'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)