This happened before in the immediate aftermath of the Treasury’s rescue from collapse Continue reading
Tag Archives: RBS
Welcome to trust in banking?
Wel(l)come and Trust are two words we have come NOT to associate Continue reading
Inveraray Pipe Band sponsored lock-in at Inveraray Jail
You may laugh – but you wouldn’t if you were there and they won’t be laughing. They’ll be asking themselves: ‘What was that?’; ‘Did something touch me?’; ‘That’s a sudden breath of cold air?’.
Would you change places with them?
You can sponsor them to stay there, though – through any of the band members of by handing in donations at the Royal Bank of Scotland in Inveraray.
The young players are doing this to raise funds to help pay the costs of their first year of competition at Grade 1, the top level, after their unbeaten World Champion run at Grade 2 last year.
Their date with destiny is 3rd April, locked in from 10.00pm to 8.00am the following morning.
Mather hammers Labour’s £1bn a year ‘legacy of debt’ from PPP finance schemes
Sir George Mathewson, former Chair of the Royal Bank Continue reading
Banks and business, RBS and Diageo: The Empire Strikes Back
In a pincer movement, two massive businesses, each driven back Continue reading
McGrigor supports For Argyll call for pro tem retention of Islay bank manager
Jamie McGrigor, Argyll-based Highlands & Islands MSP, is sending the following Continue reading
Clydeport’s tax avoiding billionaire owner now plans profit from dirty coal at Hunterston
For Argyll has long been focusing on the absence of Corporate Social Responsibility (CSR) policy Continue reading
Almost £215bn of Lloyds £260bn toxic dump on state can be tracked to HBOS
The first of a double whammy on the Scottish taxpayer is our share of the debt burden of £260 billion of toxic ‘assets’ (as expensive mistakes are known in the upside-down world that is banking) that Lloyds have just dumped on the state for ‘insurance’.
The second hit is on pride rather than pocket. It is the traceability of around 5/6ths of this debt to HBOS – or what we still think of as the Bank of Scotland. This amounts to around£215 billion.
And in doing this neat transfer, Lloyds have arranged a valuable bonus not given to RBS in its own dump of £365 billion on the ‘state asset protection scheme’. In exchange for its generosity in this ‘asset’ insurance, Lloyds has negotiated a tax concession likely to cost the exchequer at least £7 billion in lost corporation tax.
The deal is that Lloyds ‘pays’ (and yes, this is no more a payment than the ‘assets’ are assets) the Government £15.6 billion as its insurance premium to protect the £260 billion of assets now lodged in the ‘scheme’ (now there’s an accurate word).
Lloyd’s will then be responsible for the first £25 billion of any – inevitable – losses but will be allowed to offset these losses against taxable income, a revenue loss to the exchequer of £7 billion.
Lloyds will also bear 10% of losses over £25 billion, with the state carrying the other 90%.
And the ‘paynent’ that isn’t a payment? Well, it’s payment in kind. Lloyds is giving the Government new ‘B’ shares in the bank with the right to convert these later into ordinary shares.
Quite how £15.6 billion can be translated to any particualr number of Lloyds ‘B’ shares in today’s gravity-affected market in banking shares is another matter.
The Herald goes for hypocrisy
Sad to see a good newspaper lose the plot so comprehensively. Today’s (28th February) Herald has:
- its lead two-column article on Page 1 - ‘Pressure on Sir Fred to do the right thing on pension’.
- a full-length single column continuation of this on Page 2, inside the front cover
- almost all of Page 5- a right hand page – on the Goodwin pension issue, under the page-wide banner headline: ‘Heat falls on Myners as blame game begins over ‘Fred the Shred’ pension
And of all of this copy, a total of about two column inches – at the end of the major piece on the Page 5 spread above, is devoted to this:
‘Of course, given all the heat the UK Government has taken on the banking crisis, it comes as no surprise that Mr Brown and his colleagues are keen to keep the limelight firmly on Sir Fred and his £16.6m pension pot rather than the little matter of the UK Government’s biggest ever financial commitment, the taking on of the banks’ bad debt which could ultimately run to £600bn’.
