Glass-Steagall bank separation has another British backer: Peter Hambro, scion of the old British merchant bank Hambros, who misses the good old days when merchant bankers "put their balls on the block," and used their own money, not the taxpayers'.
In an interview with the Evening Standard, he said that while retail banks should rightly lend to the real economy, and therefore should operate with a government-backed guarantee of deposits, merchant bankers should live off their wits and operate only with unlimited liability, so that if they lose money, they are fully liable.
"It's this unlimited liability that made merchant—or investment—bankers more circumspect in the past because they put their balls on the block," he said. "But most of today's financial problems are because the investment bankers, using the balance sheets of the retail banks, don't share in the pain. They don't lose anything—and their culture has infected retail banking. They should never have been together and now they should be split, completely."
According to the Evening Standard, Hambro feels that the Vickers Commission on banking reforms, for so-called ring-fencing the banks, does not go far enough, and that Glass-Steagall-type measures might be necessary.
Since Hambros no longer exists as an independent investment-merchant bank, Peter Hambro is now in the gold mining business, and is the chairman of Petropavlovsk, the second-largest private gold-mining company in Russia.