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“Ill Founded and Misconceived” versus 47 Years In jail. Updated #HBOS Reading

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I am adding this update to the blog I wrote last February and just after Lynden Scourfield and five others were sent to jail. That was over six months ago.

I was fairly optimistic throughout March and April that the Bank were going to do the right thing and swiftly even although I should have realised at our meeting with the Bank in March, the quest for justice and compensation from the Bank was going to be a long haul.  At that meeting the Bank’s representative expected us (Paul and I) to accept the statement “it is a fact that prior to the trial the Bank had no evidence of criminality.” He said this (and repeated it several times) to the people who have been sending evidence of criminality to the senior management of LBG and their lawyers since the merger with HBOS happened. So the statement was clearly a blatant example of “false truth” or whatever the latest fashionable definition is for “a lie” and it was never going to wash with us. You can’t rewrite history just the same as you can’t lie to yourself even if your bosses can insist you lie to others.

The latest hiccups include: the Bank are not (contrary to their reports to the media) prepared to pay the ‘reasonable’ costs for the victims lawyers/advisers unless they give the Bank chapter and verse on what they are doing for their clients. As if??? As if the advisers will tell the Bank the private and confidential details of the work they’re doing with the victims. Then, if the Bank’s faceless panel make an unacceptable offer of compensation and the victim has to litigate, the bank already have all their information supplied by the advisers. Do the Banks lawyers really think we are all that stupid? And of course the more obvious point – if the bank won’t pay the lawyers/advisers for the victims and the victims can’t pay them, the victims could end up with no legal advice vs the Banks magic circle lawyers.

Another hiccup: some victims who didn’t have dealings directly with Scourfield of Dobson but were in any event destroyed by their lieutenants,  acting on Scourfield /Dobson’s orders, have been told by the Bank they are not considered as victims. The criteria is you have to have dealt directly with Scourfield, Dobson or Quayside. But believe me, some of those working for Scourfield really enjoyed their jobs and were every bit as ruthless and criminal as he was – but they didn’t get arrested. Maybe they will one day but in the mean time I hope the Bank stop the absurd pretence that victims of Scourfield/Dobson teams did not suffer.

Some might say optimism is an ill advised trait in this day and age.  Nevertheless I still think Lloyds will ultimately do the right thing – the question is when? They didn’t meet their target of 30th June to compensate the victims and I wonder if we or the media should have asked Mr Horta Osorio whether he actually meant the deadline of 30th June was June 2017 or 2018? But they will have to do the right thing sooner or later because the alternative would cast serious doubt on whether the Bank’s Chairman and CEO are ‘fit and proper people’ to be running a Bank.

At the end of the day, the Bank’s lawyers can plot all they like to delay or decrease the compensation thus increasing their own remuneration. But the blame for prolonging the misery of people who have already suffered unnecessarily for so many years (it was unnecessary because both HBOS and LBG were fully aware of the criminality years ago) will not be laid at the door of the lawyers –  the blame will go to Lord Blackwell and Antonio Horta-Osorio.  I hope their lawyers are not trying to persuade them that won’t happen because that would be another false truth and potentially a very costly one.

24th July 2017

 

What a week!

As many people reading this will know, on Thursday 2nd February the Judge in the HBOS Reading trial sentenced the five delusional Defendants who pleaded not guilty and the one Defendant who did plead guilty, to a total of 47 years in jail. I was in Court for some of the proceedings and I know many people who couldn’t attend will want to know how it went.

Paul and I didn’t get to Court until about 11.45. Partly because we had the BBC at our house by 6.30am to do Breakfast TV, which was quite an odd experience because we generally get interviewed by people who know a lot about the HBOS Reading fraud. So I kind of felt we and Steff McGovern were talking about different stories and I hope we have a chance to go back and explain it to Steff in more detail so we’re on the same page!

By the time we got to Court it was packed. So packed all you could do was stand by the door at the back of the Court. A lot of press were there as well as a lot of the victims and they were doing the mitigation pleas when we arrived. I went in and listened for 20 minutes and then had to leave. I had to leave because one Defendant’s QC was talking about the hardship it would cause his Client’s family should he be incarcerated! Another pointed out his client was over 60 and in ill health!!!

I always think anger is a dish served silently and after reflection but I wasn’t sure how much longer I could stay silent or reflective in light of these comments. The families of scores of people including mine, have been devastated for years because of these people. Many of the victims have been serving a prison sentence for years and so have their children. We’ve had businesses trashed, no livelihood, no way forward because this has taken so long to reach a criminal conviction and we’ve been living on the breadline. On top of that our reputations, our credit ratings and our dignity has been smashed (yes Nigel, I pinched that from your excellent piece on BBC News at 10!).

Meanwhile, some of the people in the dock have been living like kings and indulging in every possible luxury (not always the luxuries that are to everyone’s taste) on the back of what they stole from SMEs. I say ‘some people’ because there were various degrees of ability or desire to indulge and these have been reflected in the Judge’s excellent summing up and sentencing.

On the subject of not being sent down because someone is 60 and in ill health – I am now 61, my husband is now 65 and we would consider our health to have been destroyed except for the fact other victims have fared far worse – at least five victims are dead!

I decided not to listen any more and I joined Paul in the corridor. I’ve done my best to keep Paul out of the Court room since September 2016. As many of the SME Alliance members will know, he has a photographic memory and I believe he would have been severely agitated to hear some of the evidence from both sides of the case.

We weren’t sure if the sentences would actually happen in the afternoon but fortunately they did. Again I could only squeeze into the back of the room because it was overcrowded. It was also incredibly hot and I began to wonder if people might start to feint from the heat and stuffiness – and the tension.

All through this trial it has been incredibly difficult to hear what is being said and Thursday last week was no different. People coughing, blowing their noses, turning pages of note pads (I was horribly guilty of that), people shuffling in their chairs and the Judge talking very quietly because of appalling acoustics – it’s been a nightmare. But everyone was doing their best to be quiet and hear what the Judge was saying. I don’t have to repeat what he said because it is documented, has been repeatedly reported on and is on the SME Alliance Public Interest page. But you had to be there or maybe you had to attend the entire trial, to get the impact of the Judge’s speech.

More than the sentences the Defendants’ got, I was grateful for that speech. He really got it – he really knew who these people were. The greedy ones, the stupid ones and the evil ones. Judge Beddoe knew exactly who was who in this trial and what their role was or what their importance was. This was so important. A Judge, any Judge, has to remain impartial throughout a trial and although all the way through the trial Judge Beddoe repeatedly picked up on things others in the Court missed, he was always impartial. But clearly he knew who he was dealing with and his speech before sentencing made that very clear. I and others have noted throughout the trial, Judge Beddoe is an exceptionally intelligent man and we were lucky he took this case. I am pretty sure he, like Paul, has a photographic memory – thank God.

Even in the middle of the chaos all around and with people cheering in the Court at the result, I genuinely felt for the first time that all the hard work Paul and I have put into this for 10 years, has been worth it. Not because these Defendants who, let’s face it, are either damaged, delusional or sad people, have been sent down for so long – in lots of ways I think losing their assets, their reputations and their livelihoods (like their victims) would have been almost as damaging as prison – but because I can now start to believe after all this time, perhaps our justice system can work.

I know all the victims of HBOS Reading will be grateful to the Judge, the Jury (they were brilliant), Brian O’Neil QC (Brilliant) with his team and Thames Valley Police (especially Mick Murphy) and, as you can imagine, it was a fairly emotional moment when the Judge read out 15 years for Mills, 11 years 3 months for Scourfield, 10 years for Bancroft, 4 years 6 months for Dobson and 3 years 6 months for Mrs Mills and Cartwright. I imagine it was even more emotional for them.

It would be wrong to focus on the downside after such a result but sadly there is one. We, the victims, won a battle last Thursday, definitely the biggest one we’ve fought so far – keeping that trial on track and getting the result (Paul and I have had to win 22 court battles over the last ten years to keep our house). But we haven’t won the war. HBOS have known about this fraud since 2006. Lloyds TSB have known about it since at least 2007 while Lloyds Banking Group (LBG) have known about it and certainly at a very high level, after the merger with HBOS in 2009. Peter Cummings, Andy Hornby, Lord Stevenson, Sir Victor Blank, Eric Daniels, Sir Win Bischoff and Antonio Horta Osorio. They have persecuted us and other victims for years in the knowledge every allegation we have made was correct. Why? How? How could this have happened? And even now when six people have been sent to jail for over 47 years, LBG are still putting out bland obfuscation as soundbites instead of doing the right thing. What will the latest Chairman of Lloyds Banking Group, Lord Blackwell, do now?

What will Andrew Bailey, the CEO of the FCA, do now?

HBOS could have resolved this years ago – so could LBG. It would have cost peanuts compared to what it will cost after the criminal trial. There must be a reason the Banks didn’t do the right thing? Is all this denial just hubris? Or is this because the management feel obliged to continue with their denials in order to stop an even bigger scandal coming out?

I’ve called this blog “Ill-founded and Misconceived” because that’s what the Deputy Chairman of Denton Wilde Sapte said about our irrefutable evidence back in 2008. He wrote this in a letter to us on behalf of the Board of HBOS and after HBOS had done various investigations establishing the facts as documented in the criminal proceedings. I think the ex Board members may well regret leaving the letter writing to Mr McAlpine.

One last thing – much as I think he was always fighting a losing battle and he lost, I was very impressed by Mills’ Barrister Kieran Vaughn QC. So that’s two names for the record – Brian O’Neill QC and Kieran Vaughn QC – just saying.

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When justice is delayed too long the Devil is dancing.

