Metaphorically speaking, Sir Fred Goodwin was the affable banker who was transformed into the epitome of avarice when boom turned to bust and the lights went out at the Royal Bank of Scotland.
No, the monster enters the picture as dead flesh made life from an assortment of body parts – a misfit whose benevolent intentions are misunderstood by society so he is doomed to a horrible end.
In this allegorical flight of fancy the tripartite authority and chancellor Alistair Darling’s recent Budget fit the picture rather well.
By that I mean that together these disparate parts form a system that, in the case of the tripartite authority, is not working as its creator, the strange Dr Brownkenstein, intended.
And as for the Budget, it adds enormously to the national debt without following the Keynesian solution to its logical conclusion, leaving everyone to wonder what it set out to achieve.
Of course, cynics will point out that both creations share the same DNA and both are too clever by half, but such an analysis would be superficial. The tripartite authority is in need of major surgery while the Budget was supposed to be a remedy, with the patient being the UK economy.
Looking at the lucid approach to regulatory issues Financial Services Authority chairman Lord Adair Turner outlined in his report on the economic crisis, there is at least some hope of appropriate reform on that front.
Indeed, Lord Turner’s subsequent letter to the chancellor explaining the FSA’s position on the supervision of Dunfermline not only provides a coherent exposition of the situation but also gives an insight into the direction that regulation might take, particularly in relation to risk and lending in the building society sector.
His analysis also illustrates how the law of unintended consequences can work. I’m thinking here of how buy-to-let lending is not classified as commercial lending under mutual legislation because societies are effectively lending on residential properties. But as with the Budget, there is a terrible risk that reform could be compromised by the general election that will probably be called on May 7 next year.
Darling’s Budget was a political gamble coloured by the fact that Labour will have to go to the country in just over a year rather than a genuine attempt to turn the financial services industry and economy around. The danger must be that regulatory reform will also be compromised by the fact that this administration is coming to its end.
At least the US had the chance to start with a clean slate with a new administration in January. On the other hand, we have a tarnished regime with little left to lose. The risk of spawning another monster is pretty high.