The Bank Revolution?

You have been taught that we live in a democracy. There are laws and courts and jails for the criminals — and you were told that all citizens are equal before the law. But you know perfectly well that a banker who swindles a great many people seldom lands in jail, and if he does, he is soon pardoned or else his imprisonment is turned into something like a vacation in a country club open prison. But if you, a worker, steals the law will be after you and there will be no mercy. You were taught that this is “justice.” Yet where is the justice to  being thrown out into the street for non-payment of a mortage or rent but bankers an default on billions and get bail-outs from the government? Something is wrong here, too. Apparently, all these notions about law and order, about justice and injustice, about crime and punishment, are made in the interests, not of you and the like of you, but in the interests of those who use them against you.

The truth of the matter is that this is a rich man’s State and a rich man’s government. The State is there to act on behalf of finance capital and to protect its interests against the people. The government is the executive committee of business.

 Bankers and brokers, hedge fund managers, real estate speculators— they do not produce anything essential to human life although they have the lion’s share of control over production. As a matter of fact, they produce nothing. They transfer “paper” from hand to hand. That paper — call it checks or deeds or shares — is a claim to the fruits of somebody else’s labour. Wall Street and the City of London were doing its bit. Wall Street is the popular name for the greatest combination of financial manipulators, and it was boosting stock prices sky high. The price of stocks is based upon the estimated earning capacity of the unit that issues the stocks. This earning capacity was declared by the advocates of Wall Street to be unlimited. Prosperity was to go up and up in an unending spiral. The big sharks of the stock exchange were making billions. The fat cats of Wall Street were having the time of their lives. Everybody praised the glory of the market. The structure was built on sand. The crash came. It was inevitable. Stocks tumbled down. Capitalist propagandists asserted that it was only a violent “downward readjustment.” It was more than that. It was a disaster.

They wish us to  believe it was just an accident, or at worse, the malpractice of a few out of control individuals yet the business corporations were garnering in the profits and issuing out the rewards to their executives in huge bonuses and stock options. Then with the recession  they complained of hard times and although not  a single chairman of the board of directors of the large corporations went begging in the streets they held out their hands for alms from the government - and got it . Whereas the wages of the  workers were cut mercilessly and the benefits for unemployed turned them into  beggars at food-banks and charities. Big business is now  prosperous again, the hic-cup in the past but still  the working class is suffering great hardships.

Is this all an accident? It is not. It is the outcome of a system where wealth is owned, not by those who produce it, but by those who do not produce anything, who have amassed it out of the work of others under the protection of the law; a system where production is directed, not towards satisfying human wants, but towards making profits for the owners of wealth; a system where the primary purpose of labor — to satisfy the basic needs of humanity — is completely lost sight of in the scramble for fatter investments fortunes. Society rests on the foundation of labour, no matter what its form.

But lessons of the recession must be learned. Plan after plan is being tossed about in the think-tanks and academia to restore confidence in their economic theories. The importance to capitalism of a sound financial system cannot be underestimated. It is for that reason that they have been so quick to apply any remedies that they hope may relieve any imperfections. To the millions of workers, the government refuses the slightest aid. But to the financial oligarchy it is prepared to lend its entire machinery.  The government is always ready to help those who do not need it – those who do, the working class, will have to wrench it from them in the course of the struggle against capitalism.

For a long time it was believed that dislocations of monetary and credit systems, commonly observed during depressions, were at the bottom of the whole trouble. There followed all sorts of theories on and manipulations with currency emission, bank and credit regulations, etc., including the setting up of government controls, such as the Federal Reserve System. It was overlooked that disturbances of the fiscal structure, stringency of money and credit and panics were primarily the effect and not the cause of convulsions. It was also ignored that crises erupted in times when credit was easy as well as when it was tight. Now the Fed is viewed as the main culprit by many now in the Tea Party and Randist wing of the right. Economic crises always have a falling-out-among-thieves side to them, as different capital sectors seek long-term advantage for themselves in the working out of capitalism’s common problems.