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It’s very hard to write a rational, unemotional blog about the state of our financial system when I’ve just been to see a friend, who is a victim of bank fraud, who has been waiting for justice for over 10 years, and who is now dying of terminal cancer. But I’m going to try because too many people now are dying without ever seeing justice done. Perhaps just as bad, those they leave behind see little benefit to justice in the future because no amount of money or even bankers being jailed, can never bring back someone you love. There are some things money can’t buy.

I should add straight away that I’m not saying a bank caused my friend’s cancer – it didn’t. But years of stress, anguish, eviction hearings and trying to make ends meet will not have helped the situation. I’m not a doctor but it seems logical to me that the energy and willpower you need to try and fight of an evil disease like cancer and which should be your primary concern, is not aided when you have bailiffs at the door and a banks top lawyers trying to grind your chances of justice into the ground with legal technicalities and the ever promoted ‘costs’ threat.

That is a reality. When victims of bank misconduct are put with their backs against the wall, no one in authority says “hang on a minute, there’s a reason they can’t pay their Council tax or their bills”, they just go for the throat – which is why we have obscene programmes like ‘Can’t Pay We’ll Take It Away.” Bankers on the other hand, faced with serious allegations that may see them facing fines or, God forbid, criminal charges, can rely on their fail safe – money. Shareholders money (in some cases tax payers money) to bail them out of difficult situations.

It’s only a month since the wife of one of the SME Alliance members died of a heart attack – and in that case I suspect the conduct of a bank was the root cause. When that happened it reminded me of an article I found years ago which was written as a result of research by Cambridge University academics, entitled “Can a Bank Crisis Break Your Heart?”: http://www.cam.ac.uk/news/can-a-bank-crisis-break-your-heart

Obviously a bank crisis and I would add bank policy, can break your heart but business, economic climate and political policy doesn’t seem very interested in the human cost of unethical or even criminal bankers conduct. I say bankers because, as always, I would remind everyone that despite legal terminology, a ‘bank’ is the sum of the people who run it. So I’m feeling pretty heart broken even although I’m not the person dying. Neither am I going to be the person most affected by living without my friend. Her husband and children are and even her parents (who can bear the thought of burying their child?).

Anyway, all this has just hammered me. I’ve found it hard to function in the last few days thinking my friend has a couple of weeks to live and there is no way I can do anything about it or even guarantee justice will be served when she’s gone.

I know it’s very non PC of me to talk about human tragedy and banking in the same breath – but tough. It’s about time we stopped pussy footing around what is happening. Above all else, I believe that as a society we should not let the interests of economics or globalisation over take our ability or even our wish to be decent human beings. Sadly, some people, whether because they are genuinely socio-paths or whether their terms of employment push them into that position, are losing site of their responsibilities as human beings.

Maybe they just don’t realise the consequences of their actions? Certainly many bankers and regulators seem willing to turn a blind eye to the reality of bad banking conduct – and this cavalier attitude to individuals is, ironically, doing good banking a huge disservice. Whereas it seemed totally unreasonable up until 2008 to suggest bankers were anything other than professional people and an essential part of society, in general the opposite applies now and the collective name for bankers is often derogatory regardless of whether they are perfectly good people or one of the acknowledged egomaniacs who have hit the headlines in recent years. No one bats an eye to “yet another banking scandal.” We have even become immune to them – right up to the moment they affect us personally. Right up to the moment a bank deliberately targets our business or repossesses our house. Right up to the moment we realise there is no defence against this immoral conduct.

I have been fighting for justice since 2007. I thought it would be easy and that, having identified a massive bank fraud, I could write to senior management of the bank concerned and they would be keen to investigate the matter and make sure any victims of the fraud were compensated and the villains persecuted. I couldn’t have been more wrong. Since then successive senior managements have gone out of their way to bury the fraud I identified and even persecute the victims – presumably in the belief attack is the best defence. But why would you attack your own clients for things your own staff did? I don’t know why but I do know at Board level that has been the banks’ preferred choice.

Nine years on I am still waiting for justice – and so is my friend. Except now justice will come too late. When she dies and she knows she will very soon, she will be the sixth victim to have died without seeing justice for this particular bank fraud.

Last summer one of my colleagues at SME Alliance and I went to a meeting with Head Counsel and Head of Litigation for a major bank. When our conversation turned to Private Criminal Prosecutions, the Head of Litigation became quite outraged and he said that we should realise that when we make criminal allegations we are ruining people’s lives. Even now I remain confused by this comment – does he seriously not realise how many lives his bank is ruining? Not just ruining lives but taking lives? Clearly the man was capable of having empathy towards others because he seemed genuinely concerned we would consider criminal proceedings against bankers. So how comes this same bank is notorious for its lack of empathy to its customers? Are they considered as a different species? Is this why the good old personal bank manager had to go – because he did empathise with his clients? Maybe he even liked them so the idea of selling them  ‘products of mass destruction’ would have have been distasteful to him?

In terms of banking reform I believe we are walking backwards. No one is properly regulating banks and no one is stopping the merry-go-round of greed and corruption which remains rife in our financial sector. On the other side of the fence, public anger is not dissipating and when one person dies one hundred people dig their heels in harder and want to see justice done. In the same way you can only beat a dog so many times before it will bite you, you can only break so many hearts before the consequences become equally dire.

I wish the senior management of banks would wake up to this fact. Justice has a way of being done despite all attempts to stop it and that includes the apparently well known judicial phrase “might over right.”

It is fortunate my friend is deeply religious and she has no doubt she will be going to a better place – neither do I doubt it, she is a good and kind person. The one sure thing we know about life is we we all leave it one day and the departure lounge for that journey doesn’t have a first class section or private jets – just a completely level playing field or “right over might.”

Justice delayed is justice denied #HBOS

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I wrote this blog on Tuesday 6th October 2015 but I didn’t post it because I didn’t want to tempt fate. Unfortunately fate is doing it’s own thing right now and my premonition was no more than logic. Dressed up in different clothes but all the same, on 9th October 2015 the HBOS Reading trials were put back to September 2016.

There is nothing in this blog that breaches sub judice. This isn’t about the merits of the case it is only about the conduct of the case and I make no mention of the content of the allegations. I would however point out that 9th October was a very very sad and even catastrophic day for a lot of people – but, as always, that seems fairly immaterial to the situation and, as far as I know, no one considered the victims when the case was moved.

Justice delayed is justice denied (written 6th October 2015).

Six years ago today Paul and I finished writing a report for the FSA on the subject of HBOS Reading. At that point we had already been investigating events originating at HBOS Reading (that’s the PC description) for over two years. Also at that time we were living on the bread line, our business had been trashed, HBOS/Lloyds had already tried to evict us about 17 times (22 times in total) and no one was really interested in our allegations of fraud.

In 2010 Thames Valley Police finally started an investigation and 12 people have been arrested. It took until January 2013 for anyone to be charged and the criminal trials were due to start in January 2015. But in October last year, the victims of HBOS Reading were suddenly told the trials had been delayed for a year. They are now due to start in January 2016 – or are they?

Call me a cynic but the articles in the press yesterday about the Chancellor, George Osborne’s intentions to off load £2BN worth of Lloyds shares with various discounts and incentive schemes thrown into the pot, rang some alarm bells. This bargain basement sale is due to have completed by Spring 2016 and I can’t help but wonder if a major criminal trial about events in Lloyds unruly pup HBOS is really going to persuade the public they want to get involved with Lloyds?

Of course Lloyds don’t need to rely on the antics at HBOS to tarnish their reputation. At SME Alliance we see examples of outrageous and potentially criminal bank conduct every day and while it would seem Lloyds can’t actually hold a candle to RBS, they don’t do so well in the popularity stakes. Lloyds have huge issues to address and plenty of group litigations to look forward to. Do they care? According to Rowan Bosworth-Davies, giving a powerful speech at an SME Alliance meeting yesterday, top bankers consider themselves to be a protected species. I have no doubt he’s right and that’s exactly what they believe.

However, what worries me more than the conduct of bankers is the conduct of politicians and the judiciary.

To be honest, if I was George Osborne I would be absolutely desperate to get rid of all and any shares in RBS or Lloyds – and he clearly is. Apparently RBS are now going to buy back their own shares to help the Government out: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11900014/RBS-could-buy-back-its-own-shares-to-aid-Government-sell-off.html

Meanwhile Lloyds are now going to become the best thing since SID. Fine, and I really wouldn’t care (because I can see why George is doing it, although the ethics of letting RBS buy their own shares with the money they borrowed from the State, does seem something that would have Mr Micawber turning in his grave) except that, in the case of Lloyds, I have a horrible feeling that all those skeletons Mr Horta Osorio wanted dragged out of the cupboard when he took over as boss, are about to be put back in and even bricked up.

HBOS is a delicate subject in anyone’s book and I suspect the forthcoming book ‘Crash Bank Wallop’ by Paul Moore, the HBOS Whistleblower and a good friend, will be considered by some as being as delicate as the trigger on a hand grenade! There’s nothing the authorities can do about that and I dare say Mr Horta Osorio will react in a similar way to David Cameron when Lord Ashcroft’s book about him came out. In the name of dignity he will just try and ignore it. But it will rankle and it will beg the question “why the hell did Lloyds get involved with a basket case bank?”

Then there’s the HBOS report which apparently some MPs are getting a bit tetchy about. As I blogged the other day, we have been warned about the likely redactions. But in my opinion, redactions won’t be enough. I think it’s likely to be delayed again and, if not, the redactions and re-write’s to protect the great and the good (not Hornby, Cummings, Stevenson or Crosby – I don’t think they are a protected species any more) will mean the report has limited value. We may get something in October as we’ve been promised but I’m guessing the full report, when all the Maxwellisation and Re-Maxwellisation has been completed and enough lawyers have made sufficient money to sail off to the Cayman Islands in a beautiful pea green boat, will appear late Spring and after the Lloyds shares have been sold. And on whose orders?

