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  Hail to our fine Bankers across the UK!

Banker-bashing has become a new TV sport; a month seldom passes without some programme exposing the venality of the City. This one was no exception, giving a detailed breakdown of how several banks manipulated Libor – the rate at which banks lend to each other – long after they had been bailed out with public money in 2008. It was clear evidence that contrition and a willingness to change are not hot-wired into the banking system.

It was this that made the programme so compelling. Despite the industry consistently having proved itself to be at best operating in its own interests rather than its clients', and at worst criminally negligent, almost all of the banking big guns who popped up as talking heads came across as bewildered at how unloved and misrepresented they have been, rather than aware that they have done anything seriously wrong.

Libor was first being fixed before the crash in 2008, as banks "lowballed" the interest rate to make them look more creditworthy than they actually were. This, according to one former chief executive, was hardly worth mentioning: "I don't think it really matters what happened in 2008." Really? It doesn't matter that the banks lied to the world? Or that they were condoning a culture that would lead to more systematic abuses?

More disturbingly, the Bank of England was made aware of what was going on and chose to do nothing. As did the entirely toothless British Bankers' Association. "Are you clean?" it asked a bank. "We're not clean-clean," came the response. "No one is clean-clean," said the entirely reassured BBA.

There was a modicum of handwringing for the post-crash manipulation of Libor, but there was a marked reluctance on everyone's part to take any personal blame. The former Barclays chairman Marcus Agius behaved as if his resignation was a high-minded falling on the sword rather than a lancing of the boil. Another Barclays non-exec declared she felt Diamond had been made a scapegoat.

Meanwhile, at RBS and UBS, the other two banks implicated in Libor rigging, there have been no resignations. What is it about collective and personal responsibility that these people don't get? Maybe they feel they don't earn enough for that. A couple of other bankers felt we should all be reassured now that lessons had been learned and "tough" new measures put in place to oversee the industry. What no one saw fit to mention was that the culture and personnel remain largely unchanged.

Greed, trust and bankers - a BBC 2 Documentary series looking at our very fine Bankers and the fine way they have behaved!

http://www.bbc.co.uk/i/b01sf11c/ < View the TV programme now

Can we ever trust bankers again?
BBC NEWS 8 May 2013
As Britain awaits a major report by the Parliamentary Commission on Banking Standards, the BBC's Business Production team, in partnership with the Open University, asks what went wrong with the system and can we ever trust bankers again?

About £132bn of British taxpayers' money has been spent bailing out the banks since the credit crunch in 2008 turned into an economic crisis.

But the crisis has exposed deeper problems with the banking industry.

The first episode of a three-part BBC Two series looks at the Libor scandal - a watershed moment that finally exposed wide-scale lying and cheating at the heart of the banking system.

Three banks - Barclays, Royal Bank of Scotland (RBS) and UBS - have together been fined more than £1.6bn by British and American regulators for fixing submissions to the London Inter-Bank Offered Rate (Libor).

Marcus Agius, who resigned as chairman of Barclays as a result of the scandal, described the moment last June when he discovered what had been going on with Libor: "I was sick to my stomach because I realised just what an appalling thing it was and I realised what a serious implication it would have for the bank."

Several other banks are still under investigation. The outcry over Libor was so great that it prompted the setting-up of the Parliamentary Commission on Banking Standards, which is set to release a major report by the end of this month

May 9, 2013 08:39 Shropshire Star
TV review: Bankers – Fixing the System
This latest effort, part of a new series from the BBC’s much-respected Money Programme strand, adds some women witnesses into the mix but the bottom line tends to be that banking is, and remains, a very male dominated business

And it was the shift from a gentlemen’s club where their word was their bond, to a far more testosterone-fuelled, aggressive and competitive style of banking and investing that is partly at the root of the disaster over the past five years that hit the financial sector and, by extension, the rest of us.

The first episode of Bankers focused on Bob Diamond, the American investment banker brought in to turn a sleepy arm of Barclays into what would become its core profit-maker, Barclays Capital. Described as charismatic and competitive, Diamond was compared by one commentator to Herbert von Karajan, one of the greatest conductors of the last half century, for the way he orchestrated operations at Barclays.

And yet, after the Libor rate-rigging scandal saw him lose his job, he was unable to tell a Parliamentary committee what the three core values of the original Quaker founders of Barclays had been – honesty, integrity and plain dealing.

The programme tried to use the Libor scandal, in which banking executives and investment managers deliberately fixed the rate, at which banks lend to each other, to serve their own ends.

It became clear that the roots of the Libor scandal went back to the early days of the financial crisis, in 2007 and 2008, and the programme tried to follow the revelations as they led to ever-greater fines at Barclays, Royal Bank of Scotland and the Swiss bank UBS.

But it felt that there was just too much to take in. In the hands of a single expert narrator pursing a single line of inquiry, this might have worked. But Bankers tries to include all the wide-ranging woes of the banking sector in one indigestible lump. The result was stodgy and a bit of a mess.

8 May 2013 Last updated at 00:49 BBC NEWS
In the five years since the crash that brought the world's economy to its knees, bankers have lurched from one crisis to another.
Scandal after scandal has raised questions about their pay, their values and their judgement and after the industry received billions in taxpayer bailouts, the public is in no mood to forgive and forget.

Like it or loathe it, banking is a vitally important industry to London and the whole of the UK.

But can we ever trust bankers again?

Watch Bankers: Fixing The System on BBC2 on Wednesday 8 May at 21:00 BST or catch up later on BBC iPlayer.

Bosses of about 160 banks received median raises of 11% last year and a combined 28% over the past two years.
by Neil Weinberg MAY 3, 2013
At a time when many workers consider themselves fortunate just to have jobs, and raises are minuscule to non-existent, such gains at the top run the risk of setting off a fresh wave of populist anger. That's especially true in banking, which is arguably the most vilified industry around.

Across all industries, CEO pay has swollen to 1,800 times what the average worker makes. One of the main culprits behind the top-dog pay inflation is "peer benchmarking," or the practice of paying bosses based on what similarly situated CEOs make, writes Broc Romanek, editor of CompensationStandards.com.

"For nearly two decades, compensation committees have routinely set CEO pay in the top quartile of that for their peers. This practice inadvertently created a slippery upward slope." in which the "average" inexorably rises, Romanek adds. It's like living in Lake Wobegon, where every CEO is above average.

To me, the fact that the top men and women make vastly more than the rank-and-file is not in itself a problem. I'm a capitalist — but one who believes vast wealth should only result from vast wealth-creation. Bill Gates built Microsoft from nothing. Sergey Brin and Larry Page did the same with Google. I don't begrudge them a dime. I'm less comfortable when the hired help is made hugely rich by taking risks with other people's money (especially taxpayers').

Under the current system, the inflationary pressure on CEO pay that's exerted by peer benchmarking is exacerbated by boards that are too cozy with management and big shareholders who are often too quick to go along. At times, it feels like a cloistered ruling cabal lives in its own dream world apart from the rest of us.

At JPMorgan Chase, CEO Jamie Dimon's compensation committee consists of three of the most richly paid members of America's ruling corporate elite. That helps explain how, even after the bank's London Whale debacle prompted the committee to cut Dimon's pay 19%, he walked away with $18 million.