The SPGB task is explaining the real crisis of capitalism.

The Banksters

The Financial Conduct Authority allows banks accused of mis-selling “swap” loans to appoint external reviewers and devise their own processes. They are paying former treasury bankers £1000 a day to conduct reviews whilst telling customers they do not need expert help in the process. If a client's complaint is rejected, however, he is then told by the bank to seek independent advice. The customer has to identify exactly what was wrong with the sale and what the bank should have done, though he didn't understand it at the time.

Former Bank of Ireland banker Scott Cowan, has said banks are discouraging customers from seeking support in the review process, whilst deploying £1000-a-day bankers and up to two lawyers across the table. He said one client had contacted him on the eve of a meeting at his home, involving two lawyers and a banker, which was to be recorded. "In any other walk of life, you would not want to go into a recorded meeting with two lawyers without getting some advice.

Edinburgh law firm MBM Commercial has already warned that banks have "a series of set questions aimed at eliciting material which will enable them to exclude the customer from the review and so block any redress".

Banking on ethics?

If you think the preceding post calls for a better type of bank and believe the Co-operative Bank, alas, you are mistaken. The difference is simply in the degree not the essence. The Co-operative Bank is a relatively small and “conservatively” run bank that has promoted its ethical business practices.

Former Co-op Bank chief executive Neville Richardson’s left the bank in 2011 with a package worth £4.6 million, including a £1.4 million payment for ‘loss of office’, and the same amount as ‘compensation’ for leaving. The banks financial downgrade to “junk” status by Moody was mainly based on the deterioration in the performance of the loan portfolios the Co-op Bank acquired with its takeover of the Britannia Building Society in 2009 when Richardson was chief executive of the Britannia at the time of the deal.  Like any other business,it has to beat the competition, make profits and accumulate capital. Large institutions like local councils have a fiduciary responsibility to not leave taxpayers’ money in a bank where there are any questions about its solvency.

It looks as if the Coop Bank's difficulty has arisen from "loan repayments" being less than expected, i.e some of their loans not being repaid in full or on time. I would think that there are many businesses and people who would love to have a loan from the Coop Bank. The trouble seems to be that it is having to use the funds it has to increase its capital rather than to make loans. The Co-operative Bank unveiled a rescue plan to tackle the £1.5bn hole in its balance sheet. Most of the capital to be used to plug the hole will come through a "bail in" - a process where bond holders will be offered shares in the bank.

The deal will result in a stock market listing for the group. Many will argue that the culture and practices of the bank are bound to change once its shares are owned by commercial investors. In general, the bank will be more focussed on making profits because of the "need to generate an appropriate return on equity". The bank has always focused on making a profit, that's what co-ops do: it's just a question of who gets the profit. The capital is in the hands of the capitalists, and the bank needs capital to keep going.

An estimated 15,000 retail investors, many of them pensioners, who hold Co-op bank PIBS (permanent interest bearing shares) and preference shares stand to lose at least 40% of their investment plus a large chunk of their income if the plans proposed by the mutual parent, Co-op Group, go ahead. Dividends on the PIBS and preference shares have already been suspended, leaving thousands desperate to know how they will survive. Many are dependent on this income which ranged from around 5% to as high as 13% a year, to supplement their pensions. Until now, PIBS have been regarded as relatively safe – nothing like as risky as shares. As capital issues emerged at the Co-op, the price of its bonds began to fall sharply, hitting the small investors. The PIBS now trade at 60p compared to their face value of 100p and the 160p they were at their peak.

Ethical concerns do not come before business.

The Real Thieves

For many of us Wells Fargo simply recalls all those cowboy western movies we used to watch of stagecoaches being held up by masked bandits.