There’s a simple solution to this that the editor of The Herald might consider. You can recognise that the Government strategy is to turn the spotlight on Fred Goodwin’s pension and keep the public barely aware of the major morass into which it has led the national economy – but you do not have to help to do it. And you deserve little but contempt for the hypocrisy of trying to maintain some credibility by saying what you see in a throwaway paragraph at the end of a rabble-rousing splurge. Face up to your very real responsibilities.
For Argyll is no apologist for bankers but there is something profoundly distasteful about the nationwide baying over the Goodwin pension. The distaste is not just for the mass bullying. It is for the lack of independent thought and for the inadequate pubished scrutiny of Government behaviour.
The Herald, on its front page piece, quotes Prime Minister Gordon Brown in Oxford yesterday, expressing ‘anger’ at Sir Fred’s pension and saying that it is ‘ “unjustifiable and unacceptable” given Sir Fred had led the bank to the brink of collapse and to a record £24bn annual loss’.
Yet the paper did not attempt to set Brown’s comments in context. These remarks were, after all, made by the man who has led the entire country to the brink of collapse and to a record and unimaginable volume of national debt – £2 trillion and rising. Sir Fred’s £693 thousand pension is peanuts and it never was the issue.
The newspaper industry is in deep trouble – in America, where Seattle, Denver and Tucson are about to lose major titles – and in the UK. It is in trouble because it has failed to renew itself and to translate itself to operate in today’s media environment. Here we have a rightly respected Scottish newspaper letting itself down badly – demonstrating that it has not even rethought the outdated journalistic ruts of yesterday.
The UK Government is burying bad news by making Sir Fred’s pension the headline issue – and Peston is the Patsy
The row over Sir Fred Goodwin’s pension is the distraction the UK Government’s spin doctors literally ordered in the leaks they engineered yesterday. The real story is not Sir Fred’s £693 THOUSAND annual pension but the £24 BILLION annual loss that RBS declared yesterday (the biggest in UK corporate history), the £300 BILLION of toxic debt RBS insured yesterday with the taxpayer (us) and the £2 TRILLION national debt we now carry.
This was yesterday’s real story – and today’s – and for more tomorrows than we dare count.
But the Government threw Sir Fred into the road – a meaty bone the news media hounds seized on savagely, too blinkered in the rush for blood to see the real carrion, the carcase in the shadows – as the spin controllers knew they would. The carrier pigeon for news on the road-kill decoy was the government’s new trusty, the BBC financial journalist Robert Peston who makes John Redwood – aka The Vulcan – seem normal.
Peston blew the whistle on Goodwin’s pension on cue on Wednesday night’s 10.00pm news – in good time to lessen media interest in the profoundly bad financial news to be released the following day.
There are major issues of policy and principle around what we are learning of the way people in certain sectors are paid and rewarded but these are far less pressing than the genuinely frightening level of debt the UK is now committed to carrying.
Even Mervyn King, Governor of the Bank of England has now said that if Britain had not gone into this recession with the level of public borrowing it had already taken on under the Blair/Brown governments, the Treasury and the Bank would have had more scope for effective action to resist the economic slide. This criticism of Government performance by the head of the Bank of England is unprecedented and is a sign of the seriousness of the UK’s current position.
Sir Fred’s pension is not the issue. His unregulated actions on behalf of RBS are the issue. The UK Government decided to go for ‘regulation with a light touch’, which of course meant little or no regulation of the banks by the feeble FSA. This was a tacit invitation to the banks to go bald-headed for profit – which led to the current collapse of the banking system.
This collapse resulted in the government going in for panic-driven progressive borrowing, all caution thrown to the winds in the interests of political survival. And the presses of the Royal Mint are due to start rolling next week in the interests of ‘quantitative easing’.
So let’s keep Sir Fred in our sights for later on but let’s not take our eyes off the cosmic cloud of ordure that’s hovering above our heads.
And by the way, it’s not over yet. The Lloyds Banking Group will only say that it is in discussions with the UK Government, which are progressing well. These discussions are thought to relate to the group’s wish to follow the RBS into insuring another welter of toxic assets with the taxpayer. And what they want to ‘insure’ (Alistair Darling’s term for this liberating manoevre – ‘asset protection’ – is even more laughable) is said to be around £250 billion of toxic debt.
£2 trillion of a national debt already looks like a very conservative estimate.