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It was amusing to watch the bankers. However, they quite clearly understood the prime rule: that nothing, but nothing, could be done to them. If bank robbers were allowed to get away with their loot in a similar way, I am sure they would be just as contrite; though they would not be able to afford the image doctors who helped these miscreants polish their performances. Fortunately millions were not wasted on the spectacle, as they might be on any judicial enquiry; though, if you include all the costs incurred, this might have been just about the most expensive piece of television theatre ever broadcast.. But the sad truth is that we cannot bolt the stable door. The horse has bolted, and with it has gone tens of billions of our money!

It was, instead, the ultimate spectacle of hypocrisy; the hallmark of our age. When they were in power they, very wisely as it has turned out, insisted that any regulation would only cramp their management brilliance (even though they might not have even been qualified for the job). Judge us by our results they always said. Now we can do exactly that, and all we can get is an apology. It is the classic example of the asymmetrical rewards (to them) versus risk (to us). Could I ask that in future, when any similar robber baron, asks us to trust them – to judge them by their results – we include in the contract something like a pound of flesh (albeit without the legal loopholes) which makes them think twice about their actions.

It looks like the government's attempt to pin the entire blame on the banks is succeeding. Don't let them get away with it - for ten years Brown was living beyond his means and encouraging industry and the public to do likewise. His very own FSA failed to spot the approaching meltdown and now Brown is trying to wash his hands of the whole thing. Press the government on this.

When customers err with their overdrafts etc, apologising makes no difference, they are punitively charged. Why do apologies matter at all when these banks have crippled people's pensions and savings, lost people jobs etc.

This was just political theatre. I heard nothing new today.

knowing have crucial banks are to the economy why is it not a crime to be so reckless [sacking risk managers, leveraged 110 per cent etc] in charge of a bank that you destroy the wealth of a generation putting 100,000s out of work?

the usa has no problems seeing financial disasters in court. Why does the uk have such psychological problems sending finance people to court? Why are they not being sued for every penny of assets?

bringing the uk to its knees is legal in the uk?

never in the field of human finance have so few destroyed so much with so little blowback?

Yay, Jon Sopel!

THE STEVENSON PLOY

Having offered a PROFOUND apology Lord Stevenson paused and delivered: "and I THINK I WOULD say UNRESERVEDLY sorry . . . "

He clearly was not SURE, as he had to THINK, and then retreated into the CONDITIONAL; both conflicting with the word UNRESERVEDLY. All I can say is "good Lord!"

Someone once said that apologies mean very little. If it is to someone you love, an apology shouldn't be necessary. If it is to someone you do not love, they are unlikely to attach much importance to it. What surely matters is that remorse is translated into changing their behaviour. Or they will just be like ill-behaved children who shout out 'Sorrr-eee!' and then carry on as before.

And my view is that the drive to maximise shareholder value and the super-competitive, short-term nature of the stock market will lead to such risks being taken again. You can scoff now - 'They must have learnt their lesson when they screw things up this much ? - but this is exactly what was said when Enron and Global Crossing went pear-shaped..

Unless the 'rules of the game' are changed behaviour will revert to type in a few short years.

If FIFA / FA referees stopped booking players for breaking the offside rule, then the game of football would look very very different next year. For years, GOVERNMENT has been telling the referees not to bother handing out yellow and red cards as it spoils the flow of the profits...

And until it starts chucking some of them into a 'sin bin', you will not see real, radical systemic change in the banking industry.

Was it Yogi Berra who first said "It's like deja vu all over again...".

Are you sure you've got the right guys on trial? Sub-prime mortgage crisis originated in the U.S. Sure, in the UK, we have similar problems with household debt and public finance deficit, but still ‘small beer’ in comparison to the dire situations across the Atlantic. Don’t forget the City of London is populated by American banks holding much larger balance sheets and presumably more toxic assets than the native British ones. Even though the CEOs and top executives at the fallen angels with the likes of NRock and HBOS are right to blame, the rule at financial markets stipulates it is a zero sum game - someone’s loss is someone else’s gain. Why are we not investigating the banks and hedge funds that have benefited from this financial saga? Who is absorbing all the money governments have filled into the financial blackhole? It surely didn’t go to the place it was supposed to go, otherwise markets would have regained confidence by now after repeated, massive government bailouts with taxpayers’ money. I suspect some smart financial speculators are literally laughing behind the scene as we speak, for robbing countries after countries in broad daylights, while senior government economic advisors scurry around like headless chickens talking about ‘the worst economic depression over the last 100 years’.

