Risk‐seekers or rent‐seekers?: Wholesale banking extracts value

Are investment bankers valued members of society, or leeches? It all depends on the value they add. In economics, rent seekers are those who compete through manipulating the environment rather than adding value. Rent seekers use methods such as encouraging regulation or government protection to extract wealth (rent) without improving productivity. If it sounds like a term of derision, it is, and is frequently associated with other terms such as lobbying, bribing and corruption. Wholesale banking may be at a cross‐roads. Down one road lies a free‐wheeling, value‐adding industry; down the other a shrinking oligopoly of banks share their takings...