What worries me about where executive pay is headed is that we risk stumbling from one highly flawed system to another that may be worse.

Regulators, for example, are pushing companies to replace peer benchmarks with "absolute" ones. Under the new regime, a company might declare that a CEO will receive a bonus if it achieves a set return on assets, regardless of how its peers do. The problem is that with nothing to compare the company to, boards may set the hurdles too low. Nor does such a system do anything to eliminate the risk that managers will fudge the numbers to hit their goals.

Regulators, it seems, are nevertheless fixated on reducing risky behavior by minimizing use of performance-based pay, especially stock options, Susan O'Donnell of the consultancy Pearl Meyer & Partners told me this week.

We certainly learned during the past two financial crises about the perils of lavishing bankers and other corporate bosses with too many options. From Enron to Lehman, the prospect of lavish paydays encouraged outsized risk-taking and resulted in corporate calamities that left millions of innocent victims in their wake.

Why have so few bankers gone to jail for their part in the crisis?
The Economist 4th May, 2013
CRIME sometimes pays unusual social dividends. In 2010 São Paulo’s museum of modern art hosted an exhibition of works that had been seized from a variety of crooks and drug traffickers. Some of the art had belonged to the founder of a Brazilian bank, Banco Santos, that had collapsed in 2005. After the bank’s liquidation Edemar Cid Ferreira lost his art collection and his home, was convicted of “crimes against the national financial system” and money-laundering, and sentenced to 21 years in jail.

For better or worse, many people would love to see more bankers behind bars for their role in blowing up the West’s financial system. In Britain not one senior banker has faced criminal charges relating to the failure of his institution. A handful have faced the lesser sanction of being barred from running another bank or company, or agreeing in settlements with regulators not to do so. (Policymakers have proposed introducing a “rebuttable presumption” that the directors of a failed bank should be automatically barred from running another unless they could prove they weren’t at fault.)

In America the Federal Deposit Insurance Corporation has filed over 40 lawsuits against officers and directors of failed institutions since 2010; more actions are expected. But prosecutors have brought few criminal charges against high-profile bankers. The American government secured its first crisis-related conviction of a senior banker, a Credit Suisse employee charged with mismarking mortgage-backed securities, only in April; Kareem Serageldin will be sentenced in August.

The prosecutorial coyness of British and American authorities contrasts with the harder-charging approach taken by their predecessors and by authorities elsewhere. During America’s savings-and-loans (S&L) crisis in the 1980s more than 800 bankers were jailed.

Iceland managed to assemble a dedicated team of more than 100 investigators who have won convictions against executives in charge of Glitnir, a failed bank, and are bringing charges against other high-profile bankers and businessmen, including the bosses of Iceland’s other two big banks. In Spain the behaviour of some 90 former bank executives and board members is under investigation. Dodgy deals with cronies, soft loans for themselves, allegedly irregular salary and pension packages, inflated golden handshakes and overgenerous fees for attending rubber-stamp meetings are all being scrutinised.

There are also differences in the laws that can be applied. The main reason that American and British regulators give for the paucity of prosecutions is that they have struggled to connect wrongdoing lower down in the bank, such as the LIBOR scandal, to those running it. Another is that it is generally not illegal to run a bank into the ground through incompetence (although British and German policymakers are consulting on the introduction of criminal sanctions for reckless management).

The threshold for getting bankers banged up is lower in some places than others, however. Germany, Switzerland and Austria, for instance, have an elastic concept called Untreue, or breach of trust, which is defined as a derogation of duty that causes real damage to the institution. Since the crisis German prosecutors have charged bankers at firms including WestLB, BayernLB, HSH Nordbank and Sal Oppenheim on offences including Untreue.

In Brazil, the law is stricter still. It holds banks’ executives and directors (and even their controlling shareholders) personally liable to repay the debts of failed banks even where no fault is proven. “The idea is really to put the management’s net worth at stake,” says José Luiz Homem de Mello of Pinheiro Neto, a São Paulo law firm.

Yet imposing stricter standards of liability has costs. It would overturn a tradition in English and American law in which courts avoid second-guessing business decisions that are honestly made but wrong. Heinrich Honsell, a law professor, sees the use of Untreue recently in commercial cases as a disturbing phenomenon. “It’s not right to criminalise negligent mistakes,” he says. “Very soon judges will be telling us how to manage risk.” Opponents of the idea of a law against reckless management warn that the effect would be to discourage risk-taking of any sort.

One of Europe's most powerful bankers, the Santander chief executive, Alfredo Sáenz, has resigned after a long-running row about whether he should be banned from heading the eurozone's largest bank.
Giles Tremlett in Madrid and Jill Treanor guardian.co.uk, Monday 29 April 2013
The shock replacement of 70-year-old Sáenz by internal candidate Javier Marín comes just two weeks after the Bank of Spain ordered a review into whether or not he would meet new rules governing bank executives with criminal convictions.
Sáenz was convicted in 2009, and handed a three-month suspended jail sentence, for deliberately making false allegations against four businessman who owed money to his previous bank, Banesto. The businessmen were remanded in jail in 1993, but later proved their innocence. Sixteen years later they won a case against Sáenz. Under Spain's banking rules at the time, the sentence automatically meant he would have been declared unfit to run a bank as soon as the appeal process ran out.

The court declared that Sáenz "knew the allegations were false, including those in later versions of the writ". The Socialist government of José Luis Rodríguez Zapatero tried to pardon him, stating that this also included wiping out his criminal record, thus allowing him to continue at Santander. But that was struck out by the supreme court, which declared that governments could not wipe a criminal record.

On 12 April, the current conservative government of Mariano Rajoy changed the law to ensure that those with criminal records were not automatically banned from senior bank jobs. However, the law left the decision with the Bank of Spain on Sáenz's credentials and opened a new formal inquiry a few days later. A decision had been expected in May.

The government said the new law was meant to reflect European Banking Authority guidelines, which nevertheless state that "criminal or relevant administrative records should be taken into account".

Santander sources at the time said that Sáenz remained energetic and hard-working, so his resignation seemed unlikely to have anything to do with his health. He takes away an €88m (£74.2m) pension pot.

El País on Monday reported that the finance ministry had been opposed to allowing Sáenz to continue at the bank.

Santander has quadrupled in size since Sáenz took over as CEO in 2002, expanding into Britain by buying Abbey National, Alliance & Leicester and much of Bradford & Bingley, rebranding them with the Santander name.

'Greedy bastards': investor, 75, attacks Barclays bosses at AGM
Widower Joan Woolard applauded after telling execs: 'I don't understand how you sleep at night'
THE WEEK LAST UPDATED AT 10:02 ON Fri 26 Apr 2013
A PENSIONER channelled the "fury of a nation" yesterday as she lambasted Barclays bosses at the bank's Annual General Meeting.

Investor Joan Woolard, 75, travelled more than 100 miles from Spalding, Lincolnshire to London's Royal Festival Hall so she could tell the bank's directors that "people regard Barclays and its board as a bunch of crooks".

She told them: "Banks have brought us down – brought the entire global economy down. Yet none of you have gone to jail. I don't understand how you can sleep at night."

