TODAY’S FAYRE – Sunday 27th April 2014
“Love, if I weep it will not matter,
And if you laugh I shall not care;
Foolish am I to think about it,
But it is good to feel you there.
Love, in my sleep I dreamed of waking,
White and awful the moonlight reached
Over the floor, and somewhere, somewhere,
There was a shutter loose, it screeched!
Swung in the wind, and no wind blowing!
I was afraid, and turned to you,
Put out my hand to you for comfort,
And you were gone! Cold, cold as dew,
Under my hand the moonlight lay!
Love, if you laugh I shall not care,
But if I weep it will not matter,
Ah, it is good to feel you there!”
Edna St. Vincent Millay – poet – 1892-1950
The news that came early on Friday morning that the UKFI would not endorse
the RBS’S board proposal to pay some bonuses in excess of 200% of basic salary was greeted with hysterical and gleeful support, with politicians understandably pandering to the electorate, who remain full of contempt and revulsion on this issue and will never be placated, so long as night follows day.
Not for one minute should one condone unacceptable greed in any walk of life and there is evidence that in the past excessive remuneration packages to bankers have been paid – most of it in cash – at unsustainable levels and disproportionate to shareholder benefits and taxpayers’ exposure. What remains frustrating for those who work in the financial sector is that the politicians and some less-enlightened commentators would have us believe that no radical progress had been achieved in the manner bonuses are paid and distributed. Most bonuses now constitute a massive element of share incentive schemes which engenders continuity and loyalty, also allowing a repayment clause, if profits do not materialise.
So for the Chancellor/government to trigger the UKFI’s statement sends a serious warning to the world at large that it is prepared to support the EU and surrender its financial sovereignty, which will eventually mean that the UK will fail to capitalise on its pre-eminent position as the leading financial centre in the world. My diseased ridden mind tells me that this initiative has Dr Cable’s hallmark all over it. In 50 years of following politics, rarely can there have been a more negative business secretary. He appears to detest free enterprise, creation of wealth and clearly he does not understand that wealth creates employment. As far as I can see, thanks to this ill-considered initiative, the taxpayer can kiss goodbye to its money for probably a decade. The likelihood of RBS being able to hold on to or attract quality people in the future to compete globally is distinctly remote.
In this modern age tearing up contracts is not a good idea. It takes time to evolve a much needed fresh remuneration culture. It is the tanker syndrome. You cannot go from “A” to “B” in two minutes flat. Banking is a global business and like it or not it is very competitive. People do not necessarily have to leave these shores to ply their trade elsewhere, but capital can be moved at the click of an iPad.
What is also so frustrating is that Ross McEwan, the CEO, was in the process of unwinding the investment bank, under instruction, probably starting with the sale of Citizens Bank in the summer. So this precipitated interference, YET AGAIN, is unwanted and unwarranted. I am not surprised that Stephen Hester was left in an invidious position and whether he was sacked or left – incapable of doing the job without excessive interference.
In hindsight maybe the Labour Government made a mistake in not splitting RBS back in 2008, when it might have been possible to deal with the good and bad assets in a more incisive manner. However thanks other skeletons, such as technological shortcomings, PPI, LIBOR and almost certainly foreign exchange trading irregularities, being found in the cupboard, since that fateful day Fred Goodwin and his inept colleagues were exposed for incompetence, lofty ambition and a high degree of greed, this is no time for the government to desert the sinking ship and exacerbate the huge problems there are in achieving its recovery, by being unable to attract quality performers. The restoration of RBS and NatWest is essential. It has over 1000 branches despite being forced to offload 431 to Williams & Glyn consortium, with millions of accounts. To all those apoplectically angry people who are incandescent with rage over RBS being in to the taxpayer for £45 billion and being 83% owned by them, yes I do understand how annoying the situation is. I do get it! My pension was trashed and I should not still being working at my advanced age. That’s life; so let’s crack on!
We should be able to stomach the payment of bonuses to people, who are capable of creating profits and consequently jobs and to those able to mitigate massive losses in attempting to sustain recovery. The gravy train may need to be in existence for a few more years, but it will eventually hit the buffers. The culture has changed and will continue to change; Be patient! However this cap imposed by the government is wrong and it is at complete odds with the Treasury’s decision to sue Brussels over bonus caps!
The news from the front that at least 4 large institutions will be suing RBS over its £12 billion rights issue in 2008 to pay for ABN/AMRO, which saw its share price halve in a matter of weeks, further goes to show the parlous state RBS find its self in. In finishing let me point out the obvious – there is a huge difference between incompetence and negligence and fraud.
These are David Buik personal views
Twitter – @truemagic68
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