Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

'Bubble' banker class can't last: Rob Campbell tells Infinz

'Bubble' banker class can't last: Rob Campbell tells Infinz

By Pattrick Smellie

Sept. 24 (BusinessDesk) - Professional director Rob Campbell says the only 'bubble' economy the world has to worry about is the "sealed bubble in which most finance professionals work", buoyed up by "their hangers on and mutual admiration society colleagues in the other professions and upper echelons of corporate and state management."

The former trade unionist, who chairs NZX-listed Summerset Group, Tourism Holdings and Precinct Holdings, as well as P2P lender Harmoney, and who sits on the numerous boards of NZX-listed, private and non-profit entities, described the financial sector elite as "a cost or gatekeeping burden" for people taking commercial risks to build productive businesses.

"There is an increasing disconnect between the way in which these groups are remunerated and incentivised and the experience of people working and/or owning in other activities, be they retail, farming, transport, caring, education or elsewhere," Campbell told finance professionals at an Institute of Financial Professionals NZ (Infinz) event in Auckland. "As a group this finance and related professional class live in a bubble which may not be hermetically sealed but is certainly separate and distant.

"I have not joined the Occupy Wall Street movement," said Campbell. "But the escalation of finance as a component of measured economic activity and the associated escalation in finance sector remuneration in recent decades is remarkable. Even the events in 2008/09 which seemed likely to disrupt this process for a moment now look like simply a road bump on the highway to finance sector pre-eminence."

The letters GFC might eventually stand "not for 'global financial crisis” but rather "great finance con job as the bankers and their associated professionals, politicians and senior executives sail on in fancy yachts while many others founder in overloaded dinghies," said Campbell.

In the process of financial markets shifting from "acting as services or facilitators of economic activity in other markets to a role as principals in taking risks and making profits," there had been "a tendency for principles to be abandoned as the role of principals is adopted".

Campbell said that while such bubbles could last a long time, "eventually they are popped".

"Distancing reward from risk, and elevating remuneration and incentives beyond real value into entitlements, has created this bubble. A robust and sustainable economy will have to find its way out of this."

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Commerce Commission: Latest Broadband Report Confirms Improved Performance Of Premium Fibre Plans

The latest report from the Commerce Commission’s Measuring Broadband New Zealand programme shows that the performance of Fibre Max plans has improved substantially. This follows a collaboration between the Commission, its independent testing partner, ... More>>

Air New Zealand: Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery. 'We’ve seen some clearing of COVID-19 clouds recently, with ... More>>

Commerce Commission: Cartel Conduct Now Punishable By Up To 7 Years’ Jail Time

Cartel conduct can now be punished with a term of imprisonment of up to 7 years, after the Commerce (Criminalisation of Cartels) Amendment Act 2019 came into effect today. Cartel conduct includes price fixing, market allocation and bid rigging (see ... More>>

Stats NZ: Auckland Population May Hit 2 Million In Early 2030s

Auckland’s population may rise from about 1.7 million currently to 2 million by early next decade, Stats NZ said today. “Auckland will likely have the highest average annual growth of New Zealand’s 16 regions over the next 30 years, from ... More>>


Stats NZ: March Card Spending Rebounds Despite COVID

There was a lift in retail card spending in March following a fall in the lockdown-disrupted February month, Stats NZ said today. Seasonally adjusted retail card spending rose by $53 million (0.9 percent), compared with February 2021. Visit our website to read ... More>>

PwC: Outcome Of Review Into Air New Zealand Gas Turbines Business

Air New Zealand has received the report into its Gas Turbines business from independent external advisers PwC. Air New Zealand Chairman Dame Therese Walsh says the report identified a range of effective controls in the Gas Turbines revenue contracting ... More>>

LPG Association: Renewable LPG Achieves Emissions Budgets With No Need To Ban New LPG Connections

Renewable LPG can supply New Zealand’s LPG needs and achieve the emissions reductions proposed by the Climate Commission without the need to ban new connections, a new study shows. The investigation, by leading consultancy Worley, was prepared for the ... More>>