Woolard, a widow who lives on £726 per month, claimed anyone who wanted more than £1m per year to live on was a "greedy bastard". She also mocked Barclays' new slogan as the "go to" bank, saying it was more like the "go to hell" bank.

Her speech was applauded by fellow shareholders and lauded by Labour MP John Mann, who told the Daily Mail: "Woolard speaks for England."

Responding to her concerns, the bank's new chairman Sir David Walker said: "I readily agree that Barclays overpaid in the past – it's not going there again."

Yesterday was not Woolard's first brush with the Barclays board. Last year she branded the bank "heartless" for cancelling the joint credit card she held with her husband after his death – meaning she was unable to pay for flowers at his funeral. Her complaints prompted the bank to change its policy.

This time around, Woolard was one of a string of investors who criticised Barclays over bonuses, tax avoidance and speculation on food prices at the AGM, according to The Guardian.

Barclays is seeking to clean up its image in the wake of the Libor rate rigging scandal. Following the departure of CEO Bob Diamond, the bank recently ousted Rich Ricci, the head of its investment bank.

You bunch of crooks! Widow, 75, speaks for millions as she stands up at Barclays' AGM to attack 'greed' of bankers pocketing sky-high pay packets
Joan Woolard of Lincolnshire slammed pay policies at London meeting
Said she 'doesn't know why anybody needs £1m to live, even in London'
Chairman Sir David Walker said board is 'sympathetic' to her concerns
By James Salmon PUBLISHED:18:15, 25 April 2013| UPDATED:08:19, 26 April 2013
It had to be said and yesterday a widow from a small market town was the one to say it.

Venting the fury of a nation, Joan Woolard accused the millionaire bosses of Barclays of being ‘greedy bastards’.

The 75-year-old had travelled all the way from Spalding in rural Lincolnshire to the bank’s annual meeting in London to condemn the City’s bonus culture.

Mrs Woolard lambasted Barclays directors for dishing out seven-figure pay packages and demanded to know why no bankers had been jailed.

Mocking the new Barclays motto – ‘the go-to bank’ – she added: ‘Go-to? Go to hell Barclays! A lot of people regard Barclays and its board as a bunch of crooks.

‘My income is £726 a month. I live quite well on that – I don’t understand why anyone needs a million, even to live in London.

‘Anyone who asks for more than that is a greedy bastard – pardon my French.

‘Banks have brought us down – brought the entire global economy down. Yet none of you have gone to jail

The Dáil heard a tale of two Irelands yesterday.
It centred on the controversy surrounding a handsomely paid senior banker and a Waterford family’s struggle to put food on the table at a time of deep recession.
26 Apr 13 THE IRISH TIMES
Sinn Féin’s Pádraig Mac Lochlainn raised the Government’s decision not to oppose the remuneration package of €843,000 for Bank of Ireland chief executive Richie Boucher at Wednesday’s bank agm.

He noted that tens of thousands of homeowners had woken up yesterday to learn of yet another mortgage rate hike, this time from AIB and EBS. It was even more galling, he said, for those people who had followed the proceedings whereby Boucher’s package was endorsed.

He asked Tánaiste Eamon Gilmore where Labour stood on the issue. A few years ago, he said, Labour believed that bankers’ pay should be capped at €250,000. He wanted to know if the party had been in full agreement with the Government’s decision not to oppose the package.

Gilmore replied that he did not agree with the top levels of bank pay. Silent backbenchers nodded approval.

Sinn Féin’s Brian Stanley asked: “Why did the Tánaiste not vote against them then ?’’

Gilmore gave the same explanation as Taoiseach Enda Kenny and Minister of State for Finance Brian Hayes had advanced earlier in the week.

The Government, he said, had commissioned Mercer to do a report and it had recommended reductions of between six per cent and 10 per cent in bankers’ pay. His view was that the highest reductions should come from those paid most.

Irish Lawmakers Urge Government to Vote Against Top Banker's Pay
By Eamon Quinn 23 Apr 13
DUBLIN--A row about the pay of Ireland's top bankers re-ignited Tuesday, with several prominent lawmakers Tuesday in a special measure in parliament urging the Irish government to vote down the pay-and-pensions package for Bank of Ireland PLC's (IRE, BIR.DB) chief executive Richie Boucher at the bank's annual shareholders' meeting Wednesday.

The bank is only one of three lenders that the Irish government and its bailout lenders have earmarked for survival after the Irish banking system came close to collapse over the last five years. Amid Ireland's banking debt crisis, the lender narrowly escaped outright nationalization, but is still 15% owned by the government.

Kevin Humphreys, a prominent lawmaker of the Labour Party, the junior partner in Ireland's coalition government, was among a group of lawmakers who urged the government to vote against the award of a basic salary of EUR690,000 that he said was "well above" a government-imposed cap of EUR500,000 on top bankers' pay. Other pay and pensions increased Mr. Boucher's total salary to EUR843,000 last year.

However, the previous government had struck an "exemption" deal with Bank of Ireland and therefore Mr. Boucher's pay was not in breach of the government's pay guidelines, and it would not be voting against his pay at the shareholders' meeting, said Deputy Finance Minister Brian Hayes.

Pay for top bankers at other lenders rescued at huge costs by Irish taxpayers, including Allied Irish Banks PLC and Permanent TSB, were not in breach of the government's pay cap, he said.

"However, it can never be forgotten by management and employees of these banks both past and present that without enormous cost to Irish taxpayers that these institutions would not have survived," Mr. Hayes said

Rich Ricci and the pernicious symbolism of the greedy banker
Jonathan Jones guardian.co.uk, Friday 19 April 2013
Banker Rich Ricci looks the quintessence of the fat cat, the one percenter, the greed-is-good financier in this photograph. Ricci, who has just retired as head of the corporate and investment division of Barclays at 49 as the bank seeks to clean up its image, here gives off a moneyed attitude calculated to offend critics of the selfish bravado of high-flying bankers. Look at how arrogant this character seems

The reason the picture got into the Mirror newspaper back in March, however, was that Ricci named another horse, Fatcatinthehat, in what appears to be a gleeful allusion to The Mirror quoting the Labour MP John Mann, of the Treasury select committee, who called the horse's name an "insult" that "shows how out of touch these bankers are." So now Rich Ricci is paying the price for his insults after a fashion: he is not exactly walking away from Barclays a poor man. Yet it's all too simple, isn't it? You feel that, don't you? Image and reality never just fit together like this. Pictures lie.

In ridding itself of Ricci, the bank that was caught out in the Libor scandal is casting away a mythic image of wickedness, an over-the-top cartoon villain – a scapegoat. The reaction to this picture does not show the truth about fatcatinthehat bankers. It shows how crass today's mood of "banker bashing" is, how superficial as a critique of capitalism, and how easy it is for banks to elude hunters who think a fox always wear shades and flashes its money around and has the ludicrously apposite name Rich Ricci.

