By Mary Jordan and Kevin Sullivan
Washington Post Foreign Service
Monday, September 29, 2008
LONDON -- Ilchester Place screams wealth, from the towering brick townhouses to the Rolls-Royce and Bentley parked next to lovely stone curbs.
But it also whispers financial disaster, with the discreet little "For Sale" sign in the window of No. 8 and the unclipped hedges outside.
That three-story, six-bedroom house, on the market for $18 million in a bank repossession sale, has emerged as a symbol of how the global financial crisis is hitting Britain, and of what many see as its cause: the raw, unchecked greed of financial barons.
"The working man like me is paying for it," said Jason Moy, 37, who sells flowers around the corner on Kensington High Street. "I can't get a mortgage; I'm really quite annoyed."
The Ilchester Place house was recently repossessed by Barclays Bank from Robert Bonnier, a flamboyant London financier. Once fined more than $500,000 by regulators for improperly manipulating the stock market and now sought by creditors who say he owes millions, Bonnier has become an unwitting example in a national debate about the point at which success becomes greed.
While U.S. political leaders review a bailout package to try to save the American Dream, Britain has been spared pain of that intensity. Still, growth is down, interest rates and unemployment are rising, and houses are being repossessed at rates not seen since a recession in the early 1990s. This month a huge mortgage lender had to be rescued.
So from the pulpit to the pub, from housing developments to the Houses of Parliament, people here are arguing about how much to rein in traders in one of the world's leading financial centers. They are weighing the need for a robust free market with the desire to keep the excesses of daredevil traders from costing working-class people their homes and futures.
Prime Minister Gordon Brown has announced a temporary ban on short selling, or betting that a stock's price will fall. He also plans to send Parliament a bill calling for as-yet-unspecified measures to tighten regulation of financial markets within two weeks.
A decade ago, Peter Mandelson, a top official in the government of then-Prime Minister Tony Blair, famously quipped: "We are intensely relaxed about people getting filthy rich."
It was a sign of prosperous times.
Last week, the two most senior leaders of the Church of England weighed in with stinging critiques of a financial culture they said had enriched a minority at the expense of society.
In a speech to a bankers group Wednesday, John Sentamu, the archbishop of York, said: "We find ourselves in a market system which seems to have taken its rules of trade from 'Alice in Wonderland.' " He referred to traders who profit from the losses of others as "bank robbers and asset strippers."
The archbishop of Canterbury, Rowan Williams, writing in the Spectator magazine, said that while making a profit is a legitimate goal, abuses of the financial system can cause "real and crippling damage" to people and institutions. He wrote that "almost unimaginable wealth has been generated by equally unimaginable levels of fiction, paper transactions with no concrete outcome beyond profit for traders."
Williams invoked Karl Marx, saying that when Marx noted that "unbridled capitalism" ascribed a "reality, power and agency to things that had no life in themselves; he was right about that, if about little else."
Not everyone is ready to take a hard line against getting rich. John Barrass, a spokesman for the Association of Private Client Investment Managers and Stockbrokers, disagreed with calls for extensive new regulation of the markets. Barrass said that members of his organization want those who break the law to be punished but that they "dread the wrong kind of regulatory reaction."
"If it bites the wrong firms, if regulation doesn't deal with the issues, if regulation isn't targeted, it could hurt rather than help," he said.
On the streets near Bonnier's mansion, several of those interviewed said they didn't mind people making millions building houses, playing sports, making movies or selling cars -- as long as they paid taxes.
"People should be encouraged to make money. It helps everyone. To stifle capitalism is a mistake," said Jason Ashley, 41, a lawyer walking past the Ilchester Place house. "It's natural to turn on bankers and everyone else who made money in the prosperous years. But it's unfair."
Muhammad Raza, 28, works in a neighborhood dry cleaner where he said Bonnier used to arrive in a Porsche. He said the only people who can afford to live in the neighborhood are bankers and financiers, and the stories of their $12,000 bottles of champagne and $200,000 parties are legendary.
"This is just not reality. Of course there's something wrong with it," Raza said.
London's fabulously rich have rarely been among those with their houses repossessed, and there was no shortage of glee over Bonnier losing his mansion.
"It's wrong. I'm angry. They took advantage of people," said Steven Bilay, 23, an artist walking near Bonnier's home. "I think it's fair to go inside their house and take every single thing out, even their jewelry. I feel a revolution coming, and I want to be part of it."
According to accounts in British media, Bonnier is a Dutch-born businessman who moved to London in 1992 and made and lost massive sums of money in various ventures.
In December 2004, Britain's Financial Services Authority fined Bonnier 290,000 pounds for issuing misleading and inaccurate public statements over a corporate takeover attempt. Bonnier's actions "created a false or misleading impression amounting to market abuse," the FSA said.
Media reports here said Bonnier has run up more than $60 million in new debt, related to business deals since the FSA fine. He bought the Ilchester Place house last year for about $23 million. It's now on the market for $18 million.
Giovanni Andia, 23, a student who lives on the street, said: "It's hard to feel sorry for the guy. That's what a gambler gets."
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