Friday, February 28, 2014

We need more satirists to show the City how it really looks!

Every so often, the public prints get a news story absolutely right.
I have found in so many cases, the best interpretation of events is to be found in the cartoon sections, particularly on the business pages.
I have been blogging on the issues of the absence of moral responsibility in the financial sector for a long time now! So, imagine my great surprise (and pleasure) to see a cartoon which encapsulates, in its entirety, the whole moral conundrum which the City and the criminal banksters face every day.
The fact that this cartoon appeared at the same time as the announcement that RBS was paying out a raft of bonuses to its employees, merely makes the amusement even sweeter.
I will seek to describe the cartoon in greater detail in a later paragraph, but let me set the scene by commenting on the latest bonus nausea emanating from the Caledonian bank of unreformed criminals, conmen and clowns.
The RBS chief executive, Ross McEwan, acknowledged that the issue of paying bonuses was "highly emotional" as he explained the multimillion pound windfall at the taxpayer-owned institution.

I would have thought that emotion was the least of his worries, because he is clearly, in his own words, rewarding his staff for their criminality, I mean, he says so himself, in terms.

I had always thought that bonuses were paid when employees reached a specific target, but not in Scotland, apparently. This year the bank paid up huge bonuses despite suffering an £8.24bn loss in 2013 as it slumped into the red for the sixth successive year.

Now, as a tax-payer, I am a shareholder in this joke institution. We have been ploughing money into this shell for years, and still it hasn't finished paying off its debts and punishments.

The CEO avers; "...I need to pay these people fairly in the marketplace to do the job. I do need to make sure we are there or thereabouts and that is all I'm asking for..." he said.

Not unreasonable you may think, until you come to realise that the latest annual loss was caused by £3.8bn of costs for settling litigation and regulatory problems – including £1.5bn extra to compensate customers fraudulently induced payment protection insurance and interest rate swaps in the UK – and £4.5bn of losses on bad assets.

He was literally rewarding his people for the mess that they had created for the bank. When you fraudulently induce customers to pay for PPI insurance, secure in the knowledge that it isn't going to do what you are claiming, you commit the offence of criminal fraud, and you deserve to be nicked. Try clocking a second hand car before you sell it and see what sympathy you will get from the courts if it is discovered. The principle is exactly the same.

The company's shares fell 6.7% to 330.2p on the receipt of the news, wiping more than £2.5bn off the market value of a business that is 81%-owned by the taxpayer.
McEwan, who took over from Stephen Hester in October, at least got some things right. He said that RBS needed to regain the trust of its customers and the public.
"We happen to be the least trusted bank in the least trusted sector in the marketplace," he said.
Well, don't worry McEwan, there are a whole heap of banks queuing up behind to challenge you for that title!
Bankers' bonuses continue to plague the industry amid public uproar over past misconduct. Barclays increased bonuses to £2.4bn. HSBC said on Monday it would increase salaries for its bosses to get around a European union cap on bonuses.