The rage we might feel at this picture of ill-gotten, crudely displayed wealth is unfortunately mired in a history of hatred. Yes I know – asking for sensitivity towards bankers? Yet while other groups assert the right to be offended, loathing bankers is held to be OK. Is it, really, that OK? For a glance through the story of political images reveals that the kind of feelings this picture might arouse are actually highly suspect and even dangerous. Images of grotesque "capitalists" were churned out by the Soviet Union. In a Soviet propaganda poster from the 1920s, a fat cat in a hat is driven down onto the ground by the force of socialist truth being written in red on a wall. The capitalist wears a suit that his corpulent frame barely fits into. He has a top hat. He truly is a fat cat – in a hat

HBOS trio condemned - but will they be held to account?
5 Apr 2013 Channel 4
Sir James responded earlier on Friday by resigning as an adviser to private equity firm Bridgepoint, which he joined in 2006.

"Following discussion with Sir James, he has resigned from the advisory board this morning," Bridgepoint said in a statement.

The Parliamentary Commission on Banking Standards, which includes among its members the archbishop of Canterbury, found the three bankers guilty of "catastrophic failures of management" in the run-up to the collapse of HBOS which resulted in its emergency takeover by Lloyds bank.

The influential commission of MPs and peers found that "toxic" misjudgments by the three led to the bank's downfall. Lloyds later need a £20.5bn taxpayer bail-out at the height of the financial crisis as a direct result of its acquisition of HBOS

Former HBOS director, Peter Cummings, has been penalised by the Financial Services Authority (FSA), after being fined £500,000 and banned for life from working in the City last September.

But the commission said it was wrong that he should shoulder the blame alone, and called on the new City regulator to consider barring Sir James, Mr Hornby and Lord Stevenson from taking up any role in the financial sector.

The commission said in the report: "The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank's board from its birth to its death."

Reckless lending 'not my fault'
Lord Stevenson in particular came under heavy fire from the report, having infuriated the commission by claiming reckless lending at HBOS was not his fault because he was "only there part time".

It said he had shown himself "incapable of facing the realities of what placed the bank in jeopardy from that time until now".

Banker Pleads Not Guilty After Extradition to U.S.
By CHAD BRAY 5 Apr 2013
A former Credit Suisse Group AG investment-banking executive pleaded not guilty Friday after he was extradited from the U.K. to face criminal charges related to the U.S. financial crisis.

As the former global head of Credit Suisse's Structured Credit Trading business, Kareem Serageldin is the highest-ranking Wall Street executive charged criminally in a case related to the 2008 financial meltdown.

Federal prosecutors in New York alleged in an indictment last year that Mr. Serageldin and two others conspired to inflate the values of mortgage bonds during the financial crisis.

"How do you plead?" said a deputy to U.S. Magistrate Judge Kevin Fox.

"Not guilty," Mr. Serageldin said.

Bail was set at $1.5 million, to be secured by $750,000 in cash.

Sean P. Casey, a lawyer for Mr. Serageldin, declined to comment Friday.

Mr. Serageldin was taken into custody by U.K. authorities in September outside the U.S. Embassy in London. He was granted bail, and in January, declined to contest his extradition to the U.S. at a court hearing in the U.K.

Mr. Serageldin, a dual U.S.-U.K. citizen, has been charged in the U.S. with criminal conspiracy, filing false books and records and wire fraud. Two others charged in the case, former traders, Salmaan Siddiqui and David Higgs, previously pleaded guilty to conspiracy charges in the matter.

As the U.S. real-estate market began to deteriorate in 2007, Mr. Serageldin and others allegedly began manipulating the value of securities backed by mortgages in a trading book at Credit Suisse, U.S. prosecutors said.

They allegedly did so to give the false appearance that the $5.35 billion trading book was profitable and to secure significant year-end bonuses, prosecutors said. Mr. Serageldin received a $7.3 million pay package for 2007, prosecutors said

Executive bans urged for "colossal" HBOS failure
By Matt Scuffham LONDON | Fri Apr 5, 2013 5:49pm BST
Bailed-out British bank HBOS was so badly run it would have failed even without the 2008 financial crisis and the regulator should consider banning its former bosses from the industry, a parliamentary panel said in a report.

The Parliamentary Commission on Banking Standards, tasked with finding ways to reform UK banks, said HBOS was an "accident waiting to happen", with bad lending and losses across the business likely to have led to its insolvency even without the funding and liquidity problems of the financial crisis

HBOS, Britain's biggest mortgage lender, had to be rescued in 2008 with a government-engineered takeover by rival Lloyds, which subsequently needed a 20 billion pound bailout to survive.

The committee said regulators bore some of the blame, but primary responsibility lay with Dennis Stevenson, chairman from the formation of HBOS in 2001 until its collapse, and former chief executives James Crosby and Andy Hornby.

There was a "colossal failure of senior management and the board", said Commission chairman Andrew Tyrie, a Conservative MP who expressed surprise that only Peter Cummings, who was head of corporate lending at HBOS, had so far been punished.

"The Commission has asked the regulator to consider whether these individuals should be barred from undertaking any future role in the sector," Tyrie said in the report published on Friday.

Crosby was chief executive of HBOS between 2001 and 2006 before being succeeded by Hornby.

The trio earned millions during their time at the bank and in subsequent roles. Crosby was paid close to 8 million pounds during his tenure as HBOS's chief executive. Hornby was earning 1.9 million pounds a year before leaving the bank, while Stevenson's package was worth over 800,000 pounds a year.

Following the report, Crosby, 57, promptly resigned as an adviser to private equity firm Bridgepoint. He is also senior independent director at the world's biggest catering company, Compass, which declined to comment on whether he would keep his 125,000-pound-a-year position.

Cummings was fined 500,000 pounds by the now disbanded Financial Services Authority (FSA) in September and banned for life from the industry.

Hornby declined to comment on the report. After leaving HBOS, he worked as chief executive of healthcare group Alliance Boots, earning over 2 million pounds a year, and now runs betting shop chain Coral,

Investors launch £4bn compensation claim against RBS
BBC NEWS 3 Apr 2013
Thousands of investors have launched a joint compensation claim for up to £4bn against Royal Bank of Scotland and several of its former directors.

The group claims the bank deliberately misled shareholders into believing it was in good financial health just before it collapsed in 2008.

More than 12,000 private shareholders and 100 institutional investors have raised a class action against the bank.

Former chief executive Fred Goodwin is among those named in the action.

Ex-chairman Sir Tom McKillop is also being sued, along with Johnny Cameron and Guy Whittaker, who were senior figures at the bank in 2008.

RBS has declined to comment on the development.

The institutions involved in the claim are understood to include 20 charities as well as churches, pension funds, hedge funds, fund managers and private client brokers. Collectively they manage in excess of £200bn.

Rights issue

The bank has 30 days to respond to the claim, which relates to a £12bn rights issue by RBS in 2008 to shore up its balance sheet after its disastrous acquisition of Dutch bank ABN Amro.

It is the second in recent days to be lodged against RBS.

Last week a group of 21 claimants launched a multimillion-pound lawsuit, also over its 2008 cash call.

The latest claimants said in a statement on Wednesday: "The action group maintains that the bank's directors sought to mislead shareholders by misrepresenting the underlying strength of the bank and omitting critical information from the 2008 rights issue prospectus.

"This means that RBS will be liable for the losses incurred on shares subscribed in the rights issue, by reason of breaches of Section 90 of the Financial Services and Markets Act 2000."

