Archive for the ‘Bank’ Tag

Swiss Cheesy Smile

On sooner had Barack Obama and Gordon Brown said they would work to end the shadow banking system then many of the countries that have profited from hiding money from the tax man or providing a home for ill-gotten gains started to change their ways. Their commitment to be more open has less conviction than a cheesy smile. The Swiss said it will abide by international banking rules on data sharing but would only respond to “concrete and justified” requests. Seems like a statement to ensure those with something to hide can be assured of a warm welcome.

Switzerland has always been proud of its neutrality and well organised society. However there is a darker side to the country. Over the years it has provided succour to corrupt politicians and criminal gangs by ensuring their banking services remain anonymous. There have been some moves in the past to cooperate with investigations into illegal deposits but progress has been slow. Its a bit ironic that it has taken a downturn in the world’s economies to get the country to change. Perhaps their banks are suffering as well and the villains are having a hard time.

Money can supposedly buy you anything, in particular it can buy you the ability to avoid paying your way in the world by reducing or avoiding any tax commitments. Its one of the big injustices in Britain that those who pay the largest proportion of their income as tax are those with the least to loose. Many big corporations make large profits but organise their enterprises to ensure the profits only arise in those countries with the most favourable tax regimes. Its time the Government also tackled this equally unjust situation.

Money But No Strings Please

Catching up with the news of the Government’s increased stake in Lloyds TSB, I was astounded to read that the bank’s bosses were concerned at the planned level of political involvement in the bank’s activities. As a first step they have been instructed to help the country by providing £28 billion of extra mortgage and business lending over the next two years. It would seem to be a quite reasonable request in view of the level of commitment the Government has made to the bank.

The banks bosses apparently expressed the view that only they know how to run the bank and the politicians and Treasury should keep their noses out. What a bunch of plonkers. Err, who decided to buy a bankrupted bank in the first place. If they had done their due diligence properly in the first place, they would not have been bounced into a deal that has dragged them down such a long way.

At the time it was probably more about their egos than objective business decisions. Flattered at the approach from the PM they lost focus and basked in the limelight. Having now realised the mess they are in, they want the Government’s cash but not Government involvement. It would seem they still have not learnt their lesson.

Money Money Money Debt Debt Debt

I’ve just acquired a new credit card, one that does not charge for foreign transactions. When I applied I was expecting a tough time getting one and if successful the credit limit would not get into four figures. Well it was extremely easy to acquire and the credit limit is mind blowing. I’m not a high powered executive, in fact I don’t work. My pension income is sufficient for our needs but not huge. So why has the bank decided I’m a good risk and provided the opportunity to sink into a significant level of debt? Am I living in a different world?

When the world has borrowed its self into financial nightmare I would have thought there would be a degree of restraint. We hear of businesses being unable to get credit and facing closure, house buyers unable to get mortgages and the rate of borrowing being the lowest on record. Such restraint does not seem to have effected the personal finance market. Giving someone the easy opportunity to get into a not insignificant debt would seem irresponsible, unless the bank is working on the basis that as a home owner if the worst happens they will get their money even if the card holder ends up with nothing.

Individuals must take responsibility for their own finances and should not put the blame on everyone else for their difficulties. But banks should also play their part and not provide the means by which individuals can be the makers of their own downfall.

Sorry Would Be A Start

In 2003 Ruth Lea, the then Head of Policy at the Institute of Directors roundly defended way senior executives are being giver ever greater rewards when the companies they managed were seeing profits fall. The case she presented in support of the obscene payments being made was quite simple. ‘You cannot blame the directors for the down turn in the world markets and as the falling profits are not their fault why should they suffer’.

Six years later and the tide has turned, particularly for the finance industry. Having seen their investments drop like a stone and interest rates fall to almost zero the public’s outrage at the bankers bonuses is not surprising. Also back in 2003 Patricia Hewitt talked about changing the law is such a way that board rooms would be rid of the mutual back slapping and wallet filling. Well nothing has happened in the intervening years, probably because the chances of legislating on bonuses is nil.

MPs are very good at jumping on the wave of public opinion but useless at doing anything that would make a real and lasting change for the better. They are even worst at admitting their involvement in the causes of our current problems and would never dream of apologising. Gordon Brown is typical of the don’t blame me culture that has well and truly invaded the board rooms.

Fair Pay

Perhaps the Government should start by setting an example to the ex-boss of RBS by giving up some of their financial rewards having presided over, and contributed to, the county’s current woes and a national debt that equates to over £33,000 for every person in the country.

Lets start with those over generous pensions. It only takes 25 years at 6% contributions to get a pension of half pay. If you contribute at 10% its only 20 years to half pay. It must be one of the best pension deals around.

And how about those poorly regulated expenses claims. No receipt is required for items under £250 and the range of items which can be claimed is extensive. The average expenses claim is more than twice a MP’s salary and the total for the whole of Parliment is almost £100,000,000.

Asking the bank bosses to give up some of their cash seems rather two-faced in view of how MPs have taken to the money grabbing culture. Just look at the official guidance below to see what’s on offer to MPs. You might just think it worth having a go at the next general election.

The Green Book [Guidance to Members on Fees and Allowances produced by the House of Commons’ Department of Finance and Administration]