A lot of people will be eager to read Paul’s book and the HBOS report (believe me, the book will be the better read). However, the victims of HBOS Reading are not waiting to read a book. Not even my book which is about HBOS Reading. We are waiting to get our lives back and we’ve waited a very long time. Given the trials are about events that happened between 2002 and 2007, some of us will have been waiting 14 years by the time the trials are over. And the idea (and it is only a suspicion) that the trials will be moved again to fit in with the Lloyds share sale or for any other reason, makes me feel physically sick. Not only because I am tired, I’ve had enough and I want out of the nightmare this has become – but because I am literally terrified at the idea politicians can manipulate the criminal justice system to suit their ends and those of the 1%!

Surprisingly I have a lot of friends who are lawyers, barristers, QCs and even the odd Judge. They are good people and I know many of them care passionately about justice. They are also common sense people and I know many of them have campaigned against the cut in legal aid and the rise in court costs for people who can ill afford to take on gigantic corporate organisations.

SME Alliance relies on the good advice we get from good people in the legal world – some of our members haven’t always had good advice but we are gradually getting together a very good team. When I explain to my friends how often the Reading trials have hit delays and for how long, they are shocked. I’m not sure our new friend Rowan Bosworth-Davies will be shocked if, for what ever reason the HBOS Reading trials are moved to late Spring. I don’t think my good friend Brian Basham will be shocked nor will Paul Moore be shocked.

I won’t be shocked but I will be devastated. If it happens and I genuinely pray we won’t have another delay, it will cause untold pain, misery and unhappiness for a group of people who are already at the end of their wits. And personally, whatever reason is given for another delay, I will find it hard not to think it is to accommodate George Osborne’s sale of the Lloyds shares. And, were that to be the case (although of course that would never be the reason given) that would be a bad day for democracy and for truth and justice because, whatever politicians do and what ever power they have, they should never have the power to interfere with justice.

 

 

 

How much more contempt must society swallow from banks?

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Interesting few weeks – the election of course with the Conservatives winning a majority – who saw that one coming? And, in the process, the Tories appear to have demolished most of the other parties, not to mention some key names in politics. Of course the SNP helped the Tories enormously – the idea of Labour with the SNP running Westminster had a devastating effect. It’s almost as if we collectively had visions of bearded, kilted Scotsmen rampaging all over England intent on rape and pillage, when we still haven’t recovered from the suited and booted Scotsmen who ran the Government and some of the big banks – so that didn’t help poor Ed. And this just goes to show that while we pat ourselves on the back for being a liberal, accommodating, multi cultural society, the truth is we’re every bit as Nationalistic as Germany, France or Italy. And why not? What’s wrong with being fiercely protective of your Country? And while, in this instance, we conveniently forgot Scotland is part of Britain, I think many of us did reasonably feel that is a tenuous situation which a second referendum could change.

Anyway the Conservatives won and that was certainly a relief to big business who were apparently sure Ed Miliband was anti business. But I wonder if anyone in politics could make a difference to the whims and pleasures of major corporations now – and especially our financial sector?

One thing that has been made abundantly clear (again) in the last week with a US Judge handing out multi billion pounds fines to our big banks, is how much more powerful banks are than Governments. If I was trying to explain to an alien what’s been going on over the last twenty years in the ‘Incredible saga between banks and society’ I would say:

“From the late 90’s, bankers decided they could make more money and bigger bonuses by forgoing traditional banking and behaving recklessly, unethically and with gay, greedy abandon until this conduct nearly brought even the wealthiest of nations to their knees by 2008. So Governments bailed the banks out with the monies they collect in taxes to pay for essential services, even although this caused mass austerity for millions of ordinary people. But we never really got to the bottom of the reckless behaviour and we certainly didn’t blame anyone. So bankers realised very quickly they could carry on with that kind of behaviour and nothing much would happen.

Pardon? Yes we do have laws on this planet and yes bankers did break them but the leaders running the various countries on behalf of the people, decided it wouldn’t be a good idea to apply the laws to the bankers? Why – well apparently it’s complicated (or so we’re told) and, aside from anything else, we, the public, would have felt loath to trust a financial sector where some of the bosses turned out to be convicted felons.

Yes I know some of them may well be ‘criminals in pinstripe’ but that’s not the point. You can’t just go around calling people crooks if our justice system hasn’t confirmed it – so the trick is, don’t prosecute people and then no one can say they’ve done anything criminal.

What happened next? Well obviously, realising they had immunity from the law and could therefore do what the f*ck they liked with no personal consequence, the bankers dreamt up even more blatantly criminal scams to make money because – what did they have to lose? And when they (banks – not bankers) were found guilty of crimes, either their share holders or the tax payer (again) paid massive fines on behalf of the banks to the organisations set up to make sure banks did behave well and didn’t break any laws in the first place.

No I don’t know why these organisations didn’t police the banks properly. But I suppose if they had, they wouldn’t have been able to demand billions of pounds in fines at a later date.

What happened to the bosses running the banks? Well obviously they got huge bonuses even although they were overseeing criminal operations. And let’s be logical – the banks may have been fined billions of pounds but that’s a fraction of the profit they made while acting illegally. So you could say these bosses were doing a good job in terms of making money – which is all banks care about.

Yes, you’ve summed that up beautifully – the people bailed the banks out when they lost everyone’s money; then the banks carried on robbing the countries blind while paying their executives millions of pounds and finally; the public paid the fines for their criminal conduct. It’s a total Catch 22 as far as society is concerned.

I realise it makes no sense to you – it makes no sense to most people on the planet. Don’t we have a say in all this you ask? Well yes we do. We vote for the kind of leadership we think will be best for society and who will stop this kind of thing. So why doesn’t it stop? I don’t know. And yes, I’d say society is deeply offended our elected representatives have given bankers immunity from the laws of the land. Many of us are trying to do something about it. I have written many a letter to various leaders asking for a logical explanation to what’s going on http://www.ianfraser.org/dear-mr-cameron-if-bankers-are-above-the-law-we-need-an-urgent-explanation/

I haven’t had any replies – no doubt our leaders are very busy trying to work out how to balance the scales of a disappointed and furious populace on the one hand and the all powerful and Government empowered banks on the other hand. It can’t be easy forecasting which camp will do the most damage if not appeased. Especially if there’s not much you can do about the situation.

And no, I don’t know how much more contempt society can swallow before it all turns very nasty.

What, you’re off to find a more logical, ethical planet for your holiday? I don’t blame you. At least you managed to catch the Eurovision Song Contest while you were here. Do you know, that used to be considered one of the most bizarre, hilarious and illogical things on the planet? Now it seems like a welcome break in an even more bizarre reality.”

Apathy International. Does anyone really expect HSBC or wealthy tax evaders to be prosecuted?

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I had an interesting conversation on twitter last night with someone I don’t know from Canada – although I think he is British. The very topical subject was “why are wealthy people guilty of tax evasion not prosecuted?” And right from the start of the conversation my twitter friend, let’s call him Bill, made the point that in his view it would cost so much money and take so much time to prosecute them all, it would be counter productive. The cost would be more than the gain.

Bill is probably right. Tracking down the thousands of people identified by the Swiss Whistle blower (and let’s face it, as he says, his list is the tip of the iceberg) would cost a fortune and would probably result in very lengthy criminal trials where the only beneficiaries would be the lawyers. And Bill compared the situation to the gun amnesty used in the US. Hand in your unlicensed gun and we’ll say no more about it. Here the equivalent would be throw the tax man a few thousand pounds voluntarily and we’ll call it a day. I say a few thousand because, in the same way it wouldn’t be cost effective to prosecute these people, I can’t imagine HMRC have the manpower or even the will to do full on investigations into how much is actually owed?

My point was (and is) even considering the logistics of this situation, how can a democratic country ditch the law in the case of one section of society because it’s not cost effective to enforce law? Tax evasion is against the law and nowhere does it say “unless you are part of a rich minority who has been advised by your bank to shunt your money offshore.”

I also made the point HMRC will go through hell and high water to prosecute so called benefit cheats or even people on low incomes who may have been overpaid and then can’t pay it back. Similarly SMEs will be hounded for perceived VAT or tax issues and, if the man in the street doesn’t get all his tax returns in precisely on time and to their satisfaction, HMRC will be very efficient in sending out demands for what they calculate is owed or hefty fines. They also have no compunction about prosecuting for a few hundred pounds if they feel it is due. And that happens to thousands of people.

Bill made the point it doesn’t make any difference whether you cheat the tax man of £50.00 or £5M – it’s still against the law. I agree. So why do I have this horrible feeling you are less likely to be penalised for the £5M than the £50? And the same seems to be true of money laundering or other economic crimes. Big banks money laundering for drug cartels just get hefty fines paid by their shareholders but no one goes to jail. Here’s an extract from my book about HBOS (to be published in the dim and distant future) on these criminal but curiously acceptable transactions:

“And by the way, how does that happen? It’s common knowledge now that certain banks have done these totally illegal deals and, yet again, no one in any bank is to blame and instead, the shareholders have paid massive fines as a penalty for bankers conduct. But if no one’s to blame, how do the deals get done? Do the bosses of the drug cartels phone a special ‘money laundering’ call centre and listen to an anonymous voice giving various options: “Please dial 1 for drug deals, 2 for arms deals or 3 for off shore tax evasion. To hear these options again, please dial 4.” Or do the Banks have departments which deal specifically with these ‘dodgy transactions’ and where the staff work in the secure knowledge no one will ever go to jail for criminal deals because bankers are above the law?”