The action group estimated that the final claim may be as much as £4bn

The Salz report
Jim Armitage 04 April 2013
A former Financial Services Authority high-up told me once he and his colleagues used to have a sort of matrix of evil when it came to judging the banks.

They tabulated them thus: HSBC was generally competent and good, RBS was incompetent and evil, Lloyds was incompetent and good and Barclays was competent and evil.

The Salz report on Why Everyone Hates Barclays this week put me in mind of my old chum’s anecdote. For, if you read past the waffle in its 234 pages, it is hard not to come away with one’s suspicions confirmed: this has been a bank run by very clever people not acting entirely in our best interests.

I hope the eminent lawyer Anthony Salz will forgive my slight impatience with his prose but, like my father’s old Citroën 2CV, it takes a while to get moving, even with the prevailing wind of some enormous scandals. Still Salz should be congratulated for the many criticisms he makes in this report into Barclays’ reputation. And, perhaps most impressively, for his huge list of misdemeanours at the bank over recent years — many of which we may have forgotten: mislabelling Spanish investment products; wrongly rating risky Aviva bonds; not segregating clients’ funds from its own; inaccurately reporting 57?million trades to the FSA; the Del Monte conflict-of-interest scandal. The list stretches way beyond the Libor and PPI affairs for which it is now so celebrated.

New chairman David Walker talked of its making for “uncomfortable reading”. I’m not sure about that: although it’ll make the Varley, Diamond, Agius axis squirm, Walker is sitting pretty. If he and Antony Jenkins can keep new scandals at bay over the next few years while they’re in charge, they’ll be hailed as heroes returning Barclays to its Quaker values.

Largely lost in all the critical stuff in his report in this morning’s papers was Salz’s key message: that Barclays’ management must make a real change to the whole company’s culture.

Crucially, he says, they must create a “cultural compatibility” between the big egos in the investment bank and the more normal types in the retail bank

HBOS: Regulator's findings shame three executives who brought down a bank
Bank so poorly run it would have gone bust even without 2008 crash, parliamentary commission finds
Jill Treanor, City editor, The Guardian, Friday 5 April 2013
The three executives who ran HBOS bank in the runup to its near-catastrophic collapse have been slated for their "colossal failure" of management in a scathing report which calls for them to be held to account by the City regulator.

The highly critical account of the events that led to HBOS being rescued by Lloyds in September 2008 said the responsibility for the management failings rested with the former chairman Lord Stevenson, and the former chief executives Sir James Crosby and Andy Hornby, and says the bank would have gone bust even if the global financial meltdown of that year had not happened. The bank, formed out of Bank of Scotland and Halifax in 2001, racked up £47bn of losses on bad loans.

In a report entitled An Accident Waiting to Happen, the parliamentary commission on banking standards calls on the trio to apologise for their "toxic" mistakes which caused the downfall of the bank and prompted a £20bn taxpayer bailout.

The HBOS report comes in another torrid week for the banking industry after a report commissioned by Barclays found its bankers "seemed to lose a sense of proportion and humility" in their race for big bonuses. The regulation of HBOS by the Financial Services Authority – which was shut down last weekend – is described as "thoroughly inadequate", but the responsibility for the management failures is placed squarely on the three men.

The report by the commission, set up in the wake of the Libor scandal, said: "The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank's board from its birth to its death."

Crosby sold two-thirds of his shares just before the banking crisis hit and the bottom fell out of share prices.

Unlike former Royal Bank of Scotland boss Fred Goodwin, Crosby has retained his knighthood and his £570,000 annual pension. Under pressure from parliament Goodwin's pension was halved to £340,000.

Sixteen banks at the core of the global financial system —including JP Morgan, Bank of America, and Citigroup— scored a major victory last Friday
when a federal judge dismissed nearly all the charges brought against them by a group of plaintiffs that includes municipal governments, pension funds, bondholders, and other investors who lost billions of dollars as a result of LIBOR rigging. The ruling is a major setback, both legally, and financially, for those harmed by the LIBOR manipulation conspiracy. Among the most damaged are are thousands of local governments that were played like ATMs during the Financial Crisis by the banks. Banks used their power to set 3-Month and 1-Month LIBOR rates so as to extract potentially billions in interest rate swap payments from the public. Countless small investors lost equally huge sums of money as investments indexing LIBOR were rigged to pay out less. The lawsuit’s dismissal ensures that the banks will keep billions of dollars in ill-gotten gains. The ruling may also bolster the banks’ positions against ongoing investigations and settlements sought by government regulators in the US, Europe, and Japan.

by DARWIN BOND-GRAHAM 4 Apr 2013

Strangely, the judge’s order acknowledged the massive global fraud that caused financial damages to the public in favor a few wealthy institutions. However, Judge Naomi Reice Buchwald relied on technical legal arguments to throw out the core claims of the lawsuit. In other words, the ruling doesn’t deny that the crime occurred and that the Plaintiffs sustained serious damages, but still dismisses the claims.

“We recognize that it might be unexpected that we are dismissing a substantial portion of plaintiffs’ claims, given that several of the defendants here have already paid penalties to government regulatory agencies reaching into the billions of dollars,” concluded Judge Buchwald in her 161 page order

Round up of YOUTUBE videos for March 2013, some videos may no longer be available but click on the desired image to attempt video play! They're all pretty good and worth a look

So what have our fine upstanding bankers been up to lately? Any news on their latest honourable deeds? Read a summary of the 2013 banking news and be very proud of your bankers!
RBS to compensate customers hit by computer glitch
By Jessica Winch 10:00AM GMT 07 Mar 2013
Customers began reporting problems around 9pm Wednesday evening with cash machines and cards being declined, as well as accessing their accounts online and via telephone.

RBS blamed a hardware fault for the problem and said it was not related to the issues that caused a major computer meltdown last summer.

An RBS and Natwest spokesman said: "We apologise for the disruption our customers experienced last night. All systems are up and running as normal, though any customers with any individual problems should get in touch with us.

"Any customer who was left out of pocket due to this outage should get in touch so we can put things right for them."

It came after a computer meltdown last June left millions of customers unable to make or receive payments.

The technical problems in June cost RBS £175m ($263m) to put right and chief executive Stephen Hester chose to waive his bonus to appease customers

Wednesday's problems left some customers of RBS and its NatWest and Ulster Bank divisions unable to withdraw cash, pay for goods or use telephone and online banking services.

RBS and its subsidiaries NatWest and the Bank of Ulster initially issued apologies about the inconvenience on Twitter at 11.30pm.

People claimed that they had been left stranded, hungry and embarrassed as they were unable to access their own money and had their cards declined.

Dan Marsden, 39, had offered to treat his girlfriend to dinner in Bristol but found himself unable to pay.

Mr Marsden, a Natwest customer for 22 years, was unable to pay by card, withdraw cash or check his online balance on his phone.

"It was just embarrassing," he said. "You take these things for granted."

Mr Marsden spent 30 minutes waiting to speak to a customer advisor at 10pm last night to find out what the problem was. Meanwhile, his girlfriend paid for dinner.

"I'm going to have to make sure I pay next time," he said. "Next time, I'll take cash."