I say, don’t be so hard on those bankers mentioned in your program last night – chances are they are just pawns in a much larger game. If I have to make a bet, I would rather put my money with those banks that are still left standing; I suspect they are doing quite well this year....

A YEAR OLDER, BUT NONE THE WISER ALAS

lordBeddGelert (#7) NewFazer is correct. Dp yiu have any suggestions aside from statism (which our well conditioned liberals here find so aversive)?

BRITISH RETRIBUTION FOR BRITISH COCK-UP IN CHIEF. (#8)

"Are you sure you've got the right guys on trial?"

Of course not, H. Gordon keeps admitting, but no one will listen. It is as if he is cursed never to be heard, thus never having the catharsis of trial and conviction. He is living a Greek myth.

Brown has made clear - confirmed by others - that he continually told the Cabinet we needed a world system of regulation. It follows that he saw the possibility of a global problem - up to ten years ago. But he was the Do Noting Chancellor; he did nothing to prepare Britain for that possibility.

Brown is not to blame for what happened in America, but he IS to blame (that is the Mr Hyde half) for knowing the world was 'exposed' and doing nothing to protect the British people. Let's have him up before the Inquisition.

I watched the Bankers today and thought they got the better of the MP's. They started off pretty nervously but as the naive and amateurish nature of the questioning emerged (What are your qualifications? How much is JSA? were two of the worst) you could see their confidence growing. It must have dawned upon them at some point that this half baked "savaging" was the worst thing they were going to suffer for their actions. By asking such stupid questions the MP's just made themselves look petty. I would have been more interested to know what part the credit rating agencies played in all this and the famous email from Standard and Poors. Also why they didn't examine the AAA rated dodgy mortgage packages a bit more closely. It would not have been particularly hard to do. All this talk of mega complicated derivatives is a bit misleading as they can be examined by using a bit of common sense.

Its amazing, In this country you have people who are strugling to make mortgage payments due to the incompetence of these greedy and un-regulated bankers who think that they have the right to think that they can take your home from you and sell it at a substantial loss in an auction due to because they could not do their jobs properly in the first place and all that's important to them is keeping their shareholders happy and making sure that they get their bonuses whatever the cost.

Well all i can say to those people who are about to lose their houses due to these incompetent people, i would recommend that you seek legal advice and to assess if these people misslead you with regard to the mortgages that they offered you.

As the law of averages state "what goes up must come down".

I am sure that legal eagles have been looking into this and i am sure that they must know that these so called financial experts have committed criminal fraud. If Joe Public did the same thing, they would get 10 years in prison.

How could a financial system in this country permit financial fraud on the scale that has happened over the last few months/years. If Joe Public did what these people had done, they would without doubt be tried in a court of law for criminal fraud and no doubt because they are not from a certain class background, they would be in prison for 25 years. The so called " we are sincerely sorry for what has happened" would not wash with these criminals.

Here is another example of financial incompetence in this country. Up until recently I had been with a certain bank for over 23 years. I have never been out of work, I am in a job that this country is desperate to get graduates into, but is viewed as a career that graduates view as "not glamorous enough". I refer to electrical engineering, my apologies to those university students who like myself find what we are doing job wise is a fascinating subject, but the part that annoys me more than anything with these incompetent financial people is that i have a proven credit history.

I have had several loans over my working career, and these loans have been paid off well in advance of their completion.

When i asked 5 years ago when i applied for a mortgage " why am i not worthy of a 100% mortgage when i have a proven credit history" , The so called financial adviser at the time who interviewed me said and i quote "I fully agree with what you say, but you are one of the sort of people who want to pay off their loans early, and that in most cases you would be refused because you would not make enough interest for the bank".

Surprisingly i had decided to tell the bank that i had been with for over 23 years politely what they could do with their bank account. I had tried several other UK banks and will tell anyone in this country that UK banks cannot be trusted .

The latest and in some cases previous graduates who currently are up to their eyes and neck in debt, who themselves have been conned into thinking that what lies at the end of the rainbow is a crock of gold for all your hard work are now realising that they are competing for graduate jobs in which that unless you are from a certain part of the country or that your parents are high up in highly paid executive jobs, you are unlikely to get to the crock of gold as promissed and like the rest of us mere mortals have to start from the beginning, (i.e. sweeping up and making the tea).