Then there’s other proven fraudulent products like IRHP – another fine. Out and out asset theft from SMEs – another fine. PPI, EFG, SFLG, it’s becoming like a game show – think of an acronym and the contestants get to guess the appropriate meaning and the applicable fine. Winner gets two weeks in the Caymen Islands all expenses (and of course taxes) paid by the FCA. But if you or I were to commit any deliberately fraudulent act to turn a quick profit, you could expect and get the full force of the law to come into force.

However, taxes and financial crime aside, what really disturbed me about my twitter conversation which, by the way, I thoroughly enjoyed because I love a good debate, was the apathy involved. While Bill agreed with me we shouldn’t have a two tier justice system, his very logical approach was, as Tony Soprano would say, wattayagonnado? We are where we are and there’s little we can do about it – apparently.

I am pretty sure the members of SME Alliance would not agree. Most of them (me included) have been victims of the many and varied banking scams which have devastated SMEs. Most of us have been fighting for justice for what seems like a lifetime and sometimes pretty much is and we are, putting it politely, extremely angry at the way banks, who have caused us so much damage, are never penalised except with shareholders fines. Neither are they obliged by the regulators to repair the damage done. So when we hear about people with very healthy off shore bank accounts, organised by their bank, becoming immune from prosecution, we are anything but apathetic, we’re furious. It’s another slap in the face of the British justice system and another reason we are losing faith in it.

But, being honest, I think back to my life before the consequences of fraudulent bankers and their associates kicked in – was I even aware of our two tier justice system? Admittedly inequality has got worse since the so called credit crunch but, if my business hadn’t been sabotaged and had instead fulfilled its full potential and made millions of pounds, would I be seriously concerned about the conduct of the likes of HSBC and its tax dodging clients? Would I be calling for prosecutions? Or would I be taking the rather detached and very logical approach Bill takes?

We have a saying in our house, “you can’t not know what you do know.” And that’s a shame because the things I now know after 7 years of investigating bank fraud and social injustice, very often stop me sleeping at night. I didn’t sleep much last night thinking it’s possible a massive segment of society may be so oblivious to what is happening to democracy or, more likely, just trying to get on with their own reduced circumstances in austerity Britain, they don’t even care about off shore accounts in Switzerland or Monaco. But I think (or should I say I hope) I would have been aware, albeit to a lesser degree, of the increasing dangers our democracy faces even if I hadn’t experienced the consequences personally. I’m a lyricist and a poet and I grew up listening to Bob Dylan and Joan Baez – so the spirit of protest has always been there. But who knows? As long as the comfortable remain comfortable, will they rock the boat? Hmmn. While apathy is, on the one hand a powerful tool for the State, it’s also a powerful tool for the individual conscience.

“If there is nothing I can do about injustice, no one can blame me for doing nothing.” It’s a scary concept but one that has helped permit every shameful human catastrophe.

Anyway, I don’t know what the resolution is to the HSBC tax evaders or the many other tax evaders who were no doubt advised by other banks. Quite frankly, I think those banks must be bricking it in case their own whistle blowers come forward. I agree with Bill, it is impractical to think HMRC can or will prosecute all of these people. But, and remembering this year sees the 800th birthday of the Magna Carta, if we are truly a democratic society, I cannot see how Government, or the appropriate authority, cannot prosecuted them? After all, one person has been prosecuted and surely that has set the precedent? And what was so special about that case? Seems a bit harsh – thousands do it but only one pays the price.

I wouldn’t like to be running this Country. Whatever good intentions any of our politicians have, there seems to be an endless barrage of obstacles in the way of good governance and most of those involve the necessity to compromise and close their eyes to the kind of corruption that is swamping the Country. Hard, I imagine, not to just go with the flow for the 5 years they are in power. And hardest for those in power as opposed to those in opposition where it’s easy to shout foul (especially if you have a short memory)!

If anyone thinks they have the answer to the current problem – is it possible to prosecute every criminal act in the financial system and the associated activities like tax evasion, I’d be happy to hear it and I’m sure many politicians would as well. If we did take this route, we’d have to build a lot more prisons because financial crime, without doubt, is more epidemic or contagious than the flu and we have no jab for it. We seem to have no cure for corruption.

I leave you with a poem I wrote in 2003. I rarely inflict poetry on my blog readers but this one seems entirely appropriate.

Apathy International

I am a member of

Apathy International.

I am working my way up in the company

and should shortly become

a bored member.

Membership was free

and just slipped onto my shoulders

during a raging storm,

like a comfortable old raincoat.

The effects are almost unnoticeable

as is everything else now.

And, as in all such large organisations,

only non members receive active attention,

so I fully expect to disappear completely and painlessly any day now.

(Which I really can’t worry about).

But late at night I wake up

terrified

as a distant but unfiltered image of raw gaping wounds stabs me

and I can hear the hideous cackle of the devil’s favourite shareholders

and I recognise the voice of our beloved CEO crooning

and I think I will implode with panic.

But in the grey reasoned morning light

I think –

what could I do? Nothing.

So I don’t –

except to gently fondle my membership badge.

© Nikki Turner 2003

Bank of England Minutes v The Bank of England Plenderlieth Report

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Just a very quick blog – mostly a copy paste job because I am very confused by the Bank of England Minutes 07-09 which were published today. I have to admit I have not read the entire document but, as of September 2007 I am surprised the minutes did not contain masses of detail and concern about HBOS (Fox) or Lloyds (Lark).

Here’s why:

In October 2012 the Bank of England presented the Plenderleith Report to the Court. I went through this report with a fine tooth comb because of some work I was doing with Paul Moore. And I came to the conclusion that, even although it did little good to the economy, the Bank of England, albeit frustrated by a lack of data from the FSA, was closely monitoring HBOS by September 2007.

I have very quickly I have taken out the salient points which highlight this position:

Executive Summary
8.
In relation to the specific vulnerabilities of the two banks to which the Bank eventually
extended ELA, the Bank was able to identify in advance, and to monitor, the increasing
liquidity strains thatHBOS was experiencing during 2008. There was significantly less close
focus on the liquidity position of RBS, but its funding problems did not in fact crystallise untila late stage, after the failure of Lehman Brothers.
9.
In relation to both banks, however,and indeed to the process of monitoring the risks to
individual banks in general, the Bank’s ability to identify impending threats in concrete terms was made more difficult by an underlap that had developed in the regulatory structure.Initially at any rate, the Bank was dependant on the FSA for liquidity data on individual banks; but the data available to the FSA were not forward looking and
lacked the granular detail the Bank required for an operational response like ELA. Equally, while the Bank could identify the threat that vulnerabilities in individual banks posed to wider systemic stability, the FSA was less closely focused on the deteriorating systemic picture. Under the pressure of events, this underlap was progressively bridged during the course of 2008, but it hampered how far in advance the Bank could get a clear view of the strains building up on individual banks.
10.
Since the funding difficulties being experienced by HBOS were identified at an early stage,
well in advance of its need for ELA crystallising in October 2008, the Review suggests that,
where there is advance awareness of such strains, the Bank might consider acting pre
emptively to provide bilateral liquidity support before the need becomes immediate.

 

And here is the main chapter on HBOS:

How aware was the Bank of the particular vulnerabilities of the two banks to which

it eventually extended ELA?
The case of HBOS
98.
As noted above, the run on Northern Rock marked a step-change in the level of the Bank’s
engagement with individual banks and it is clear that the Bank, and indeed the other
members of the Tripartite, were fully aware of the vulnerabilities of HBOS prior to its need
for ELA in October 2008. By September 2007 the Bank was receiving what it felt were more
appropriate data from the FSA, at any rate on banks identified as more vulnerable, including
daily liquidity reports from the FSA on HBOS (as well as on Alliance & Leicester and Bradford
& Bingley).
99.
Work undertaken within the Bank in November 2007 identified a number of key risks that
meant that HBOS was likely to be particularly vulnerable to a change in market sentiment.
These included: the risk of reputational contagion from association with other mortgage
banks, given that HBOS was the UK’s largest mortgage bank; HBOS’s reliance on wholesale
funding at around 50% oftotal funding, and within that its reliance on securitisation as a
source of funding; and its commercial property exposures. At that stage, HBOS was
nonetheless viewed as being somewhat less vulnerable than Alliance & Leicester and
Bradford & Bingley because of its more diversified business model.
100.
The increased focus on individual banks and improved data flow from the FSA was not just
confined to HBOS, Alliance & Leicester and Bradford & Bingley. From September 2007, the
Bank began to receive liquidity information on other major UK banks from the FSA at least
weekly. The individual banks’ data lacked in several respects the detail the Bank would have
liked, but it was used by the Bank to try to determine which banks would be most affected by
a crystallisation of the possible key risks to the UK banking sector. Iterations of this work
were shared with the Tripartite Standing Committee in October and November 2007.
101.
From late 2007, the Tripartite authorities began contingency planning to map out possible
options for resolving HBOS should the key risks facing it crystallise. There was heightened
monitoring of HBOS from March 2008 after the emergency sale of Bear Stearns on 16 March
and after an unfounded market rumour that HBOS was receiving emergency assistance
from the Bank caused a sharp fall in HBOS’s share price on 19 March. At this stage the Bank was considering in detail the consequences of HBOS, like Northern Rock the previous September,being unable to fund itself in the markets.
102.
By mid-April 2008, although still work in progress, a comprehensive contingency plan had
been prepared by the FSA, in conjunction with HMT and the Bank. This contingency planning
explicitly recognised the possibility of the Bank needing to undertake some form of ELA in
the event of wholesale markets beginning to close to HBOS. Although by May the immediate

threat to HBOS appeared to have receded somewhat, in part because it was able to
utilisethe SLS launched in April, the Bank continued through the summer closely to monitor HBOS’s liquidity strains on a daily basis as HBOS endeavouredto scale back assets and increase deposits in order to reduce its reliance on wholesale funding. In the event, wholesale funding became increasingly difficult as the maturity of funding available to
HBOS shortened progressively increasing the ‘snowball’of funding that had to be rolled at shorter maturities
With the failure of Lehman Brothers on 15 September, HBOS’s position rapidly became
untenable. When it finally needed to seek ELA from the Bank on 1 October, the approach did
not come as a surprise and the Bank was able to respond rapidly.
The full report is here

Click to access cr1plenderleith.pdf

This report suggests the BoE and the Tripartauthority were fully or at least partially prepared for the Crisis. I could be wrong but the reports on the minutes seem to infer this wasn’t the case.