However Wells Fargo has surpassed the Industrial and Commercial Bank of China (ICBC) as the world’s largest bank by market capitalization. It has also amassed almost 40% of the U.S. mortgage market by early 2013. And the real robbers has been Wells Fargo itself.

The Golden Parachute

After five years as boss of Royal Bank of Scotland boss Stephen Hester has announced plans to step down. Hester will leave later this year and will receive 12 months' pay and benefits worth £1.6 million and the potential for a £4 million shares windfall from a long-term incentive scheme.

Bank staff union Unite’s national officer Dominic said “With over 30,000 job losses over the last five years and major stress for RBS staff there is likely to be a lot of anger over Stephen Hestor's tax-payer funded multi-million pound exit package.”

A nice little nest-egg

Always the first to attack workers’ pensions rights, the capitalist class have one rule for us and another for themselves.
James Crosby and Andy Hornby – two of the three former HBOS chiefs damned by a parliamentary commission for “catastrophic failures of management” – were on pension schemes that accrued benefits at twice the rate of average workers.
The “executive section” of the HBOS pension scheme allowed them to pocket 1/30th of their final salary for each year they worked at the firm, compared with 1/60th for front-line staff.Hornby, eligible to start drawing down a £240,000-a-year HBOS pension when he turns 50 in four years time.

Ged Nichols, general-secretary of the Accord union, which represents HBOS staff, said the pension arrangements were “absolutely disgusting”. He said: “Even with James Crosby reducing his pension, for a front-line member of staff, they would still have to work for more than 20 years to get what Mr Crosby and some of the other former directors get as a pension for one year.”

The Banksters

Fred Goodwin had his knightship removed. Shall we see the same for Sir James Crosby and Lord Stevenson being stripped of their honours.
The Parliamentary Commission on Banking Standards concluded the three men, who have since moved on to new positions, should never be allowed to work in the financial sector again. The report identified bad lending (when someone cannot repay a loan), inadequate liquidity (not enough ready cash) and a lack of risk management as the key factors behind HBOS’s fall

The report said: “The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank’s board from its birth to its death...Lord Stevenson, in particular, has shown himself incapable of facing the realities of what placed the bank in jeopardy.” It said the former HBOS bosses had failed to admit their mistakes and should apologise for their “incompetent and reckless board strategy”. commission member, Lord Turnbull, pointed out that when Bank of Scotland and Halifax merged to create HBOS, the organisation had a market capitalisation of £30bn. “Just seven years later, all that value had been destroyed”

Tory MP Andrew Tyrie, the chairman of the commission, said: “The HBOS story is one of catastrophic failures of management, governance and regulatory oversight. Primary responsibility for these failures should lie with the former chairman of HBOS and its former chief executives Sir James Crosby and Andy Hornby.”

The report explained that “The lending approach of the corporate division would have been bad lending in any market. The crisis in financial markets was merely the catalyst to expose it.”

To illustrate the scale of the risks being taken on, the report said that in the corporate bank in 2001 the biggest exposure to one single borrower was less than £1m. By 2008 there were nine customers who had each been lent £1bn. One borrower had been advanced £3bn.

Crosby is now working in the City as a member of the European advisory board at private equity firm Bridgepoint. He was knighted for services to finance. He remains on the board at Compass.
Hornby is now chief executive of gaming group Gala Coral.
Stevenson, Baron Stevenson of Coddenham, has gone on to hold a number of non-executive board positions since leaving HBOS including Western Union and The Economist magazine.

The report added: "We are shocked and surprised that, even after the ship has run aground, so many of those who were on the bridge still seem so keen to congratulate themselves on their collective navigational skills."
Socialist Courier isn’t. It par for the course for the capitalist class.

Crime does pay

Despite being fined for money-laundering for drug cartels and paying compensation for cheating customers over payment protection insurance HSBC rewarded shareholders with an increased dividend and its chief executive Stuart Gulliver took £7.4 million in pay. it paid 204 of its staff more than £1m in the year, with 78 of those based in the UK. Underlying profits were up 18 per cent to £10.9bn.