I have decided that i will never take out a mortgage and that i would rather waste a constant level of money per month, safe in the knowledge that i can always walk away from wherever i currently live, and i can always find somewhere else to rent safe in the knowledge that my rating with letting agents is so high that they offer me better than average properties knowing that i will look after the properties i live in and i can move as and when i like and that i have the rent well in advance.

In my opinion this country has been far too reliant in making money from finance. This is what i would advise to financial people in this country.

(1) look at people who have a proven credit history. You will be guaranteed a decent return on your investment by looking at those with a 110% proven credit history

(2) Get rid of these un-controllable mortgages and treat mortages like personal loans, instead of relying on variable, tracker and interest only mortgages, provide home loans that will be fixed for the whole period of the agreed loan period (i.e. 25 years on average) which will mean that people will know what is payed constantly every month safe in the knowledge they know what they have to pay without any massive increases and at the same time have or create a national insurance scheme so that if people do fall into financial problems a safety net is available to help people.

(3) Savers are currently being screwed due to the incompetence of the financial industry and I have to say that some of the blame has to fall on the current government in such that there should be 2 systems in place (a) a seperate system for banks to loan money for loans, mortgages etc (b) a seperate system to enable savers to get a guaranteed minimum 100% safe return on their savings.

(4) Get rid of the current pension systems and have a national pension system in which everyone contributes to enable to have a comfortable retirement and not just the greedy elite scum.

As for the so called 4 bankers today grilled by the policy committee, make an example of them by taking everything that they have taken from innocent people and put them in prison for 25 years. Ensure that there is a financial watchdog in this country that will rule the banks with a very verys sharp and long stick and I would propose that the best people for such a job would be the inland revenue.

Mt Personal Views -

MPs Question Bankers !

I am sure the RBS and HOBOS share holders are pleased MPs got a "Sorry" for their share losses.

How about Mr Brown saying "Sorry" to us taxpayers , for his world leading based regulatory system ?

In fact just resign and call a general election , life is to short to listen to gamblers hard luck stories !

Looks as though we should have genetic testing before allowing people to work in the finance industry!

I'd recommend an article written by Matthew Lynn on Bloomberg today.

His article today suggests we'll see big falls in the pay of people in banking etc (50% he estimates). He's got some interesting historical stats to back it up. He asks whether banking is to the "noughties", what the typewriter industry was to the 1980, or the horse and carriage industry of 100 years ago, or UK coal mining in the 1980s, ie suffering huge overcapacity and ripe for downsizing with the consequent impact on earnings.

If he's right, and I suspect he certainly isn't too far wrong, then it has big implications for the UK, in particular the government's tax take. It would be interesting to get the Treasury view on this. My rough calcs suggest a 2.5-3% drop in tax receipts in perpetuity resulting from the decline of the UK's biggest industry. That's a lot of public sector cuts.

Full article is at:



Then click on "Bankers Are About to Take a 50 Percent Pay Cut"

ecolizzies - Oh, don't bother with that, just make sure that at least half of them don't have a willy and that would be a good start...

Very good programme last night. That young Mr Sopel seems a fine 'graduate trainee' - one suspects he might go far.

Cause of the credit crisis is relatively simple, solution is tougher and likely to take time.

Banks were too highly leveraged. they were holding £3 of capital for £100 of liabilities (Newsnight comment stated some banks were leveraged £1 of capital for £65 of liabilities). Up until last year there was no expectation that the securities backing their liabilities (viz AAA rated mortgage securities) would ever fall in value (the Credit Rating Agencies were confirming this). However, the securities did fail when individuals who were loaned more money than they could afford, failed to pay their mortgages. First impact was loases for banks thus reducing their capital base and making their loan to capital ratio even worse - government stepped in to "sort of" reinstate capital.

However, the problem of too high a loans to capital ratio remains. We have to wait for the loans to be repaid and have to accept a new lower loans to capital ratio. What is a right ratio? 33:1 - certainly not, 20:1? perhaps 12:1 might be OK. Banks can only bolster their capital in 2 ways:
- rights issues from shareholders (forget it).
- increase their profits (clearly they are trying to do this, in numerous ways).
Government suggestion to "borrow" more money takes ratio wrong way and it seems ludicrous.

Government should have been more rigorous in their oversight, Credit Rating Agencies should have been more astute, Banks should have been more cautious (and less greedy).

Solution - more capital for Banks! + time.

NEWSNIGHT WITHOUT STUFFING OR MUMBLING - BRAVO!

