Laugh and lend - the Brown Sugar initiative

16 June 2009

With Gordon Brown enlisting The Apprentice star Sir Alan Sugar to help out the likes of Lord Mandelson in the fields of business and enterprise, there is some speculation as to whether or not Lord Turner and Hector Sants might well follow suit.

They could enlist TV comedians to help out the boards of banks and building societies in the tricky field of mortgage regulation.

The idea is not as improbable as it first sounds. Both Lord Turner and Sants, we are informed by insiders at the Financial Services Authority, are regarded as quite a whacky pair.

That is in no way intended as derogatory – it’s just that they have a great sense of fun and strike colleagues as the Little and Large of the Wharf, though no one has gone so far as to confirm who is who in that duo.

What they do say is that as a pair of comedians they recognise the important role that comedy can play in holding up the mirror of truth to those in office.

A good example of this is the way that Rory Bremner ridicules Tony Blair and Gordon Brown, not by satirising them but through mimicry.

So the thinking is that if lenders enlist the likes of Stephen K Amos, Michael McIntyre, or Jack Dee as non-execs to sit on the boards of say small building societies, they might be able to deter them from competing, if they are so tempted, with the likes of HBOS in the commercial lending sector where the management obviously hasn’t the same skills as the really big hitters such as Peter Cummings.

Let’s face it, if Stephen K Amos tells you that you’re suffering from Big Dick Syndrome, you’re going to back down, even if you do believe you’re OK in the assets department and just know that lending on a five star hotel in down town Dudley is a sure thing.

The FSA is currently anxious about the ability of some building societies to compete in non-tradition markets, hence its new discussion paper (FSA/PN/073/2009) on additional guidance to building societies which it has published several months ahead of a wider discussion paper on regulatory reform which is due in September.

In speculating about what that might contain, pundits have wondered if it would put forward prescriptive proposals regarding, for example maxim loan-to-value or loan-to-income ratios.

But in all likelihood the FSA recognises that the existing regime governing capital and risk will make that unnecessary and in controlling corporate ambition, there’s nothing like a good laugh to bring the board back to reality.

Thus come the review in September, could we see a proposal for comedians to be included as fit and proper persons under the FSA’s approved persons regime?

Perhaps it is more pertinent to ask why not because in the FSA’s Consultation Paper CP08/25 (The Approved Persons Regime – Significant Influence Functions Review, December 2008).

It clearly states: “An approved person performing the role of a non-executive director should provide an independent perspective, and should constructively challenge and help develop proposals on strategy.” In that context surely no one could be more challenging than a comedian.

But defining what constitutes a suitably qualified comedian would probably take an FSA task force anything up to a year and the reality check is the fact that we can laugh all we like at the self belief, follies and egos of those in power but comedy as yet has to bring the house down.

On the other hand board meetings could be a lot more fun.