Crime after all does pay.

A Thieves Den

"Some will rob you with a six-gun, And some with a fountain pen." - Woody Guthrie

It has been described as the biggest banking fraud in history yet no-one has been prosecuted for the Libor fixing scandal. The financial rewards of rigging rates were, and are, immense. For example RBS’s rates, currencies and commodities group — the one where Libor rigging and other forms of market manipulation are believed to be commonplace — saw its income rise by 87% in the half year to June 2008, at a time when the overall income RBS Global Banking and Markets fell 10%. Royal Bank of Scotland admitted that between 2006 and 2010 staff based in London, Singapore, Tokyo and the US conspired to manipulate the global financial benchmark, the London Interbank Offered Rate (Libor) calculated in both Swiss Francs and Japanese Yen. By pleading guilty to one count of wire fraud in its Japanese arm, RBS managed to avoid having its US operations shut down by the US Department of Justice.  Libor is a global benchmark used to price some $300 trillion of contracts, ranging from mortgages to student loans to interest-rate swaps, calculated by averaging out submissions from up to 40 global banks.  Two other global banks have reached settlements along similar lines over Libor crimes. UBS was fined $1.5 billion (£950m) in December, and Barclays was fined $451m (£287m) in June 2012. A further 20 or so global banks are have yet to reach settlements. In the UK they are thought to include Lloyds Banking Group and HSBC.

“This is the biggest scandal, the biggest anti-trust felony, in the history of the world, and it continued for years,” said Bill Black, associate professor of economics and law at the University of Missouri-Kansas City, and a world leading expert on financial crime. “Even after the investigation became public knowledge, the felony continued, and it continued with greater efforts being made to cover it up, with people being instructed to no longer to use instant messages and such like in order to make it harder for the regulators What is most stunning is that these traders and submitters were willing to say these things, knowing that there was a verbatim record being kept. What does that tell you not just about the institution itself, but also about the FSA and the Serious Fraud Office? That is the one of the most important and revealing fact that comes out of this. The perception inside the bank was ‘we don’t need to worry about those clowns’.” He added "The bank is too big to prosecute, it’s too big to run honestly... it’s created catastrophic harm to the British people. RBS holds the British economy and the British people hostage."


Since being found out by regulators, RBS’s strategy has been to blame junior and middle-ranking people for the scandal, claiming that no one at the top of the bank knew it was going on. This is surprising, given that in September 2007, the Financial Times’s Gillian Tett highlighted concerns that Libor was “a bit of a fiction” [FT 25 September 2007], and that in April 2008 the British Bankers’ Association sent a memo to ‘panel’ banks including RBS asking them to check their Libor submission processes and ensure they were “submitting honest rates” after the Wall Street Journal’s Carrick Mollenkamp highlighted “growing suspicions about Libor’s veracity” [WSJ 16 April 2008]. Some RBS traders who have been dismissed for Libor rigging argue that they are being used as scapegoats, claiming that their superiors  ‘condoned collusion’. Tan Chi Min, RBS’s ex-head of Japanese Yen interest-rate trading, declared that Libor rigging was a well-known and common practice at the bank in 2006-11. The FSA said that, in March 2011, RBS misled the regulator, indicating that it had put proper systems and controls in place when it had not.

Many believe the government and  authorities are being too soft on financial crimes, seeing mollycoddling miscreant financial institutions that it majority owns as more important than seeking justice. The fact that RBS’s share price rose on the day of its settlement suggests investors believe it got off lightly.  Neil Barofsky, former special inspector-general of the Troubled Asset Relief Programme and author of Bailout, said: "...each settlement on favourable terms reinforces the perception that, for a select group of executives and institutions, crime pays. It is only rational. They know that they will get to keep all of the ill-gotten profits if they go undetected, and on the small chance that they’re caught, most probably only the shareholders will pay – and only a relatively minor fine at that. The lack of meaningful consequences for those committing these frauds encourages future fraudulent conduct."