 

Christmas 2014 round up of financial crimes with no one going to jail.

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My husband made a very valid point a few days ago and I have been thinking about it every day since. He pointed out that when we (Paul and I) started looking at misconduct in the financial industry and specifically HBOS, we couldn’t get anyone to take our allegations seriously because no one believed us. That was in 2007 and it took until late 2009 to actually get the FSA involved and 2010 before the police got involved – even although we made allegations to the police in November 2007. We’re not a lot further forward now in December 2014 because the criminal trials for that alleged crime won’t start until September 2015 – and even then, I’m not holding my breath.

It was disappointing no one believed us in 2007 but not surprising because the idea banks, or rather bankers, might be crooks, was out of the question back then. Bankers were seen as respectable professionals and your bank manager was so trustworthy, he or she could even sign your passport. The same doesn’t apply now and no one bats an eyelid at the concept of crooked bankers – in fact bad conduct is what we expect from them, to the point even the good guys (yes I do acknowledge there are still many good bankers our there) are tarred with the same brush.

Paul’s point was simple: It was tough back in 2007 because no one believed us, so nothing was done. Now, everyone knows the financial sector is rife with fraud and corruption and still nothing has been done! Not just in the case we reported – right across the board and in thousands of cases. Even more alarming is the fact that, in many instances I know of, where people have tried to report financial crime, the police will not investigate it! In all probability this is because they don’t have the budgets to investigate such a glut of criminality in austerity Britain – but that is of no help to the victims who are frequently told – “it’s a civil matter.” No it’s not – crime is never a ‘civil matter’ and even victims of PPI have a right to report it as a crime, get a crime number and, if applicable, also have it investigated. Of course that might damage crime statistics.

But no. Most financial crime is just swept under the carpet as “mis-selling” or “restructuring” and resolved by bank shareholders’ paying huge fines to the FCA. Think about that for a moment – we all believe bankers have committed criminal acts but nothing has happened. It just beggars belief and is really as scary as hell because, what it actually means is, we can no longer rely on the Law and really do have a two tier criminal justice system. There isn’t another, plausible explanation.

This terrifying thought was brought home again when I read the latest excellent Matt Taibbi article in Rolling Stone magazine: http://www.rollingstone.com/politics/news/the-police-in-america-are-becoming-illegitimate-20141205 where he is talking about the disparities in the US legal system and it reminded me that I still haven’t had a reply to my letter to Mr Cameron of December 2012 when I asked for some clarification about the apparent immunity bankers have from prosecution. In that letter, which I wrote after reading some worrying comments from Andrew Bailey (now head of the PRA), I said:

“Mr Cameron, unless I am completely mistaken, Mr Bailey seems to be telling us that banks, and therefore bankers, are now officially considered to be above the law in this country and that, in the interests of confidence in the banking industry (which is already at rock bottom among the British public, and therefore can hardly sink any lower), they cannot be prosecuted.

I am writing to ask you, as Prime Minister, for some clarification.

Does your government endorse the notion that banks and bankers should be given a licence to commit criminal acts without any fear of prosecution? Is this now official government policy? Are the British public now being asked to accept that, despite incontrovertible evidence of multiple criminal acts by banks, including money-laundering, drug-money-laundering, Libor rigging, multiple frauds and assorted Ponzi schemes, bankers are considered to be immune from prosecution? And if so, can I ask on what grounds your government, or indeed the government of any democratic country, can justify such a policy?” Full letter here: http://www.ianfraser.org/dear-mr-cameron-if-bankers-are-above-the-law-we-need-an-urgent-explanation/

I didn’t write the letter to be confrontational – although I must admit I am incredibly disappointed the PM’s strong words in the run up to the last election about what should happen to criminal bankers, turned out to be hot air and no more. This is what he said to Jeff Randall in January 2009:

“I think that we need to look at the behaviour of banks and bankers and, where people have behaved inappropriately, that needs to be identified and if anyone has behaved criminally, in my view, there is a role for the criminal law and I don’t understand why is this country the regulatory authorities seem to be doing so little to investigate it, whereas in America they’re doing quite a lot.”

I wrote the letter because I genuinely wanted some reassurance from the Prime Minister that bankers are not above the law; we don’t have a two tier legal system and; something would be done to redress this inequitable situation.

So what has happened to clarify or allay my concerns since December 2012? Well a few things have happened but not what I was expecting. For example:

  1. I’ve never had a reply.

  2. Several banks have been found guilty of money laundering and even money laundering for drug cartels. And the only penalty has been a huge tax on the bank’s shareholders who have paid massive fines for the conduct of bankers. But no one has gone to jail.

*given that banks (buildings or legal entities) don’t have any physical ability to pick up the phone and negotiate with drug cartels – such deals had to be done by bankers. So why have no bankers been held responsible?

  1. Many banks have been found guilty of making billions of pounds with the PPI scam. They’ve had to pay the money back in many cases but, I assure you, not all cases. So again, the shareholders have lost a fortune. But no one has gone to jail.

* I often wonder who invented PPI? Did senior bankers sit down and plan how best to get thousands of their customers to take out insurance policies which cost them a fortune but could never be used? Or did someone in a bank find a recipe for creating and implementing PPI in a fortune cookie?

  1. As a founder member of SME Alliance, I talk every day to people whose businesses have been totally destroyed with various, ridiculously (and I would suggest deliberately) complicated financial products under the collective name of swaps. I’m not a victim of a swap and I know little about them (I’m learning fast) but even their titles smack of more contempt for businesses e.g. vanilla swaps. Can you have chocolate or strawberry? Probably. The FCA have said many of these products should never have been sold to ‘unsophisticated’ clients and in some cases banks have had to give the money back. However, the years it has taken for this to happen and the devastation these products have caused, apparently do not necessitate banks having to pay out billions in compensation. The redress scheme the FCA has come up with has conveniently been limited to peanuts – and no one has gone to jail.

* A journalist was telling me the other day of a case where someone challenged the FCA decision multiple times and was eventually awarded £500k – but of course the bank interest and charges on his account over the time it took to challenge the bank’s conduct meant the victim got nothing and the bank paid themselves £500k. You couldn’t make it up.

  1. The now infamous business recovery units like RBS/GRG have been merrily acquiring, appropriating, stealing their clients’ assets left right and centre and sadly RBS have not been working in isolation. It has caused outrage – it’s been all over the news, MPs have held debates on the subject, Committees have interviewed senior bankers and regulators and even the ever cautious BBC have suggested some bankers are crooks. http://www.bbc.co.uk/programmes/b04t6jy1 But no one has gone to jail.

* As a victim of HBOS Reading (similar model) I have so much to say on this – but am having to keep quiet for now but not forever.

  1. And while the likes of GRG and HBOS Reading have caused many businesses to fail, a separate scandal has specifically targeted farms across the Country for over 20 years. Repeated allegations have been made against a man called Des Phillips and various of the 59 companies he has been or is a director of including UK Farm Finance, UKCC and UK Acorn Finance. And some of our major banks have been heavily implicated in these allegations as have other ‘professionals’. It’s a sickening story which has resulted in many family farms being repossessed and, sadly, farmers committing suicide. You can hear about it here: http://www.bbc.co.uk/programmes/b040hzz5 or read about here: http://www.publications.parliament.uk/pa/cm201415/cmhansrd/cm141111/halltext/141111h0001.htm No one has been prosecuted so no one has gone to jail.

  2. Bankers or traders have been found guilty of rigging LIBOR. Again, massive fines have been levied – another penalty on shareholders. However, in this instance it looks possible some bankers will go to jail and one banker has even pleaded guilty. But let’s not get too excited that justice might be done. Read this: http://www.theguardian.com/business/2014/oct/07/banker-pleads-guilty-libor-rigging-rate-fixing

As you can see the banker concerned could get up to 10 years in jail but we don’t know who he is or what bank he worked for and reporting on this case is heavily restricted. Presumably, after the other three people charged have had their trials, we might know more. But I wouldn’t bet money on it – especially if the banker in question worked for one of the State subsidised banks. But it’s a start.

I could make the list much longer but, to date and looking at the 6 instances above, money laundering, PPI, Swaps, asset theft including farms and LIBOR rigging, it’s certain 1 person in the UK will go to jail and 4 people might. And when you look at the trail of poverty, misery, desperation and devastation these crimes have caused, it is unbelievably disappointing – not to mention scandalous, that our regulators, justice system and worse still, our Government, have let this happen. In fact it is morally and ethically reprehensible.

Of course individual bankers do go to jail quite regularly – they’re usually quite low down in the pecking order and their offences (with a few noticeable exceptions) just about make it into their local newspapers. But the top dogs – the ones who make policy – the ones who instigate and oversee the kind of conduct which allowed all of the above to happen, seem to remain above the law. Which begs the question – why do we have laws?

Meanwhile, the Government have issued the following figures regarding crimes to businesses:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/284818/crime-against-businesses-headlines-2013-pdf.pdf

I haven’t read it in any great detail but I’m pretty sure it doesn’t mention the wholesale destruction of SMEs by banks. I sometimes think we should move the Houses of Parliament to Canary Wharf and have done with it before La La Land spreads across the whole of London.

