Levene calls for a stop to ‘self-imposed flagellation’
LONDON (Bloomberg) UK banks, insurers and professional services should stop “self-imposed flagellation” and spur the country back to growth, according to Peter Levene, chairman of the Lloyd’s of London insurance market.
“The British economy needs to be on a quest for growth,” Levene, 69, said at Lloyd’s annual dinner in London yesterday. “That search should begin here, in this square mile of banks, insurers, accountants and all the manifold businesses, which together make up the financial services industry.”
The UK economy has stagnated after rebounding from the worst recession in a generation, expanding 0.2 percent in the second quarter as consumer and business confidence dropped amid the European debt crisis and inflation. Even though the banks nearly collapsed in 2008, causing the rout, the financial-services industry is still the best hope of returning the country to growth, Levene said.
Bailing out lenders including Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc prompted the government to impose a tax on bank profits and lawmakers are currently investigating ways of raising capital reserves and implementing firebreaks around banks’ consumer divisions.
“We happen in this country to be world leaders in the finance sector, so let us now get it right, return to respectability and stop bashing ourselves on the head,” said Levene, who was speaking at his last Lloyd’s annual dinner before he steps down as chairman next month. “This self-imposed flagellation just has to stop.”
Banking, insurance and professional services are primed to become the focal point of the recovery, Levene said, citing data from the Office for National Statistics that showed output from the industry grew by £20 billion ($32.2 billion) in the last five years.