Mr Marsden was also affected by last year's computer glitches, which "made life difficult", but he said he did not plan to switch banks or request compensation.

Charlie O'Brien tweeted: "Yep my card just got declined. Not able to use cash points or online banking £natwest not good at all ....."

She later added: "I had to get my info from twitter! No details anywhere else about whole system being down. Poor show."

Sharri Morris tweeted: “Natwest, you left me with no dinner tonight, and left me walking home in the rain! I'd like some compensation please!

By Graham Hiscott 27 Feb 2013 09:12
Banking giant triggered 4,000 complaints a DAY
The group, rescued by the taxpayer in 2009, received 762,000 complaints in the second half of 2012
Bank giant Lloyds triggered more than 4,000 complaints every DAY in the second half of last year.

The group, which was rescued by the taxpayer in 2009, published figures yesterday showing it received over 762,000 complaints between July and December.

It means the firm, which owns Lloyds TSB and the Halifax, received a massive 1.6million gripes for 2012.

Despite the bumper tally, bosses claimed the firm had made “significant progress” in tackling customer problems.

The data emerged as Lloyds Banking Group gears up to reveal its annual results this Friday.

Most analysts are expecting the firm, 41% owned by the taxpayer, to announce losses of £544million for 2012.

But one expert, Ian Gordon at Investec, thinks it could be as high as £1.4billion.

The losses include a new £1bn provision for payment protection insurance for the final three months of 2012, as exclusively revealed by Your Money. That takes its total PPI estimate to £6.3bn.

The Financial Standards Authority requires all banks to publish their complaints data for the second half of last year on their websites by tomorrow.

Lloyds got in early by releasing its data yesterday, showing that complaints, excluding PPI, fell to 103,735 from 143,740 in the second half of 2011. But it was swamped with a colossal 658,289 complaints about PPI.

That took the total number of complaints on all issues to 762,024 – down from the 860,026 in the first half of 2012, but up from the 493,285 in the second half of 2011.

Martin Dodd, Lloyds’ group customer service director, said: “We’re pleased that our significant progress on customer complaints continued into 2012.

“Over the last three years the number of banking complaints we receive has dropped considerably and on a like-for-like basis, we now receive fewer complaints than any other major bank.”

Lloyds was last week fined £4.3million for dragging its feet on PPI compensation.

The FSA said bosses had broken a pledge to pay customers within 28 days of a ­confirmation letter

Is he suffering from amnesia? Former Lloyds boss claims PPI policies were 'good value' and denies blame for HBOS takeover
By PUBLISHED:09:32, 15 February 2013| UPDATED:09:33, 15 February 2013
Disgraced former Lloyds boss Eric Daniels yesterday launched an astonishing attack on the bank’s customers, blaming bogus PPI claims for pushing up the compensation bill.

Daniels – who is widely blamed for steering Lloyds to the brink of collapse in 2008 – said up to half of claims on payment protection insurance policies were ‘completely illegitimate’.

In a rare public appearance since retiring from the bailed-out bank almost two years ago, the American also insisted yesterday that the bank carried out ‘good due diligence’ on its disastrous takeover of HBOS during the financial crisis.

He told the banking commission of MPs and peers he was ‘deeply regretful’ about customers who were genuine victims of mis-selling, but blamed dishonest claimants for pushing up the compensation bill.

And he offered no apology for the debacle, claiming PPI was ‘good value for money’. He said: ‘In the great majority of cases customers received a good sales process, and received a product that suited them.’

The lender’s £12billion rescue of HBOS in September 2008 led to the collapse of Lloyds and a £20billion bail out from taxpayers just weeks later.

But Daniels, who was encouraged to make the deal by former prime minister Gordon Brown, refused to accept any blame.

He said: ‘I think we did a very good job in due diligence of HBOS. We understood the nature of loans.’ But he added: ‘I don’t think any one would have called the financial crisis.’

The state backed lender has been forced to write off almost £50billion in bad loans made by HBOS since the fateful deal was pushed through

The former Lloyds boss said he had to be ‘careful’ about saying any more, as he and former chairman Sir Victor Blank are facing legal action in the US. They are accused of rushing through the deal and misleading investors’ by reassuring them of the ‘robust capital position’ of the merged banking giant. Lloyds (down 0.27p to 54.61p) won the case last year, but the investors are appealing.

A group of shareholders in the UK, Lloyds Action Now, has also built up a fighting fund to launch legal action against Lloyds.

Daniels told the banking commission he thought the HBOS deal ‘would serve shareholders well over time.’

Despite a strong rally in Lloyds’ share price last year, shareholders are still sitting on a loss of more than £5billion.

Echoing the notorious boast from Goldman Sachs boss Lloyd Blankfein that bankers do ‘God’s work’, Daniels insisted Lloyds ‘was on the side of the angels’ and abided by the City watchdog’s rules.

Panorama - Inside Barclays: Banking on Bonuses

After a series of controversies, bosses at Barclays say they're changing the culture of the bank. Richard Bilton investigates the bonus culture that drove one of our biggest banks

"this is an extreme example of the selfish and self-serving culture that the whole industry has been tagged with since the financial crisis"
By James Salmon PUBLISHED:00:10, 6 February 2013| UPDATED:02:02, 7 February 2013
The ease with which traders at Royal Bank of Scotland rigged interest rates has been laid bare in a series of damning emails.

As the state-backed bank was yesterday fined £390million for its part in the Libor scandal, financial regulators released some of the swaggering messages swapped by its traders.

In messages littered with spelling mistakes, the RBS traders joked about manipulating rates up and down.

A message from one said: ‘can we lower our fixings today please?’.

He was told: ‘make your mind up, haha, yes no probs’. The trader then replied: ‘I’m like a whores drawers’.

The behaviour – described as ‘truly outrageous’ – went on between January 2006 and November 2010, even continuing after the bank received a £45billion taxpayer bailout during the financial crisis.

Revelations that Libor had been repeatedly manipulated by traders stunned the banking world last year and led to the exit of Barclays chief executive Bob Diamond.

Now damning evidence showed how traders at RBS in London were also part of a global conspiracy to manipulate rates. Libor is the key interbank lending rate, used to determine the mortgage and savings rate, and is linked to trillions of pounds of investments around the world.

Indicating how endemic the scandal was, the Financial Services Authority said RBS effectively encouraged rate-rigging, sitting traders next to colleagues responsible for submitting interest rates.

Last night Chancellor George Osborne promised those responsible would face the ‘full force of the law’. RBS chief executive Stephen Hester said he was ‘disgusted’, adding: ‘What is profoundly depressing is this is an extreme example of the selfish and self-serving culture that the whole industry has been tagged with since the financial crisis.’

But he refused to resign or hand back a £1.5million bonus from 2010, despite taking the helm in November 2008.

RBS was hit with £300million in fines from the US Department of Justice and the Commodities Futures Trading Commission and an £87.5million fine from the FSA. It dwarfs the £290million fine slapped on Barclays last summer.

Swiss bank UBS was hit with a £940million penalty in December.

the Timeline of Shame

Regulators have already imposed £1.7bn of fines on a string of the world's biggest banks, while police are pursuing criminal investigations into staff involved in rigging the rates to suit their employers.
2005
Between January 2005 and June 2009, Barclays derivatives traders made a total of 257 requests to fix Libor and Euribor rates. Initially, traders sought to inflate the bank lending rate to boost profits – and their own bonuses.