Here in the real world we are in the run up to what will be another very austere festive season for many people in Britain – and I’m not just talking about people or SMEs who have been defrauded by banks. I’m talking about those families who’ve lost jobs and/or benefits and most of all, those people relying on food banks or who have lost their homes and now live on the street. A lot of people would say – me included – our major banks and therefore our most senior bankers, were very instrumental in causing our national austerity. And, post the so called Credit Crunch, those same banks (especially the part State owned ones) have done little to help the economy and much to damage it further. Unbelievably, the people at the top of those banks continue to be heavily rewarded.

For example, yesterday (13th December) I was reading an article about the top paid European Bank CEO’s. http://www.cityam.com/1415705309/which-ceos-european-bank-have-biggest-pay-checks-two-uk-banks-take-second-and-third-place

Hmmm – £7.4M. Even when you deduct 50% tax, that still leaves approximately £71k a week. I think you could have one hell of a Christmas with that remuneration package!

Mind you, every silver lining has its own cloud and I suddenly thought – I bet it’s really tough finding the perfect Christmas gift for these top bankers because, what do you buy for the man or woman who has everything? So maybe La La Land has its own problems at Christmas.

Shame you can’t gift wrap integrity – if we could give some of them that, the whole Country might feel more festive. Still, there’s always the good old standby gift – Monopoly. After all, banks have bought, sold, packaged and mortgaged every property on the board many, many times over – but, to date, they have been very adept at steering clear of the “Go to Jail” square. But then I’m guessing Al Capone thought he would never lose ‘games’ either.

Following on from yesterday’s Indy article about the HBOS Rights Issue, can we at least stop subsidising fraudulent conduct in banks?

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Tom Harper’s excellent article questioning whether or not investors were given key financial facts regarding the HBOS Rights Issue in 2008, provoked some serious outrage on the ‘Twittersphere’ yesterday – and quite rightly so. http://www.independent.co.uk/news/business/news/hbos-accused-of-misleading-the-public-over-4bn-rescue-9701791.html

I don’t suppose the Government, Lloyds, the Regulator or the BoE will be happy with that line of investigation. Not least because it opens the door to a whole torrent of questions about how many other transactions, involving state subsidised banks, have been less than transparent?

And perhaps the biggest question will be – was the information in the Lloyds/HBOS Merger proposal, as accurate and transparent as it should have been?

I am sure Lloyds bank will say the HBOS Rights Issue was nothing to do with them as it pre-dated the merger. But in order for the Merger Proposal to be correct, it should have contained watertight data about the financial state of HBOS – which, reading Tom’s article, I’m not sure it could have? I’ve looked at the Proposal and it relies on financial accounts for HBOS and Lloyds TSB dating back to 2005 – although conveniently, it only relies on unaudited accounts for HBOS in 2008. Not that it makes much difference because, sadly and to add weight to yesterdays article, the Big 4 auditors appear to have been equally confused as to the solvency of the banks despite the audited accounts, as shown in another excellent article by Ian Fraser, November 2010: http://www.ianfraser.org/connolly-i-do-believe-that-auditors-performed-well/

What I find really upsetting about all this was brought home this morning by an article from the Positive Money site (following up on an article by Jill Treanor in the Guardian). The article dates back to December 2013 and explains, in very clear and simple terms, how banks continue to be subsidised and why. https://www.positivemoney.org/2013/12/uk-banks-benefited-38bn-big-fail-state-subsidy/ And of course, if we are still subsidising the part state owned banks – we are also subsidising bankers’ bonuses – which, considering neither Lloyds nor HBOS have managed to comply with the terms and conditions of the 2008 bailouts, seems entirely unjust not to mention bonkers. In a letter I received from the Treasury dated 15/05/09, Lloyds and HBOS agreed to meet the following terms:

A range of conditions are attached to the recapitalisation package. Lloyds TSB and HBOS have agreed that over the next three years they will maintain the availability and active marketing of competitively priced lending to homeowners and to small businesses at 2007 levels. They will also provide support for schemes to help people struggling with mortgage payments to stay in their homes and the expansion of financial capability initiatives. The remuneration of senior executives will follow strict guidelines – both for 2008 (when the Government expects no cash bonuses to be paid to board members) and for remuneration policy going forward (where incentives schemes will be reviewed and linked to long-term value creation, taking account of risk, and restricting the potential for “rewards for failure”). The Government will also be consulted on the appointment of new independent non-executive directors…”

Joining up all the dots, I begin to get a very clear picture of La La Land and it’s not pretty. As I am definitely a layman in these matters (albeit a fairly well informed one), I thought I’d take this opportunity to share my view of what’s happened over the last few years.

Round up of events in La La Land.

In 2008 and after exceptional spending sprees by both the banks and the public, the proverbial finally hit the fan and many banks ran out of money. The Government, terrified they’d have a repeat of the Northern Rock débâcle, gave the banks billions from the taxpayers’ coffers. As this resulted in mass austerity, the Government were loath to let anyone know exactly how bad a shape some of the banks were in (some were insolvent) and they certainly didn’t want the public to know the exact details of the billions being handed over, so they did their best to keep it all quiet. They (and the banks) even kept it quiet from the people being asked to invest in the banks via rights issues and/or sanction the HBOS-Lloyds merger, although they didn’t have to keep it quiet from institutional investors, because they were ‘in the know’ and had no intention of investing in insolvent banks.

The banks took the money but totally ignored the social responsibility that went with it (terms and conditions) in the same way they ignore little things like money laundering laws or Principle 1 of the FSA Principles of Business: A Firm must conduct its business with integrity. Actually I struggle to see how most banks comply with any of the FCA Principles: http://www.fca.org.uk/static/documents/handbook-releases/high-level-standards136.pdf Section 2.1

However, after the credit crunch the banks could no longer be seen to lend with reckless abandon (which was a bit annoying, as they rather liked basing bonuses on inflated loan books), so they invented other reckless and ingenious ways of making money – e.g crippling the SME sector and stealing assets. Best of all, having totally screwed up and taken everyone’s money, they came up with their most ingenious plan to date – they sold us all the simple concept that – if we didn’t allow bankers to keep taking bonuses, they’d walk away – and then we’d all be screwed. To make sure that dreadful day never comes, we continue to subsidise banks so they all live happily ever after.

That sounds like a pretty dark fairy story and the darkest bit is – it’s not a fairy story. So I hope somewhere, someone in authority (not mentioning any names Mr Tyrie) will have read Tom Harper’s articles, Ian Fraser’s articles and I’m hoping Max Keiser will invite Paul Moore back on the Keiser show to talk about the appalling behaviour of HBOS, Lloyds and other banks. Because, crazy as is it and despite all the rules, laws and regulators we have, I think our best chance of getting banking reform is to report bank misconduct to the media and then spread the word via Twitter? Of course, that could ultimately do enormous damage to some banks but I can see little alternative to this course of action. It’s a huge problem that while we definitely do have regulators, it seems La La land is out of their jurisdiction – which is the obvious reason they cannot do anything to penalise errant bankers.

*Here’s a thought – if we’re going to rely on journalists to clean up the banking world – maybe we should be paying our financial journalists (and their research teams) more and getting rid of regulators? We’d save a fortune and get some results.

Anyway, what upsets me most about all this is how we continue to let ourselves be mugged and my point is: If banks are intent on continuing to cheat their customers, destroy SMEs and refusing to compensate the people they defraud while insisting they still get huge bonuses – fine. It seems there’s little we can do about it. But can we please, please stop subsidising this conduct?

Ming the Merciless v Flash Gordon. What made Britain a ‘State of Anxiety’?

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I very rarely watch films in bed – mostly because the television in my bedroom is ancient and prone to turning itself off half way through a film. Or you get the picture but no sound – very frustrating. However last Monday (Bank Holiday), with both daughters and granddaughter away and as it was bucketing down with rain, I ended up staying in bed to watch Flash Gordon and the TV, in charitable mode, actually worked. I’ve never watched this film all the way through and every now and then, I enjoy watching something deliciously ridiculous. So a pleasant morning.

But my mind always strays whatever film I’m watching and something Ming the Merciless said to Flash, made it stray again. Ming suggested he would like to have Flash on his side and he would give him an entire planet of his own where Flash could rule over everyone, in exchange for his loyalty. The planet was Earth and Ming confirmed he would do such terrible things to the planet prior to handing it over, Flash would not recognise the people on Earth. “You’ll make them slaves” Flash suggests? “Let’s just say they’ll be satisfied with less” Ming replies (that’s from memory, so don’t quote me but you get the gist).

It made me think of the relationship we earthlings have with our so called ‘Masters of the Universe’ in the financial sector. There was a time when we, as the customer, expected and even assumed the people running banks were decent, professional, ethical and even helpful people. Just like the people on the adverts and a bank manager was such a pillar of the establishment, he could even sign your passport. As for the CEO or Chairman of a bank? They were, quite naturally, beyond reproach.

Times have changed radically and, while I don’t suggest the majority of employee’s in the financial sector are intentionally bad people, most of us don’t bat an eyelid now even when we hear how banks (bankers) are laundering money for Mexican drug cartels, manipulating LIBOR or screwing their customers every which way. Worse than that, we seem to have accepted the ridiculous myth no-one is personally to blame for any criminal conduct in the banking world and senior bankers should still get bonuses for running what are, in some cases, organised crime syndicates. How did that happen? When did we accept becoming a banana republic?