Adapted from here

worth every penny?

Sir Philip Hampton, chairman of the Royal Bank of Scotland, asserts that its cheif executive, Stephen Hester,  is only “modestly paid” - at £7.8 million a year. “Stephen is doing one of the most difficult, demanding and challenging jobs in world business. He has been paid well below the market rate compared to others in the same job.” Hampton explained.

Hester’s £7.8m package is made up of a basic salary of £1.2m, plus a maximum annual bonus of £2.4m and a further £4.2m that can be earned through the bank’s long term incentive schemes.

bankers cash in

Royal Bank of Scotland investment banking boss John Hourican pocketed £4.7 million yesterday as he exercised lucrative share options in the bank – after helping push through thousands of redundancies in the division last year.
Hourican’s sale of 17.6 million shares after exercising share options, at an average price of about 27p, comes after RBS’s global banking and markets division has made some 5,000 people redundant. This has been with the encouragement of the UK government as RBS has scaled back its investment banking activities to focus on UK lending. Recently, it emerged that Hourican received a total pay and awards package, including bonuses, of about £7.5m last year.

It came on the same day that Toby Strauss – insurance chief at Lloyds Banking Group, sold 1.2 million shares worth more than £380,000.

There are bankers and then there are bank staff

While investment bankers collect hundreds of thousands of pounds each year in salary and bonuses, front-line branch staff are more modestly paid, with starting salaries typically around £14,000 a year.

One Lloyds insider said: “It’s always the people on the ground who suffer. You could earn more working in Asda..."

Cashiers at the high street lender earn commission by referring clients to sales staff, who talk them through the options for mortgages, savings accounts and other products. But the bank has not only cut the commission from £2 to 60 pence as part of a clampdown on costs, and it has increased the target for each cashier from 72 referrals every three months to 77.

banking on repression

The 84% state-owned Royal Bank of Scotland faces damaging revelations about its ethical record after it emerged that the bank was part of a deal to issue more than $800m (£489m) in Belarusian government bonds earlier this year, a month after the country's leader, Alexander Lukashenko, ordered the brutal repression of pro-democracy campaigners. In Belarus, hundreds of opposition activists were arrested and many of those who stood against Mr Lukashenko in last December's disputed elections have since been thrown in jail after a series of show trials that have been condemned by international observers. Many pro-democracy groups have urged Western businesses to shun the regime until their demands for reform are met.

RBS is the only British bank to have recently done financial deals directly with the Belarusian government. The scandal of raising bonds for Belarus, a country with by far the worst human rights record in Europe, cannot be described as a one-off lapse of judgement on the bank's part. The bank's apologists, no doubt, will claim that it has done nothing illegal because the government of Belarus is not under international sanctions, apart from a feeble EU travel ban placed on top officials.

Natalia Koliada, from Free Belarus Now, said: "When British businesses invest in Belarus, or RBS sells their government's bonds, it helps support an authoritarian regime."

Full details here

sharing the pain?

In 2006 Andy Hornby was appointed chief executive of HBOS. One analyst wrote in a City circular: "Andy Hornby is a superstar." He was said to have been devastated by the collapse of HBOS in 2008. But within nine months he was back with Alliance Boots. He was the highest paid member of the Alliance Boots' board, with a pay package of £2.4 million which included £750,000 of bonuses, plus bene-fits and pension supplements. But he quit Boots after less than two years in charge, stating that he needed to step back from corporate life. Executive chairman Stefano Pessina said that Hornby was stressed and required a break. At the time the company said he would not receive a pay-off but the annual report revealed he received a £450,000 cheque to stop him joining a rival healthcare group.

Hornby is back in another top job - the head of the bookmaker chain Coral. He joined Gala Coral Group as chief executive with the job of reviving the bookmaking arm of the gambling company. He will take control over 1,670 shops as well as online and telephone betting services.

