Latest Bank Snouts In The Trough

[Foxbat]

Well, I must admit I'm kind of flabbergasted by the latest revelation concerning Barclays (and most likely other banks). Just when the banks thought their reputations couldn't get any lower, this happens
http://www.bbc.co.uk/news/business-18614739

Personally, I'm beyond angry. I'm utterly speechless. The Barclays chairman says he will not take his bonus this year...... Well, get out the flags, whoopeedoo! Let's all celebrate the putting right of the world by this generous and ever so meaningful gesture.

Everything's just fine and dandy because he won't take his extra money. Somehow, I don't think so.

Personally, the most worrying thing I've come across about this whole mess is a collection of e-mails published recently. They were communications between fixers and they looked like they were written by twelve-year-olds. Frankly, if they are out working without Daddy's supervision, no wonder poor little Peregrine and all his Bollinger quaffing pals can't tell right from wrong. I blame the parents.

[Bowler1]

Well said, Foxbat.

Corporate responsibility has to start at the top or there is no possibility of change.

Good old Bob Diamond is at the control levers when 10% of his company value has been lost, what more does he have to do to lose his job?

Fume - rant - rave - is anyone actually listening?

[Vertigo]

Financial institutions have become so huge now that they can control and dominate the economy of a country like ours. To some extent I can't blame them for this particular debacle. These institutions are (or were then) all independent companies naturally out to make the best profits they can by whatever means they could get away with. Something any company in a free market will and probably should do. It just becomes more visible when it is huge financial businesses.

Now some of these practices will certainly be dodgy but if not regulated strictly enough and they get away with it then, again naturally, they will continue to push the boudaries of what they can get away with. I'm not condoning the behaviour of the banks. They are immoral, corrupt and greedy. However I am suggesting that the various governments should take a lot of the blame for not regulating them effectively. The FSA is a toothless watchdog. If the law is not enforced it will not be follwed.

Sadly I don't really see much improvement in that regulation.

[Shane Enochs]

Governments don't seem to understand monetary policy very well. Low interest rates and easy credit is what leads to huge booms and busts like we saw during that time period. Banks can then count on the government to cover their losses. If the governments of 1st world countries would stop doing this, banks wouldn't be able to manipulate the market in ways that cause these bubbles. In the end, banks always win, and the people always lose.

[mosaix]

Originally Posted by Shane Enochs

Banks can then count on the government to cover their losses. If the governments of 1st world countries would stop doing this, banks wouldn't be able to manipulate the market in ways that cause these bubbles.

I agree in part, Shane. But the trouble is that when a bank goes bust, unlike a normal trading entity, it's Joe Public that loses out through their current and deposit accounts rather than just the shareholders.

And that's the problem. Rather than just looking after their customer's money the banks have been gambling with it for their own ends. There really is a need to separate this gambling element from the basic requirement of just running current and deposit accounts for the likes of you and me.

In my view, governments can legislate as much as they like but the banks will always find a way around it. It's up to the bank's customers to sort this out by moving their money to ethical banks. But that isn't going to happen - most people either don't understand or don't care. Perhaps you're right, perhaps we need to let a big bank go under so that the public start taking notice and start to do something about it.

[Shane Enochs]

Originally Posted by mosaix

I agree in part, Shane. But the trouble is that when a bank goes bust, unlike a normal trading entity, it's Joe Public that loses out through their current and deposit accounts rather than just the shareholders.

And that's the problem. Rather than just looking after their customer's money the banks have been gambling with it for their own ends. There really is a need to separate this gambling element from the basic requirement of just running current and deposit accounts for the likes of you and me.

The government insures up to a quarter of a million dollars per person per bank in the US, so that's not much of a problem. If banks knew they couldn't count on bailouts, they would be less likely to make malinvestments anyway.

In my view, governments can legislate as much as they like but the banks will always find a way around it. It's up to the bank's customers to sort this out by moving their money to ethical banks. But that isn't going to happen - most people either don't understand or don't care. Perhaps you're right, perhaps we need to let a big bank go under so that the public start taking notice and start to do something about it.

Well, big banks did go under about 90 years ago, but that was engineered by the banks in order to get a central banking system in the United States. There needs to be more TRANSPARENCY more than anything.

[Ursa major]

Originally Posted by Vertigo

Now some of these practices will certainly be dodgy but if not regulated strictly enough and they get away with it then, again naturally, they will continue to push the boudaries of what they can get away with.

I'm sorry, but this is behaviour barely acceptable amongst children and only "forgiven" amongst professional sports men and women by their most avid supporters.

Those involved in corruption, as in the case of fixing the London Interbank Offered Rate**, are some of the best rewarded people in the world and the effects of their actions are not the happiness or otherwise of sports fans, but the cost of mortgages and the incomes of savers and pensioners. If their only interest is the, at best, amoral pursuit of wealth, they should not be in those jobs. The banks should fire them, together with those who either let them do this or (more likely, it seems to me) encouraged them. When were spivs allowed take over the world, and why did those supposed to represent us allow them to do so?


As an aside, it does seem odd that those who demand we almost literally worship The Market seem to spend their "working" lives undermining and debasing it.



** - Will the cleaned-up version be called New Libor, I wonder?

[Foxbat]

Apparently RBS sacked four traders for similar actions last year.

I find it quite hilarious that I've just heard this whole thing referred to on the news as an 'Institutionalised Misunderstanding'. Funny that, if I had carried out a similar act it would probably be called fraud.

Originally Posted by Ursa major

** - Will the cleaned-up version be called New Libor, I wonder?

Groan

[Dave]

Originally Posted by Ursa major

** - Will the cleaned-up version be called New Libor, I wonder?

And for the birth of this Brave New World we must all suffer Libor Pains.

[Ursa major]

Originally Posted by Vertigo

These institutions are (or were then) all independent companies naturally out to make the best profits they can by whatever means they could get away with.

Originally Posted by Foxbat

Groan

As the blame may be claimed to be collective (and probably is, inside some divisions of the guilty banks), I can now name these truth-bending people** involved, who were only doing what was wanted of them:

Lieborgs.

** - Best not call them individuals, in the circumstances.

[Vertigo]

double groan

[Ursa major]

Fortunately**, I've just checked using Google and found that someone else thought of Lieborg at least four days ago.

So I'm forwarding your groans to them.





** - Not the Fortune 500, unfortunately (if not totally impecuniously).

[Karn Maeshalanadae]

Hahaha. I liked how they said they did fraudulent reports to protect the reputation from negative media and market perceptions concerning their financial condition.


...Yeah.


I suppose they never considered what it could have done to their social reputation? I don't know what kind of charges could have been brought up or if there ever would be any but I would suspect that a reputation for dishonesty would financially hurt a corporation a heck of a lot more than paying a little higher interest on loans they might have had to take out.

[Gordian Knot]

Well if it is anything like the bankers that crashed the entire U.S. economy, reputation is of no concern to them and neither is punishment.

Not ONE upper management banker in the U.S. has been charged with a crime, and not one has gone to jail. To add insult to injury. They got to keep their jobs and are back to raking in millions in bonuses again.

What a racket!

[Foxbat]

Bob Diamond has resigned. I'm not surprised. As we say in Scotland - if you fly with the crows, you get shot with the crows.

edit - it's actually ...if ye flee wi' the craws, ye git shot wi' the craws