How refreshing to have the incisive, clearly spoken, Jon Sopel in the chair, showing that a knowing twinkle in the eye can do far more than histrionics.

Don't give him a bizarre salary or some flashy award, just 'give him his head' with these devious ciphers who run our lives.
A thousand mile journey (Newsnight's return to gravitas) starts with the single step of installing Jon Sopel.

barrie (#10) "But he was the Do Not[h]ing Chancellor; he did nothing to prepare Britain for that possibility."

I keep saying this, but I'll say it again - , and doing nothing is what they do.

Once one looks at Blair's, Brown's, Major's and Thatcher's years this way, what's been going on since the 'Sex Pistols' generation, becomes painfully clear, if only one looks (and most of us still don't want to look past the spin).

Simon_987 (#11) "Also why they didn't examine the AAA rated dodgy mortgage packages a bit more closely. It would not have been particularly hard to do. All this talk of mega complicated derivatives is a bit misleading as they can be examined by using a bit of common sense."

Exactly, it was as if the Chair of the Treasury Select Committee was offering them an excuse - i.e. securitization was even too complex for even the brightest of the bright - what can we learn from this? Not securitization was a venal process used to hide what was being done rom consumers and regulators so they couldn't be better assess what was going on.

One of the executives said securitization (basically here being sold as something as benign as Unit Trusts) was a new panacea! But Unit Trusts have been around for decades. What was new here was the scope of the sales to people who obviously couldn't afford what they were buying () and how that was done through brokers/agents at arms length so the banks could turn a blind eye and dump the risk somwhere else whilst taking the profits/bonuses. Now they want to dump it on Joe Public's kids of the future.

What is so complex about that? It's venal, legal, but not complex as the way they 'spread' risk was just devious. If HMG has its way, they'll have the chutzpah to be asking what's wrong with that next (as it wasn't illegal, and there is nothing wrong unless it's proscribed by law, and the laws which made it illegal were repealed in teh 90s) as they count on public dysgenesis/ignorance/apathy. The sad thing is, they'll probably get aay with it too whilst those who have been pointing out why this has happened will be screamed at by the vociferous, albeit somewhat dim (but educated), hordes of the liberal-democratic politically correct who judge everything limbically.

we need an election

no political party can bring the uk to its knees give no apology and not have consequences?

CAVEAT EMPTOR

#20 erratum "Not securitization was a venal process used to hide what was being done from consumers, rating agencies, and regulators, so they couldn't better assess what was going on.

That's how the de-regulated market evolved/drove venality/deception at the expense of the vulnerable.

I see Steve-London has re-posted the HM Treasury link he did some time back. It really is required reading along with the feb 2007 material from ETS. Some of us were beating this (ETS) drum much earlier (with about as much success as ETS).

SCOOP ! RESULT ! Crosby is GONE !

SPIN SPIN SPIN

Ö÷²¥´óÐã News/Radio interviewing on the resignation of Sir James Crosby said that it would have been a brave bank which said to its shareholders in 2007 that it was not going to aggressively pursue growth at that time. Yet was that not exactly what HSBC said to some in 2007 who had been compaining about the bank's strategy/flat capital growth profile? Perhaps Newsnight should be asking HSBC why they didn't get caught up in this risk fiasco anything like the local British banks did?

DOING TOO MUCH? (#19)

I was addressing (at #10) Brown's culpability (ref. #8) for 'doing nothing' JJ, not his motivation, which seems to be your focus.

I have absorbed your hypothesis regarding the 'frame of reference' for laxity in governance.

I think, therefore I am uncommitted.

barrie (#25) "I think, therefore I am uncommitted."

Anarcho ergo dumb?

#22 JadedJean

As ever the goose steppers are trying to sound like Aristotle but still always sound like Adolf:

Eugenics
They don't affirm (or deny) the Holocaust - but do like statistics about 30's Jewish survival rates.
Race "realism".

"Anarchists and Trotskyites" paint Hitler "as darkly as possible". I actually vote Lib Dem.

Etc etc.

They aren't Nazis or the BNP but I recall Steve-London was "thinking" about the latter.

Therefore sane people who like democracy (they actually say they don't) and freedom will probably have already guessed that they use this blog as a propaganda tool for their hateful policies.

Comments about "anarcho-capitalism" and the current economic crisis should be viewed in the context of their preferred "planned economies".

They beat their (ETS) drum - but people know that genetic variation is greater within a race than between races. Are they going to bang their drums in a scientific journal? No. Apparently a lot of their "scientists" have a hard time being taken seriously.

