Business leader Rob Campbell says bubble banker class can't last'

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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.

Rob Campbell

"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."