So from the stock market casino to the bookies, Hornby gambles on and while we lose , he wins.

http://thescotsman.scotsman.com/scotland/Andy-Hornby-lands-a-top.6804297.jp

We always said bankers were *ankers

When giving evidence to the Treasury Committee on 10 February, the former chief executive of Royal Bank of Scotland, Sir Fred Goodwin said: "My pension is the same as everyone else in the bank who is in a defined benefit pension scheme. It is determined in the same way as anyone else."

It emerged that Sir Fred is drawing a pension of £650,000 a year. Although he is only 50, he is entitled to the payment for life, with a pension pot worth £16 million.

Royal Bank of Scotland (RBS) has announced the largest annual loss in UK corporate history. RBS, which had to be bailed out by the government last year, said that its 2008 loss totalled £24.1bn ($34.2bn). Reports had suggested job losses could total 20,000.

Sir Fred's strategy and decision to buy ABN Amro is widely seen as making the bank more vulnerable to the credit crunch and having to be bailed out. The bulk of the losses came as RBS made a £16.2bn write-down on poorly performing assets, mainly resulting from its 2007 takeover of ABN Amro.

Yes , indeed , a well-deserved pension and well-earned luxury for life while all those sacked will struggle on the dole to pay the bills and pay the mortgage but unlike the belated grumblings of Chancellor Darling , Socialist Courier was reporting and condemning Goodwin's feather -bedding way back in August 2007 and October 2007 and March 2008 .

Alright for some , eh ?

Amanda Staveley , former girlfriend of Prince Andrew , is set to bag almost £40million in commission paid to her advisory firm, PCP Capital Partners, for brokering last week's £3.5billion capital injection into Barclays Bank by Middle East investors , according to The Independent.

PCP Capital Partners, which Ms Staveley founded in 2005, acted for Sheikh Mansour Bin Zayed Al Nah-yan, a member of the Abu Dhabi royal family, to deliver his £3.5bn personal investment into Barclays in return for a 16 per cent shareholding of the bank.
As part of the overall £7.3bn investment Barclays unveiled on Friday, the bank is also raising up to £2bn from Qatar's sovereign wealth fund and £300m from a member of Qatar's royal family.
PCP's total commission will be £110m, but after other advisers are paid Ms Staveley's firm will earn a £40m profit. While PCP also has a handful of other partners including David Mellor, the former Tory MP, Ms Staveley is expected to pocket the majority of the £40m.

Ms Staveley also previously brokered the takeover of Manchester City football club in August by the same sheikh, Mr Mansour, who is investing in Barclays.

Ms Staveley first started to make her mark with the sheikhs and the Arabian Gulf's kingpins when she set up a restaurant in Cambridge-shire after persuading her bank manager to lend her £180,000. Crucially, she set up her Stocks eatery close to the British horseracing hub of Newmarket.The patrons of the restaurant, where Ms Staveley would work while also dabbling in her alternative career of dealing in shares worth thousands of pounds, included senior staff from the Godolphin stables owned by Sheikh Mohammed bin Rashid al Maktoum, the ruler of Dubai and the most powerful racehorse owner on the planet.
This is where the seeds of her association with the Middle East's wealthiest figures were sown.

Not what you know but who you know , it appears

Credit Crunch - Not for everyone , it seems

Bob Diamond, the US banker who runs Barclays' investment banking arm, has cemented his position as one of the highest paid bosses in a FTSE 100 company after receiving almost £36m last year. The figure comprises £21m in cash, bonuses and shares in addition to £14.8m from a three-year performance plan. The £21m includes his £250,000 base salary, £6.5m cash bonus, a £11.3m share award held in a trust for three years and £3m of shares which will be received in three years provided performance criteria are achieved. His total is boosted by the £14.8m "retained incentive opportunity" - half in cash, half in shares - put in place three years ago when he joined the Barclays board.

