thanks for that. Thanks for exacerbating the problem you’re commenting on. He’s (perceived to be) a very influential individual. If he states, in a Sky-televised high-profile interview, that the bottom of the market won’t come ‘til 2009 – well, who’s going to buy a house tomorrow?

If John had an ounce of insight into what’s needed right now, he’d have said (something like), “The banking sector has been bailed out by the government, and we’re very grateful to the government for that support. Because of that support, we’ll be able to get the whole mortgage and credit system moving again, to help our customers. By working together we’ll be able to turn things round, sooner than many of us think”.

A bit of backs-to-the-wall, Churchillian, true-Brit, blitz-spirit, “we’re all in this together and we’re going to get through it”: that would have been helpful. Why didn’t he say it? Well, probably because having failed to give any warning about any coming problem at any point in the 12 months preceding the start of the crash, or even when it commenced, he’s now decided to take some precautionary steps to re-assert his own wisdom, and the wisdom of his institution. His prediction is entirely self-interested. In 12 months’ time, if things have gone as he suggests, he’ll be a great financial sage, much to be respected. If things have perked up, no one will notice or particularly care.

What is breath-taking is the sheer arrogance of the man. He sat there and said that the banks’ lending policies had been “madness”, like it was nothing to do with him. And he also said that banks should “take their share of responsibility” for the problem. Since – moving forward - “taking a share of responsibility” involves nurturing consumer confidence, listening to what people say, and understanding how careless talk costs livelihoods these days … well, lesson one for that elevated individual who is John Varley is to think very carefully before you open your mouth. At all.