First, the purported object of Project Merlin was to achieve a new understanding between banks and government after the 2008 crash, the 2008-9 bailouts, and the 2009-2010 bonus rows. A Magna Carta-like settlement of rights and responsibilities, perhaps. So you’d think there’d be some public undertaking by the banks, promising never to screw up so mightily again: not to drift stupidly into massive dependence on market-based funding, perhaps, or simply, to manage credit risk better; or not to incentivize risk taking via heads-I win-tails-you-lose bonuses; or not to award performance-unrelated bonuses immediately after massive infusions of taxpayer support.
Oddly, none of that is in the Treasury press release; in fact, the only undertaking offered about “not screwing up again” is this:
not repeating in 2011 the one-off bonus tax announced in Budget 2009.
That’s right – the “mea culpa” on offer, implicitly, is by the government, on behalf of the previous government, which had at least tried to do something to stem the conversion of implicit and explicit taxpayer support into bankster loot. The only thing to admire about this bit of cravenness is its acrobatic combination of grovelling and fingerpointing.