Go figure!

Oh and mainstream scientists are "all Jews" when push comes to shove.

#27

"They aren't Nazis or the BNP but I recall Steve-London was "thinking" about the latter."

Would you be so kind to show me where I have said such ?

Go1 #27

Ah! You are making progress, excellent. You no longer refer to the statistics provided as 'dubious'.

Keep reading the links :-)

thegangofone (#27) "Are they going to bang their drums in a scientific journal? No."

You need to have a word or two with those science masters. You also need to learn about range, variance and standard deviations. You need to get a grip on measures of central tendency.

ANARCHO ERGO DUMB. (#26)

That is just BRILLIANT JJ. May I have permission to use it as my sign-off from now on? It works at 'so many levels'!

I am blown away.

A EUROPEAN HUMAN DEMOGRAPHIC 'NEUTRON BOMB'?

thegangofone (#27) Have a look through and ask yourself - if you wanted to subvert a culture which you wanted to ultimately control, don't use messy Weapons of Mass Destruction, just flood the target countries with large numbers of low ability people (all races including an inflated underclass of the indigenous nation through keeping its brighter females in education and the workplace longer as independent 'equals' thus ensuring they have a lower TFR relative to their less able 'sisters') knowing full well that in time this must ultimately undermine their economies by thinning out those who could sustain viable government and infrastructure, count on greed and impulsivity of bankers to secure this. All one would need to do is ensure that one's own group continued to breed endogamously and eugenically as a protected, bright, group/race whilst denying the reality of race, and in time, one would be assured hegemonic advantage. In the meantime, one would just have to spin the facts of behavioural genetics in such a way that most people remained clueless about what was going on - Marxist political correctness presented as Civil Liberties, Human Rights, anti-fascism, you name it, that would do the trick via an expansion of Higher Education, as that would target those who could read well (i.e bright females and feminised males) leaving the less literate to continue breeding unhindered.

Venally clever eh?

WMD AND ALL THAT (32)

Many declare that 'The Bomb' has given us decades of 'the peace'. But we will never know, because the alternative was not tried.

Every 'over-blown' culture in the past, ultimately dissipated and decayed.

JJ - how can you be SURE the western cultural wobble is being 'engineered'? I totally accept it MIGHT be so, but I have seen nothing in (e.g.) Private Eye, yet they are not noted for alliance with any power group (understatement).

The nearest parallels to your hypothesis, to my, admitted, limited perception, are Smersh and Spectre. You have raised my vigilance, but as yet, I am not seeing the little black shoots of infamy to the wide effect that you purport..

THE ROAD TO HELL IS PAVED WITH INTENSIONS/SUSPECT CREDIT ASSIGNMENT

barrie (#33) "JJ - how can you be SURE the western cultural wobble is being 'engineered'?"

One can't. Basically the fundamental error throughout history has been to neglect what is on the grounds that an alleged party is or is not behind it. This is why I keep bringing up what is known as 'The Credit Assignment Problem' which was a conundrum in Artificial Intelligence only because GOFAI was fundamentally misguided in the first place. We attribute credit superstitiously as an operant modus vivendi. So it really doesn't matter if what is happening is engineered or just the unintended consequence of a configuration of what some may believe to be 'good ideas' or even chance. In fact, I favour the later view. But if there are groups who wittingly or unwittingly peddle policies which have clear empirical consequeces (e.g. education, education, education and TFR/dysgenesis) I think those consequences of such policies should be spelled out don't you? If those peddling or benefting from such policies continue regardless, even denying the facts, I think it fair to attribute some of the responsibility/credit/blame to them don't you? I really don't care if they have scotoma about their own role or not, our penal system is full of such people (second only perhaps to our Financial Services Sector). Humans definitely have far less awareness of the consequences of their actions than they give themseves credit for. We are far too easily impressed by glib confidence at the expense of sound evidence.

THANKS JADED JEAN. (#34)

I will re-read that a few times (and look up all the acronyms).

Incidentally (you mentioned the penal system) I could not help being amazed that Brown rebutted a challenge over early releases, with a boast of higher prison numbers. I suppose if UK judges success by America rather than Norway - it is so.

Thanks again.

#34

Humans definitely have far less awareness of the consequences of their actions than they give themseves credit for. We are far too easily impressed by glib confidence at the expense of sound evidence.


I very much agree with this statement Jean.