2007
After Northern Rock collapses, Barclays submits artificially low rates to give a healthier picture of its ability to raise funds.

In a phone call in December, a Barclays employee tells the New York Fed that the Libor rate was being fixed at a level that was unrealistically low.

2008
In April the New York Fed queries a Barclays employee over Libor reporting.

The Wall Street Journal publishes the first article questioning the integrity of Libor.

Following the WSJ report, Barclays is contacted by the British Bankers' Association over concerns about the accuracy of its Libor submissions.

Later in the year, the Fed meets to begin inquiry. Fed boss Tim Geithner gives Bank of England governor Sir Mervyn King a note listing proposals to tackle Libor problems.

2009
A year on, the BBA issues guidelines for setting Libor rates.

2010
In June, Barclays makes first effort to clamp down on Libor manipulation in email setting out standards of behaviour.

2011
Royal Bank of Scotland sacks four people for their alleged roles in the emerging Libor-fixing scandal.

2012
22 June Barclays chief executive Bob Diamond learns of emails sent by dodgy traders. He later says reading them made him feel "physically ill".

27 June Barclays admits misconduct. Regulators fine it £360m.

29 June Diamond insists he will not resign.

July Barclays chairman Marcus Agius and Diamond resign, followed by chief operating officer Jerry del Missier.

The prime minister, David Cameron, announces a review of the banking sector, sets up Banking Commission. Serious Fraud Office (SFO) launches a criminal inquiry into Libor manipulation.

Deutsche Bank confirms that a "limited number" of staff were involved in the Libor rate-rigging scandal. It clears senior management. SFO arrests three men in connection with investigations into Libor.

Swiss bank UBS is fined £940m by US, UK and Swiss regulators.

2013
January Barclays' new boss, Antony Jenkins, tells staff to sign up to a new code of conduct – or leave the firm – in clean-up operation.

February RBS is fined £390m by UK and US regulators. RBS reduces bonus pot by £300m.

Antony Jenkins was the belle of the ball after declaring he was "shredding" the legacy bequeathed to the bank by former chief executive Bob Diamond at a hearing of the Parliamentary Commission on Banking Standards.
James Moore Tuesday 05 February 2013
The trouble is, talk like that is cheap unless it is backed up both by action and a genuine change in thinking. Whether the thinking at Barclays has really changed all that much is open to question. Last week Sir John Sunderland, the chairman of Barclays' remuneration committee, declared that even with the benefit of hindsight he would still have paid Mr Diamond a bonus for 2011. [Bob Diamond took home £17 million in 2011.]

This was the year in which the bank missed Mr Diamond's own targets and moved him to describe the performance as "unacceptable". What we also now know – with hindsight – is that regulators were at the time uncovering attempts by traders at Mr Diamond's investment bank to fix Libor interest rates.

If you need to remind yourself about just how sickening their behaviour was, go back and read the final decision notice of the Financial Services Authority. And it hasn't been the only scandal to emerge.

For Sir John to make such a statement is fairly incredible in itself, but it needs to be seen in conjunction with his performance. He spoke to the Commission's members as if they were errant schoolchildren who didn't know what they were talking about. It was an astonishing display, and an example of the sort of thinking in banking which has brought us to the current state of affairs.

And yet, after initially saying he didn't want to talk about "history", Barclays' chairman, Sir David (they do like their knighthoods at the top of Barclays) Walker, basically said Sir John was a jolly good chap doing a tough job well.

He also resorted to the tired old line about there being an international market for top British executives (it's scarcely borne out by the facts) and the importance of paying up to recruit and retain top talent. Top talent like Mr Diamond? Not to mention a long list of failed banking executives, some of whom make Mr Diamond seem like a paragon of virtue, and all of whom were held up as being uniquely talented people who might be lured abroad if their employers didn't pay.

Sir David has been sold as a new broom, a man capable of fresh thinking and of helping Mr Jenkins to turn Barclays into the first-class bank which it still has the capacity to be.

I've no doubt that he believes what he says when he talks about the need for reform. But his display suggests that his thinking isn't as far removed from the leading lights of a banking industry that was dashed on the rocks of its own hubris in 2008 as we might have hoped.

RBS investment chief John Hourican to resign and waive £4m bonus
The head of Royal Bank of Scotland’s investment banking arm is set to give up a bonus pot worth £4m as he resigns from the lender over its involvement in Libor-rigging.

By Helia Ebrahimi, and Harry Wilson 7:23AM GMT 06 Feb 2013
John Hourican, chief executive of markets and international banking, will leave the bank with the minimum pay-off to which he is entitled – a year’s basic salary of £700,000 – as he becomes the most senior executive at the taxpayer-backed lender to leave his job in the wake of the rate-rigging scandal.

Mr Hourican’s departure is expected to be announced to RBS staff as the bank publishes details of a settlement of around £400m over accusations it manipulated key global borrowing rates between 2005 and 2010. It is not known whether the bank will admit any liability.

The Irish banker is expected to forgo share awards worth £4m as part of a series of moves by the bank intended to defuse public anger, that will also see about £250m deducted from RBS’s bonus pool.

RBS said in a statement on early on Wednesday that it was in late-stage talks with the Financial Services Authority, the US Commodity Futures Trading Commission and the US Department of Justice to settle the Libor allegations.

Although the settlements remain to be agreed, RBS expects they will include the payment of significant penalties as well as certain other sanctions. RBS will update the market on all pertinent issues relating to this matter shortly," the bank said.

Cable Says RBS Sell-Off ‘Now Looks a Distant Dream’
By Robert Hutton - Feb 6, 2013 10:58 AM GMT.
U.K. Business Secretary Vince Cable said that privatizing Royal Bank of Scotland Group Plc “now looks a distant dream” and again urged that the stock be given away to taxpayers.

Cable made the point as he attacked banks for still failing to lend enough money to small and medium-sized businesses and urged them to publish lending data broken down by local area. He has also written to the Bank of England asking it to look at why its Funding for Lending program is better at getting money to mortgage borrowers than companies

On RBS, which the previous Labour government paid 45.5 billion pounds ($71 billion) to rescue in 2008, Cable said the coalition administration of which he’s a part has inherited “responsibility without control.” The government paid the equivalent of 502 pence a share for about 81 percent of the lender, meaning taxpayers are sitting on a paper loss of 14.5 billion pounds. The shares were 0.6 percent higher at 339.60 pounds as of 10:45 p.m. in London today.

“The early hope of reprivatization, however, now looks a distant dream, unless at an unacceptable loss,” Cable said in a speech at Bloomberg’s European headquarters in London. “Recapitalization may be the best solution, but it is currently impractical; full nationalization would cost the taxpayer billions.”

Instead, Cable repeated an idea first floated in 2011 by the leader of his Liberal Democrat party, Deputy Prime Minister Nick Clegg, of giving RBS stock away to registered voters.

