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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’…

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 s…

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 t…

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 …

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 mi…

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 glo…

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…

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. H…

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 tak…

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…

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 pub…

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 e…

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…