One of the things we are possibly all agreed on – and even bankers – is how over extended credit was a major contributory factor to the credit crunch. People with low incomes were encouraged to take on mortgages they couldn’t afford; banks were issuing credit cards like they were ‘Smarties’; businesses were getting massive loans and; even students with no incomes were offered big overdrafts. Of course no one had to accept any of these loans but, in a consumer society where “credit is good for the economy” was the motto of the day and, as the rise in house prices became totally out of sync with what people earned, many people did. And while some of the public pushed themselves to the absolute maximum in the borrowing stakes, the banks, who based their bonus structures on loans, went even further.

Then the crunch came and suddenly the huge and fundamental difference between the people (who the banks had willingly lent money to) and the banks, became horribly transparent. The banks got all or most of the money they lost back from the taxpayer (the people) on the grounds they would re-float the economy – which they didn’t do. Meanwhile the people had no one to bail them out and, almost overnight, this situation was exacerbated when the banks started aggressively demanding back the money they’d lent consumers. It was a double whammy – the credit crunch caused mass austerity on the one hand (cuts in every aspect of public funding except MPs and bankers’ wages) and, on the other hand, not only did future credit dry up, the terms for existing credit were harshly altered – although the terms and conditions which enabled this were always in the small print, tucked away discreetly for a rainy day.

I’m not talking about PPI or LIBOR or IRSA or even major bank frauds here – just how the basic principles of the bank / consumer relationship, changed. The banks, who were so eager to extend credit one day, were demanding it back with menaces the next. And the methods they’ve used over the last 6 years are often akin to those used by the playground bully. Here’s a couple of examples:

Bank of Scotland has been ordered to compensate a customer for harassment after it made an astonishing 547 calls to recover a debt. http://www.moneysavingexpert.com/news/banking/2013/07/bullying-bank-ordered-to-pay-up-for-harassing-customer-know-your-rights

‘You have 24 hours’: Devastating tape reveals how RBS accused of bullying warned struggling chain of chemists it could call in the administrators http://www.thisismoney.co.uk/money/news/article-2516063/Tape-reveals-RBS-warned-chain-chemists-administrators.html#ixzz3BaDHrbWr 

(Sorry – the above link, is temporarily not working)

Every bad thing about banks got horribly worse after the historic events of October 2008 when Gordon (Brown that is, not Flash) and his chums created a completely different pecking order in the country he was supposedly running as a democracy. And sadly, I have to conclude the end result has caused Britain to be a ‘State of Anxiety.’

Fear has always been an efficient if immoral tool to control large numbers of people. People who are frightened tend not to ‘rock the boat.’ Most of us don’t have grandiose ambitions and it’s the idea of losing the simple basics in life we’ve worked hard for, that cause the greatest fear. Therefore, regardless of how bad the game has become, we keep playing it. We don’t worry about getting run over by a bus because we don’t think it will ever happen. We don’t worry a meteorite will smash into earth and we’ll be obliterated because we know there’s nothing we could do about it. But the idea of losing your family home for instance, is a situation that cripples people with fear. I know because I’ve been through 22 eviction hearings. My particular case, or cases, were complicated and I can’t go into detail because of Operation Hornet and sub judice. But whatever the reason anyone is staring eviction in the face, the sickening fear of it becoming a reality, is always the same. It’s debilitating and crushing.

So paying your mortgage to keep your house is a number one priority which means, at all costs, you must keep your job (even if you hate your job because the new corporate order means you are asked to do things you feel are morally unacceptable). Paying that mortgage to the bank is definitely going to keep you playing the game.

But what happens if you lose your job because your employer was one of the thousands of SME owners who have been sent to the wall (administration or liquidation) by the banks who have unethically demanded long term loans be paid back overnight? Or if you worked for an SME that was a creditor of a company forced into administration which has, as a consequence, then hit the wall itself? What happens if, through no fault of your own, there is no job to pay the mortgage?

In those instances it’s an amazingly short scenario to the really basic problem of things like food. Benefits are few and far between these days (cutting those on benefits also cuts the numbers of unemployed). Who would have believed hundreds of thousands of people in Britain would have to rely on food banks? How frightening is it when you have to rely on charity to feed your family? And it happened so quickly – austerity, job losses, benefit cuts and food banks.

I could go on – electricity, travel costs, school fees, health care, old age with inadequate pensions…. what it all adds up to is anxiety and fear for a lot of people. And when people live with fear, just keeping your head above water is a priority. Questioning why you are in that situation becomes a secondary consideration – first you have to survive.

Meanwhile, the masters of the universe most responsible for where we are – what’s happened to them? In the majority of cases they have just continued to receive mega fees, bonuses and pension pots for failing with vigour. Should we feel sorry for the likes of James Crosby, who lost his knighthood and even had to forego a third of his six figure pension pot? I think most people don’t even care. Their own personal angst totally and reasonably excludes the bigger picture. Which is very convenient for those who do their best to make us forget how we got to where we are.

The comments from Ming the Merciless made me think – has the aftermath of the credit crunch brow beaten us all to the point we ‘except less’ and ‘accept the unacceptable’? Is this why we don’t shout and scream when shareholders (including the taxpayer), who’ve already lost a fortune in banks like HBOS, RBS and Lloyds, see millions of pounds being paid in fines for criminal conduct in banks as opposed to holding CEOs and Chairmen to account for what happens on their watch? Is this why we unbelievably seem to accept one law for the masses and one for the elite? Much as I hate the very idea, I think that may well be the case and I even wrote to David Cameron asking for him for some clarification on this point:

Dear Mr Cameron,

I and many other people were stunned by the quotes from the chief executive-designate of the Prudential Regulation Authority, which were reported in the Daily Telegraph yesterday (December 14th, 2012).

Mr Bailey seems to have confirmed that, irrespective of their criminal actions, banks are not only “too big to fail”; they are also “too big to prosecute”. In an interview with the Telegraph, Mr Bailey said that prosecuting banks and by implication their executive and non-executive directors,

“would be a very destabilising issue. It’s another version of too important to fail. Because of the confidence issue with banks, a major criminal indictment, which we haven’t seen and I’m not saying we are going to see… this is not an ordinary criminal indictment.”

Mr Cameron, unless I am completely mistaken, Mr Bailey seems to be telling us that banks, and therefore bankers, are now officially considered to be above the law in this country and that, in the interests of confidence in the banking industry (which is already at rock bottom among the British public, and therefore can hardly sink any lower), they cannot be prosecuted ……..

……..If justice is indeed now a ‘private members’ club’, then it is to up to you, Mr Cameron, to explain this to the British public. And, as I am sure you are aware, there is a real danger that the country will descend into lawlessness if the law is unevenly applied and enforced. If you really intend proceeding down the path seemingly advocated by Mr Bailey, then you risk going down in history as the Prime Minister who did more than any other to undermine the legitimacy of the British state……

http://www.ianfraser.org/dear-mr-cameron-if-bankers-are-above-the-law-we-need-an-urgent-explanation/

I have never had a reply to my letter and the lack of reply speaks volumes.

My point: Has the so called ‘credit crunch’ worked out badly for everyone? Or has it enabled some very sinister aspects of society to come to the forefront and control us all via economic fear? I think that is exactly what’s happened. “He who pays the piper calls the tune.” Here’s the definition of that saying from the Cambridge Dictionaries on line: “said to emphasize that the person who is paying someone to do something can decide how it should be done”

There is no doubt the banks can afford to pay the piper – and how crazy is it our elected representatives gave the banks that money from the public purse? They gave the banks so much money, it seems even Governments can no longer call up a good tune these days.

Of course, in the film (and the comics), Flash Gordon never gives in to the likes of Ming. He risks everything to save the world. I can’t help feeling our modern day equivalents, who endlessly profess to be fighting for the greater good (especially running up to elections), have gone completely off track – and they only ever seem to save the inhabitants of La La land – which is a very small island somewhere between the Cayman Islands and Monte Carlo. Don’t get me wrong – I’m all for capitalism – who doesn’t want to be rich? I lived in a Communist Country for two years and it was like – well actually it was similar to what we have in Britain now – some very wealthy and very arrogant people suppressing the rights of ordinary people. We have the same kind of lunacy now masquerading as democracy. If it was just happening in a cartoon or a film, I would maybe call it deliciously ridiculous. In real life, it’s not the least bit entertaining and it’s very disturbing. And not least because the authorities we all thought we could rely on (after all we vote for them), are the very people who are allowing this absurd situation to continue. Where will it end?

BTW, you may remember, at the end of the Flash Gordon film, a random hand reaches out and takes the ‘all powerful’ ring Ming wore. Clearly Ming wasn’t really dead and was just biding his time before having another go at world domination (there’s always one). I am reliably informed Ming the Merciless is currently residing in La La Land rent free, in exchange for doing a bit of consultancy work for the great and good.

Bank reform or tokenism? Rule No 1. “Don’t ever side with anybody against the family”.

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I don’t particularly like August. It doesn’t mean holiday time for my family – it just means a month when Paul and I can make little progress towards ever having a holiday because everyone to do with the HBOS scam we’re determined to see exposed, is on holiday. Still, this year August has at least given me some quiet time to continue with my book, which is going well. I can even say I’m enjoying writing it now even although it is taking me back over some very dark times including 22 eviction hearings because, for HBOS/LBG, screwing my business wasn’t enough and they wanted my home as well.

I’ve put as much humour as possible into the book because, as in the ‘Wolf of Wall Street’ story, I can see that what people really enjoy knowing about, is the excesses and madness of the banking world. They want to be entertained and disgusted at the same time – which is maybe why the ‘Wolf of Wall Street’ is a rather one sided story or ‘romp’ that focused entirely on events in ‘La La Land’ but totally ignored the effects banking or bankers have had on the rest of the world. All the same, the film was entertaining and, let’s face it, some of us might give bankers a bit more latitude if they looked like Leonardo de Caprio. But it also made me worry and contrary to what I have previously considered possible, I’m beginning to think maybe bankers are indeed starting to achieve Mafia status? We can’t control what they do but we can make great films about them. Well, if that’s the way we’re going, let’s do it – I have just the script. Although casting could be a bit of an issue with our Britbank villains.

