The failure of Icelandic banks shone a light on council’s investment policies as some local authorities lost money. Council spokespersons often responded; ‘we paid for this prestigious firm to advise us and they said.’ This is a key benefit of hiring expensive investment firms to provide advice. Decisions made after consulting prestigious financial firms are seen as more defensible if things go wrong.  Big recognisable brands reassure customers. It is said that; ‘No one ever got fired for buying IBM.’

I make no judgement about the advisability of purchasing IBM. The company’s name is used merely for illustration; it could easily be Hewlett Packard or Apple, Barclays, or RBS, or any other big company with a recognised brand. The point is that when advised to make a big important decision such as investing the council’s reserves or pension fund assets it is helpful to have big brand support. If you then discover you invested in Icelandic banks, and this was not wise, council public relations can say we hired the experts. Blame is shared. No one individual need be fired.