From both sides, now

Talking as I was of banks, and our regional bank in particular, we're very lucky to have a branch in the next village, which saves us having to drive half-an-hour to Huesca in order to use one. One wonders if it would survive a "rationalisation" programme, though it would probably have more chance than the three-days-a-week bus service between Huesca and our village, which miraculously survives, presumably because it's too obscure for anybody to notice it and have it stopped.

As far as I know the only scandal involving our local branch is the occasional absence of the manager. I say "manager" but there is, in fact, only one person who works there, and until a few months ago, if you arrived at the wrong time in the morning you would find the branch locked and the manager in the village bar.

This was his daily habit until he was recently replaced by another, younger man, who preferred to spend his working hours in the bank. Until, a couple of weeks ago, I arrived to find the door locked and a note on the door claiming that he would be back in five minutes. It takes more than that to drink a cup of coffee.

We transferred quite a large proportion of our money out of our Spanish bank, and into our UK banks, during the recent Bankia scandal, perhaps more to do with fear of the Euro collapsing than of Spanish banks doing the same. Still, this now brings to mind the parable of the man who tried to escape the rainstorm by standing under one tree until it was sodden, then going to stand under another.

If only a little regular skiving was the worst that ever happened. Compared to the carnival of corruption which appears to have been occurring in different banking systems in different countries, it'd be a luxury you'd pay good money to put up with.

Pondering the LIBOR scandal, about which one assumes we will learn a great deal more about than we know already, I recalled this piece written only three weeks ago about the Spanish banking crisis. It's a perfectly good piece, too, but reading it now (three weeks seems such a long time in a permanent crisis) I'm struck by this passage.

The bill that Europe's rescue funds must pay has been increased by the multi–million euro payoffs taken by some senior executives shortly before their banks collapsed and decisions taken by unqualified board members who admit they were incapable of analysing the banks' books. Boards were stuffed with political placements or people who had little idea about banking – including, in one case, a supermarket checkout worker.

They often rubber-stamped decisions. In some cajas they were rewarded with well-paid positions on the boards of subsidiary companies as well as with luxury foreign trips and soft loans.

Trips to India, China or Chicago and the hundreds of millions of euros in loans to executives, board members and their families formed part of the gravy train of political favouritism and cronyism.

Chairmen were often unqualified politicians, with academic investigators finding a close relationship between the size of a bank's bad loan book and the inexperience, lack of qualifications and degree of politicisation of the chairman.

All of which is true. But is any of it - including either the damage done both to the banks' finences, or that done to proper accounting standards - any worse than what has happened in more Anglo-Saxon banking systems? Has the absence of knowledge, in the case of "unqualified board members", been any worse than the use that has been made of knowledge, by people who possessed it?

So perhaps the problem is not "political meddling", but the wrong kind of "political meddling". Perhaps it is less that politics has meddled with banks, than the influence banks have had over politics.

I mean why were inexperienced nonentities in positions of influence in Spanish banks? Was it really against their will? What effect did it have? To prevent banks being run in the way they should have been? Or to allow them to be run precisely the way the banks wanted it?