The Missing Villians

While the country and the blogosphere appears to have set about the crooks and fraudsters currently residing within the House of Commons, there seems to be some sort of trappist silence regarding the people who killed our banks.

Fred and Tom, Andy and Dennis appear to have vanished into thin air with their (unearned) pensions, while Paul Myners, the minister who’s failure to sack these people should have seen… er Paul Myners sacked, is still the City Minister. It seems that the Daily Torygraph’s 3 week assault on the Common’s expense system has let these people exit the public stage, stage right.

Now Private Eye (dated May 29) is reporting that a report into “UK International Financial Services – The Future” written by Win Bisschoff – a former Citibank chairman – which is for Alistair Darling, is set to recommend that no change to the UK financial industry is necessary and that the report “even pretends nothing has really gone wrong – its all just a matter of perception”. The report also recommends that “regulation should not stifle responsible financial innovation”. I have heard buying bad debts from British and American companies (or as the report called it – “collaterised debt obligations”) called many things but “responsible financial innovation”… ummm... nope sorry that’s a new one, even for me.

Meanwhile our banks have been continuing to show their unwillingness to lend money. This is nothing new, mortgages have had £1000 arrangement fees added to them for no apparent reason other than naked greed. These fees have been in place since last year, but nothing has been done despite their obvious role in blocking new homes being bought.

The New Labour MP Tom Harris asked a question about the banks reluctance to lend money to small and medium sized businesses at Prime Ministers questions a couple of weeks ago. The response from Brown was essentially to tell the constituent to try again, there’s nothing to see so move along. Except there is something to see.

One of the key weapons in the recovery is a liquid economy, which is an economy where, according to my partner, people need money in their pocket to buy things, where shops need money to buy more products and to pay wages. Essentially, according to Ange’s theory, money need’s to circulate in the economy to keep the economy running. Our banks have been somewhat negligent in facilitating this process, and the government have been standing back letting this happen. There is no indication that this will change under Cameron.

While Cameron has been taunted as the “Do Nothing” party, New Labour has shown that they are the “All Talk and No Trousers” party. They are unwilling to crack down on our errant financial services, and have stood back while the banks we own suffocate lots of businesses. It’s this scandal which is proving to be the iceberg under the sea.

Four Horsemen Appear before Paralament

The Four Horsemen of the Apocalypse appeared before a parliamentary committee today to apologise for laying wasted to many countries economies and destroying many thousands of jobs.

One of the horsemen, named only "The Shred" said sorry, and that he was only following his orders which was to make as much money as possible, no matter the consequences.

The trial continues...

Or something like that!

In the only opportunity to find out the why and wherewith all of how our two financial institutions nearly collapsed, the former Chairmen and Chief Executive's of Halifax/Bank of Scotland (Dennis Stevenson and Andy Hornby) and The Royal Bank of Scotland (Tom McKillop and Fred Goodwin) appeared in front of the House of Commons Treasury select committee. Essentially, these are some of the people to blame for the current recession.

From what I gather, the edited highlights are thus, they are all really sorry, but did not foresee the credit crunch, until the collapse of Lehman Brothers in September (a year after Northern Rock first fell into trouble in this country). The ABN Amro deal was described as a "bad decision" by Fred Goodwin, which was a bit of a no Sh** Einstein moment. When Barclay's felt that they had lost ABN Amro, they probably thought that if they were not going to get it then RBS would have to really pay to get their hands on ABN. Though I do know people who think that Barclays weren't really interested in ABN Amro, but more interested in the possibility of hurting one of their competitors. If that is the case boy had they succeeded.

I do suspect however that the four bankers did get off lightly, the questions put by the committee were not difficult ones, and the bankers easily evaded giving too much away of what happened. They did point out that they have been punished, as they have lost out when the value's of their shares declined, Goodwin mentioned that he alone has lost £5 million. Sorry, but I'm sure that they can afford it (Andy Hornby is still being paid £60000 a month), there are pension funds, and small scale savers who have comparatively lost out on a larger scale than they ever could. These people should try and say that to the 2300 people who Goodwin and McKillop's former employers are going to make redundant.

The four bankers were allowed to make their false apologies, and then not answer the really controversial questions. I'd like to see how they fare against someone of the callibre of Paxman, who would get the much sought after answers, rather than the preening parlamentarian's.

Unwanted Saviours?

So let me get this right, the SNP are accusing New Labour of trying to force through the merger of Lloyds TSB and HBOS, by any means necessary, even if this includes sullying the good name of the SNP appointed savours of Scottish banking, George Mathewson (right) and Peter Burt (left).
Bearing in mind that.. er … New Labour are bending over backwards to help Gordon Brown’s chum Victor Blank in his quest to take over HBOS, could the SNP not find better candidates to front their rescue of the Bank of Scotland than Mathewson and Burt. These are precisely the kind of bankers who sowed the seeds of the Credit Crunch.
Burt was the Chairman who oversaw (ie; was instrumental in) the “merger” of Halifax and the Bank of Scotland in 2000, a merger which saw Halifax’s lemmings over the cliff top like business plan adopted throughout the group. No good business sense shown there.
Mathewson, on the other hand, appointed and supported Scottish banking’s equivalent to Frankenstein’s monster, Fred ‘the shred’ Goodwin. His support of Goodwin culminated in the decision which has (almost) destroyed another Scottish institution, RBS. That decision can be described in 2 words. ABN Amro.
Ideal candidates to save The Bank of Scotland don’t you think?

The End of Super Squirrel...

About 20 odd years ago, my dad took me into Paisley to open my first bank account, my parents had accounts with the TSB and the Bank of Scotland. In my infinate wisdom, i choose to join the bank which gave nine year olds with a bit of Christmas money the most freebies, so i joined the Bank of Scotland (hence the reference to Super Squirrel, the symbol of the Bank of Scotlands banking for children).

Although my current account is now with another bank, there is a part of me that is sad about the demise of the Bank of Scotland. Their problems did start with the merger with the Halifax. Moving my current account from HBOS was purely down to their Current Account product discriminating against low wage earners. Thats not to say that what has happened to them over the past few days is justified. I feel sorry for the loss that will visit the HBOS employees in the weeks and months to come.

If anything, what we have seen this week, with the collapse of Lehman, and the butchering of HBOS, which appears to have broken every city rule in the book (even Brown has bent the rules by speaking to Victor Blank, the chairman of Lloyds TSB before the takeover), isthe ugly face of capitalism.

Almost as ugly however is the response from our elected representatives. More shutting-of-the-door-after-the horse-has-bolted from Brown & Darling. Some hand wringing from Comedy Dave. Salmonds response takes the biscuit. He described the city traders as "spivs and speculators". Of course the SNP's main priority, which is steadily being revealed to us, is to make Scotland a good place to do business. Obvously not a man who has heard the phrase "Those who live by the sword, die by the sword"