Diamond achieved the bonus even though Barclays took a £1.6bn hit from the sub-prime crisis in the US and despite ongoing financial woes which have seen billions wiped off share values worldwide. The bank's profits in 2007 were £7bn, the same as 2006, and its share price has suffered.

The report published yesterday also exposed the pay to bankers working on takeovers. Barclays paid one former director £600,000 a month during the bank's ill-fated bid for Dutch rival ABN Amro. Naguib Kheraj received the sum, plus £14,178 a month in benefits, from May to December 2007 for a "corporate finance advisory role". The £4.9m he received was in addition to the £657,000 he was paid to the end of April while he helped his successor settle in.

The big gamblers

Despite the turmoil in the markets, bank failures and write-offs amounting to £60.5 billion City bonuses will top £6 billion this year.

Dozens of bankers at Goldman Sachs, for example, were awarded bonuses of at least £5m each at Christmas, with one lucky trader pocketing more than £10m in cash and shares. The average bonus at Goldman Sachs last year, one of the more extravagant payers, was £300,000. Staff are thought to be dreading the possibility that the average this year will be a mere £200,000 – And , of course , that is all on top of salaries and other emoluments.
Professor Stigliz said "Even if they lose their jobs, they walk away with large sums..."

Professor Stiglitz, a former chairman of the President's Council of Economic Advisers, under Bill Clinton explained ."...When things turned out well, they walked away with huge bonuses. When things turn out badly – as now – they do not share in the losses...The system was designed to encourage risk taking – but it encouraged excessive risk taking. In effect, it paid them to gamble...It is one thing to gamble with one's own money – but these bankers were gambling with other people's money – and with the government backstopping any losses. This is unconscionable."

All the way to the bank

The Times tells us that :-

Andy Hornby, HBOS's chief executive, took home a £1.9 million pay packet for the year, including an annual bonus of £449,000.

Peter Cummings, chief executive of HBOS's corporate business, was paid £2.6 million, after picking up a £300,000 bonus from the executive bonus scheme and a further £1.3 million from a separate bonus plan run by the corporate division.

Benny Higgins, who was ousted last year as head of HBOS's retail banking business, was paid £2.3 million, including his full annual salary and benefits of £900,000 and the same amount again as a payout.

Dennis Stevenson, the chairman, was paid £821,000, including £113,000 in benefits. Jo Dawson and Dan Watkins, the new joint heads of the retail business, were paid £1 million and £329,000 respectively.

Jobs for the Boys

Jonathan Powell, former chief of staff to Tony Blair, is to become a senior executive at a leading bank. He will take up a full-time position as a senior managing director of Morgan Stanley's investment banking division. The son of an air vice-marshal, Mr Powell comes from a powerful family that includes his brother Charles, who was Margaret Thatcher’s foreign policy adviser. His other brother, Chris, is influential in advertising and has done some work for the Labour party.

A former journalist and diplomat, Mr Powell is expected to play a role in transactions involving some of the bank's largest clients in UK and Europe. As a managing director in Morgan Stanley's investment banking division, Mr Powell will be responsible for introducing the bank to important governmental and corporate clients he met during his time as aide to Mr Blair.

It has become increasingly commonplace for investment banks to hire former government ministers and politicians to introduce them to clients and brief them on government policy. Former Conservative prime minister John Major is a senior adviser to Credit Suisse while ex-German chancellor Gerhard Schröder works part-time for Rothschild. Italian Prime Minister Romano Prodi spent time with Goldman Sachs before and after his first spell as Italian leader in the 1990s. Lord Waldegrave, a former Conservative minister, is vice-chairman of investment banking at UBS, Switzerland's biggest bank. Jeremy Heywood, Mr Blair's former principal private secretary, left his job as Morgan Stanley's co-head of UK investment banking to become Gordon Brown's head of domestic policy in June.

Brown-nosed snouts in the trough