Mission accomplished
THE right time to send out a lifeboat is before the ship has gone down, and when the wreck may bring others down — when it is a risk to the whole system of naviga- tion. Barlow Clowes's failure is no threat to its fellow fund managers (more of a promise, in fact.) Johnson Matthey Bank- ers' failure was perceived as an imminent threat to its fellow banks in the bullion market — one of them belonging to the Midland, whose own credit at the time was seriously crockered. In the secondary banking crisis, you may remember, even the National Westminster had to assert that it was not bust. No one can be certain that it was right to send out a lifeboat to JMB, since no one can say what would have followed if it had been left to sink, but two things are now beyond argument. The first is that the lifeboat put to sea in an unprecedented storm of abuse. The Bank of England was accused of squandering fortunes, and the individual lifeboatmen of peculation, while the Governor found him- self labelled a hopeless deadbeat and told that his job was on the line, and senior politicians passed on damaging stories which derived from self-interested sources. The second is that the rescue has now been completed, and that neither the Bank nor the City banks which it involved are a penny the worse for it. They sold JMB's bullion business (it was healthy, in spite of what the politicians had to say), they chased debtors, and their salvage opera- tion shows a profit, now that they have settled for £25 million from JMB's au- ditors. That must send a shiver through some of Barlow Clowes's advisers, and the Bank might offer to tell the receiver its methods — just by way of a contribution to Lifeboat Week.
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