McEwan, who has turned down his bonus for 2013 along with his executive team, declined to say whether RBS would ask shareholders, including the government, for permission to circumvent the EU bonus cap this year. "The board has not opined," he said.
I'll bet they haven't. Considering that such a move would hit them all, in the pocket if it goes wrong, I'll bet they are all sitting shtum and waiting for someone else to make the first move.!
McEwan replaced Stephen Hester as chief executive after Hester was forced out last year by chancellor George Osborne. At the time, RBS said Hester was leaving because a new boss was needed for the start of privatisation, possibly this year.
But McEwan said his plan would take up to five years to complete, casting doubt on the government's ability to sell its 81% stake any time soon.
So, yet another lie in a long line of lies and mis-statements from this pile of hopeless crap. Frankly, we would all have been better off, if when it was in so much financial trouble, the Government had just taken it over and wound it up in the public interest. We would have lost some money, admittedly, but each year we are forced to spend more and more on this criminogenic edifice, just to keep it afloat.
And what has all this got to do with a cartoon in the Daily Telegraph?
I am always amused when I hear the private protestations of bankers about wrong-doing in their institutions.
"...No no, we didn't know that anything untoward was going on...What do you mean I am the CEO and should know what happens in my bank...All our staff are fully trained in their compliance objectives..." etc, etc!
Well, the cartoonists who draw the Alex cartoon on the Business Section page, clearly have a very cynical view of such protestations too, indeed, I never cease to marvel how close to the truth and the reality of the City their cartoons get.
Alex is the epitome of the loathsome investment banker. He and his wimpy friend, Clive work for a huge banking institution. They are at a senior level in the process and Alex thinks only of the money he already has, and the greater amount of money he can acquire through bonuses
He has recently picked up his wife's I-Pad by mistake, and as she is a major non-executve director of a large corporate conglomerate, he not unreasonably believes that the I-Pad will contain a vast amount of confidential corporate information which he can use to gain business advantage.
In the cartoon, he has been busy trying to get the I-Pad open to read the information, but he cannot gain access as the contents are encrypted. Succeeding eventually because his PA knows his wife's birth date, Alex has of course forgotten it, he then decides to give the pad to a young intern to go through the information and summarise its usefulness. We pick up the story where the young intern is telling Alex what she has done with the pad.
Alex says: "...You did what with that I-Pad I entrusted to you, Amelia..?"
Answer: "...I handed it in to Compliance..."
Alex says: "...You utter idiot..."
Amelia says: "...Look, Alex, you were asking me to extract information from an illicitly-obtained device. This clearly breaches the bank's fraud prevention code..."
Alex: "...I don't believe this, you're a graduate trainee! Your only function is to do tasks that we delegate to you...What do you think gives you the right to lecture me on business ethics..."
Amelia: "...Maybe the fact that you all delegated the task of doing your on-line anti-fraud training modules to me. I got 100%..!"
Alex: "...But you weren't supposed to take it seriously..."
In this perfectly encapsulated small vignette, the cartoonists have amplified the whole gamut of how the City fails to take Compliance issues seriously, and how young trainees are shown the worst kind of business examples.
Alex and his friends abuse the young trainee's time by getting her to complete their electronic training requirements, a feature which is ubiquitous in all bank training, particularly money laundering awareness, and then when she demonstrates that she has learned the lessons the training was intended to inculcate, she is blamed for taking it seriously.
So the message that comes through is that Compliance is all a waste of time, unethical behaviour is acceptable as long as you make money, that breaching the bank's codes of procedure and crime prevention are there to be ignored, and that it is perfectly permissible to abuse young interns and trainees.
I know that the cartoonists are only doing this to raise a laugh, but underneath the laughter, there is a very serious message being spelt out here! All this wrong-doing, this criminality is driven by over-paid executives who are willing to flout the norms and ethics of conventional behaviour to make more money. They all know what they are doing, and they all know it is wrong, and we need to start locking them up.
We need more cartoonists and satirists to hold a mirror up to nature in the Square Mile. Perhaps if we had a Thomas Rowlandson, or a Hogarth, a Jonathan Swift  or a Daniel Defoe alive and working today, we would have a wonderful set of examples to pick from.


4 comments:

AbogadoNZ said...

Good post again Rowan. Thankfully Alex is syndicated here in NZ so we get to see his cynicism and lifelike portrayal of 'City' life. It is on message virtually every day and shows the complete disdain that bankers have for compliance. It is much the same here which has allowed our banks to miss sell a range of products that are only now coming to light - especially the interest rate swap driven agricultural mortgages ($40 Billion worth). Finally an Australian law firm has started a class action against the retail banks for excessive miscellaneous charges. However there is little appetite for compliance in a country where only this week it came to light that the CEO of a major IP based law firm did not have the qualifications set out on his CV. Ironically the clown was also a local director of Transparency International! The latter lends so much weight to their stupid pronouncements that there is little or no corruption in NZ. Bollocks to that.
Ashley

lifeafterdebt said...

Another great post Rowan. If my own case is anything to go by I am sure Alex's attitude is indicative of all those inconvenienced by compliance regimes they have no intention of abiding by and there remains no incentive for them to change if regulators and the FOS continue to be uninterested when individuals who have become victims of banking fraud complain compliance rules have been flaunted and mandatory documents are missing.

Raymond R said...

Hi Rowan

Check out this story on Mish Shedlock's blog

http://globaleconomicanalysis.blogspot.ca/2014/03/culture-of-greed-and-arrogance-carney.html

Raymond Reichelt

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