However, there is one overwhelmingly depressing thing that really pains me while I’m writing the book about my own experience with banks and bankers – over the last 7 years and despite bucket loads of rhetoric from Governments, regulators and the endless committees who have, apparently, investigated the causes of the ‘credit crunch’, nothing has changed. Nothing at all. And that’s bad.

I have this horrible gut feeling that, while everyone, including bankers, insist that what we all want is a better banking system devoid of excessive risk, dodgy derivatives and dubious standards, actually, what the banking world really want is to carry on with “business as usual.” In reality, what’s happening now is an even bigger whitewash than all those we’ve already had. While the headlines insist bankers are about to get their comeuppance and even the SFO are threatening to investigate bank malpractice, behind the scenes and very casually, the right people are being put into the right places to make sure the cracks in the walls get a new round of sticky plaster. The ‘revolving door’ is quietly turning again. But moving the chairs around on the Titanic, didn’t do any good after the last credit crunch and moving the same chairs again, won’t stop another crash. Yet again, we have senior bankers acting as regulators – it doesn’t work.

For example, looking back many people, including me, would say HBOS, in the years running up to the credit crunch, became an absolute basket case of a bank. With hindsight even PCoBS, the TSC and the Regulator, would have to agree. Point 137 (page 44) from the PCoBS report into HBOS (HBOS – An Accident Waiting To Happen. April 2013) concludes under the heading of “Conclusion – a manual for bad banking”:

The downfall of HBOS provides a cautionary tale. In many ways, the history of HBOS provides a manual of bad banking which should be read alongside accounts of previous bank failures for the future leaders of banks, and their future regulators, who think they know better or that next time it will be different. We will ourselves seek to draw further lessons from the case of HBOS as we frame recommendations for the future in our final Report. http://www.publications.parliament.uk/pa/jt201213/jtselect/jtpcbs/144/144.pdf

You can take your pick of damning extracts from the FSA Bank of Scotland Public Censure Report (March 2012) but I think point 4.14 explains a lot about the seemingly star struck Exec’s of BoS and their ‘risky’ management:

In relation to large leveraged transactions, these deals involved lending over £75 million or a substantial equity investment which meant they had to be sanctioned by the Executive Credit Committee. There was a significant increase in the volume and complexity of deals that this committee approved during 2006 and 2007. There were 199 approvals of lending in excess of £75 million in 2006 (which represented total

lending of £56 billion), which increased to 361 such approvals in 2007 (which represented total lending of £96.2 billion). There were 56 approvals of lending over £250 million in 2006 (which represented total lending of £36.2 billion), which increased to 110 such approvals in 2007 (which represented total lending of £64 billion. The size of these transactions meant that any default would have a high impact on the book http://www.fsa.gov.uk/static/pubs/final/bankofscotlandplc.pdf

I’m interested in that extract because it confirms how the excessive loans to companies like Corporate Jet Services Ltd http://www.independent.co.uk/news/uk/politics/exclusive-the-cameron-crony-the-private-jet-company-and-a-crash-landing-that-cost-taxpayers-100m-9350090.html had to have been authorised by very senior people in the Bank and not, as LBG would have us believe, by a regional bank manager. But in truth, it wasn’t just BoS that was running amok – it was the whole of HBOS. But the FSA didn’t censor HBOS and maybe because the CEO of HBOS held a senior position in the FSA ?

I remember having a conversation with Bill Sillett (the named respondent for any queries about the Censure Report) who visited Paul and I in April 2012. I asked him back then why the Report only covered the period from 2006 to 2008 when I know for a fact HBOS was acting like a fruit loop from at least 2002. Here’s his reply, taken from my notes of the meeting 11th April 2012:

BS spoke briefly about the time scales of the FSA report and why they chose the period 2006 to 2008. He said Crosby was effectively out of the bank in that period. He said they chose that narrow remit because going back further could have involved another year of work.

I think “Crosby was effectively out of the Bank in that period” is highly significant. Obviously, had the report highlighted poor management of BoS when Crosby was the CEO of HBOS (parent of BoS), it would have caused a few red faces for the FSA. But what I still find amazing is – Mr Crosby may have come out of the Bank in 2006 but, from November 2007, he went from being a Director of the FSA to Deputy Chairman – and that was in the same period when HBOS was already under heavy scrutiny by the Bank of England. And even when the proverbial hit the fan in October 2008 and HBOS got the secret £25.4BN, apparently no one in the Tripartite Authority felt it was inappropriate for Sir James, as he was then, to continue on as the Deputy Chair of the Authority most responsible for regulating banks!

I make the point in my book:

Aside from the fact the people advising the Bank of England on how to cope with various banks losing hundreds of billions of pounds were predominantly bankers (from commercial banks), I’m very confused by the fact Gordon’s chum, Sir James Crosby (now plain old Mr Crosby), the former CEO of HBOS until mid 2006, managed to retain his position of Deputy Chairman of the FSA right through the credit crunch, the bailouts and beyond? Did Gordon Brown realise the FSA were supposed to monitor the Banks so that such disasters couldn’t happen? Had he even heard of the FSA I wonder? (NEXT PASSAGE REDACTED)……..

……..So why did JC keep his position with the regulator? Possibly it was so his friends in high places, like Gordon Brown and Alistair Darling, who appointed him to oversee Government projects, wouldn’t get egg on their faces. In 2006 Gordon appointed JC to lead a ‘Public, Private Forum’ on Identity theft and in April 2008 Alistair Darling appointed him to advise the Government on how to “improve the functioning of the mortgage markets.” And then, of course, there was his knighthood in July 2006 for services to the financial industry.

Oh well, water under the bridge now and Sir James did eventually resign from the FSA in February 2009 when the allegations made by Paul Moore in 2004, could no longer be ignored. Although according to both the FSA and James Crosby, his departure was nothing to do with Paul Moore. Here’s a statement from La La land, as reported by the BBC 11th February 2009:

Sir James said in his statement that HBOS had “extensively investigated” Mr Moore’s allegations, concluding that they “had no merit”. Mr Moore was the former head of risk at HBOS.

“I nonetheless feel that the right course of action for the FSA is for me to resign from the FSA board, which I do with immediate effect,” Sir James added.

The FSA said: “[The] specific allegations made by Paul Moore in December 2004 regarding the regulatory risk function at HBOS were fully investigated by KPMG and the FSA, which concluded that the changes made by HBOS were appropriate.”

“It should also be noted that the FSA’s concerns about HBOS’ risk management framework considerably pre-dated the allegations by Mr Moore,” the FSA said in a statement.

Excuse me? The FSA’s concerns about HBOS pre-dated Paul Moore’s allegations and – what did they do about it? They made the CEO of HBOS a Director of the FSA in January 2004 and then promoted him to Deputy Chair. Confused – you should be.

Here’s the point – as at today’s date, the Chairman of the FCA, which took over from the FSA, is now John Griffith-Jones, who held the position of Chairman of KPMG at the time Mr Moore made his allegations and who must have sanctioned the report refuting those allegations. And, because, some would say that in the corporate world at least, “incest is best”, KPMG were also the auditors of HBOS at the time they prepared the report. I share the concerns of Ian Fraser – none of us should be reassured when the financial industry is so keen to ‘Keep it in the family.’ In June 2012, Ian wrote:

I was surprised and exasperated to learn last week that chancellor George Osborne has rubber-stamped the appointment of John Griffith-Jones, the senior partner of KPMG, as chairman-designate of the Financial Conduct Authority, one of the two financial regulators that will take over from the soon-to-be-disbanded FSA. As the news of this “revolving door”,“poacher-turned-gamekeeper” appointment sank in, my disappointment bordered on outrage.

http://www.ianfraser.org/financial-regulation-with-griffith-jones-appointment-britain-keeps-it-in-the-family/

I was equally outraged Ian – and I begin to wonder what kind of ‘family’ the big banks and their auditors belong to? The Corleone family?

Meanwhile, over at the FRC, Sir Win Bischoff, former Chairman of Lloyds Banking Group (the parent of HBOS), has taken the post of Chairman while simultaneously becoming the Chair of a division of JP Morgan. You could not make it up!

I put up some details the other day about the history of the great and good on the Board of the PRA. https://spandaviablog.wordpress.com/2014/08/12/sir-win-bischoff-chairman-of-the-frc-and-also-a-chairman-of-jp-morgan-the-revolving-door-to-la-la-land-is-spinning-off-its-hinges/

Question: in the same way I sincerely doubt Sir James Crosby (as he was) was ever seriously going to let the FSA rumble the many and varied dodgy scenarios going on in HBOS while he was Deputy Chair, does anyone really believe John Griffith-Jones or Sir Win Bischoff are the right people to head up our regulators? Is Win Bischoff ever going to expose anything really bad that happened in Lloyds under his watch? Is Griffiths-Jones going to take action against KPMG or the HBOS audits under his watch. Is the forthcoming report into the failure of HBOS really going to highlight anything that would compromise those members of the ‘family’ who are still active?

Are we really on the road to reform in our banking sector – or have the powers that be, just made moved the chairs on the Titanic yet again and put the same established and reliable old foxes in place to guard the chicken coups? In my opinion, all this talk of reform is just tokenism.

I am fully aware the PRA are in the process of preparing the report on the failure of HBOS. I am also aware – as is Paul Moore – they fully intend to exclude issues that were fundamental to the Banks’ failure. Apparently, some of the really catastrophic or even criminal conduct in HBOS, is not considered relevant and consequently, is not part of the PRA remit. Yet again, they are not going against ‘the family.’