‘Eventual Recovery’

Under this plan, Cable said, the public “can benefit from the upside of eventual recovery in share prices, while professional managers run the bank with a long-term mandate which includes a commitment to assist national recovery through expanded small and medium-sized enterprise lending.”

RBS facing fine of up to £500m for LIBOR fixing scandal
By Scott McCulloch Feb 6 2013
John Hourican, who heads the banks investment banking arm, is to step down in wake of the scandal

Royal Bank of Scotland (RBS) has announced John Hourican, head of its investment banking division, is to step down in the wake of the LIBOR fixing scandal.

RBS is expected to face criminal charges and a fine of around £500 million for its role in rigging the The London InterBank Offered Rate (LIBOR), the benchmark rate banks borrow from one another which also sets the price for lending.

Banking trade body the British Bankers' Association calculates LIBOR by polling banks daily for their estimates on inter-bank borrowing costs over set periods and in different currencies.

The rate is then calculated from the average rate after excluding the top and bottom quotes and is published before noon each trading day in individual currencies.

The LIBOR rate governs the price of more than 500 trillion US dollars-worth of loans and transactions around the world, including household mortgages.

Hourican will leave the bank at the end of the month and receive a parting gift of a year's salary in lieu of notice, worth around £700,000, Sky News reported last night.

He was also asked by the bank's board to forfeit the £4 million he is owed in shares, the news channel said.

A settlement with UK and US regulators is expected to be announced later today and Hourican is widely expected to shoulder the blame for RBS's role in rigging LIBOR, though he is not believed to be directly implicated.

Hourican has headed up RBS's wholesale bank since the group's 2008 bail-out and has overseen a restructuring of the division which has led to 10,000 jobs being slashed so far.

Chancellor George Osborne said this week RBS would have to cut bankers pay to ensure the public was not left to pay the US regulator portion of the fine levied at the bank.

He said: “When it comes to RBS, I am clear that the bill for any US fine related to this investigation should on this occasion be paid for by the bankers, and not the taxpayer.”

The fine expected to be levied by the UK regulator the Financial Services Authority is expected to be in the region of £90 million.

Barclays Bank was fined £290 million last year for its involvement in LIBOR fixing.

Barclays chief executive Bob Diamond, who had previously headed up Barclays' investment banking division, was forced to resign just days after the fines were announced.

The Serious Fraud Office (SFO) formally launched an investigation into rate rigging in July of last year.

Barclays boss Antony Jenkins gives up '£1m' bonus
Nick Goodway Friday 01 February 2013
Barclays chief executive Antony Jenkins is to waive his bonus for 2012 after a “very difficult” year for the scandal-hit bank.

The bank which has been hit by the Libor-rigging scandal and allegations over its 2008 fund raising backed by Middle East sovereign wealth funds said Jenkins had told the board he would not take a bonus.

Only days ago there were reports that Jenkins could recieve a bonus of £1 million on top of his £1 million salary.

Jenkins said: “I am aware of considerable speculation about, and public interest in, the question of whether I will be awarded a bonus in respect of my performance in 2012.

“To avoid further unnecessary public debate on this matter, I wish to make clear that I concluded early this week that I do not wish to be considered for a bonus award for 2012 and I have communicated that decision to the board.

“The year just past was clearly a very difficult one for Barclays and its stakeholders, with multiple issues of our own making besetting the bank. I think it only right that I bear an appropriate degree of accountability for those matters and I have concluded that it would be wrong for me to receive a bonus for 2012 given those circumstances.” Jenkins’ predecessor Bob Diamond took home £17 million in 2011.

Barclays worst for card fraud repayment
Barclays and Barclaycard customers were the least likely to be reimbursed straight away, with nearly four in 10 (39%) of card fraud victims having to wait longer than a week to get their cash back.
24 January 2013 Evening Standard
Nearly one third of card fraud victims have been forced to wait weeks or even months to get their cash back, despite obligations on banks to refund them immediately, a consumer group has found.

Some 29% of Which? members who had suffered credit or debit card fraud said they had experienced delays getting a refund

One in 12 Barclays/Barclaycard customers who fell victim to card fraud had to wait between two and six months before they received a refund, Which? found.

Even First Direct, which came out best in the survey, delayed refunds to 17% of customers, Which? said.

Some 98% of fraud victims surveyed eventually got their money back, suggesting that the overwhelming majority of cases were valid.

Under the Payment Services Directive, if someone is a victim of fraud, the bank must refund them immediately unless it has good grounds to suspect that the cardholder has been negligent or acted fraudulently.

Which? executive director Richard Lloyd said: "Our research shows that banks are too often failing to refund customers immediately when they have been victims of fraud.

"With £340 million lost to card fraud a year, there are large sums at stake that can leave people seriously out of pocket and unable to pay essential bills."

Mr Lloyd said that banks should be doing everything they can to help people who fall victim to fraud "through no fault of their own".

Last October, chief ombudsman Natalie Ceeney said that too many cases were being brought to the ombudsman service where banks or card providers had failed to investigate a fraud just because the correct Pin number was used with the card.

On its own, the use of the correct Pin is not enough to prove the cardholder was complicit in the fraud or negligent under the regulations.

FOS: Banks' PPI payouts 'nowhere near' profits
The Financial Ombudsman Service says compensation payouts for payment protection insurance are “nowhere near” the profits banks made from the product
31 January 2013 2:55 pm | By Samuel Dale
Speaking to the Parliamentary Commission on Banking Standards today, FOS chief executive Natalie Ceeney said banks made far more money from the products than they are paying back in redress.

The current total amount set aside by banks stands at around £12bn but some have predicted it could hit £25bn.

Last month, the FSA said it was in talks with the British Bankers’ Association about imposing an April 2014 deadline on PPI claims.

Ceeney said: “Even the redress that has been repaid so far doesn’t come anywhere near the profits made over PPI.

“It is certainly true that if they tackled this earlier the bill would be far lower, without doubt. One of the disappointing factors for us is that this has been a long period of prevarication where they thought that if they could kick it into the long grass it would go away. Unfortunately there is now a big bill that needs to be repaid.”

Lord Andrew Turnbull said banks’ own ”idiocy” stopped earlier payouts, while Labour MP Pat McFadden slammed the “ludicrous” timescale for PPI compensation

Cut bankers' pay or risk another crash, IMF chief tells financiers
Christine Lagarde uses World Economic Forum speech to attack gap between rich and poor
Ben Chu | Davos | Thursday 24 January 2013
Christine Lagarde, the managing director of the IMF, has warned that "corrosive" inequality was hindering the world's economic recovery.

In a combative speech to an audience of some of the world's wealthiest financiers at the World Economic Forum, Ms Lagarde said that bankers' pay should be cut to close the gap between the rich and poor. "Excessive inequality is corrosive to growth; it is corrosive to society. I believe that the economics profession and the policy community have downplayed inequality for too long" she said.

Ms Lagarde, a former French finance minister who was appointed head of the International Monetary Fund in 2011, added that it might be necessary for nations to impose minimum wages in order to reduce income gaps.

"I believe policies such as robust social safety nets, extending the reach of credit, and – in some cases – minimum wages can help" she told the audience of business and political leaders in the Swiss ski resort of Davos. Ms Lagarde also warned that necessary reforms of the multinational banking sector, which plunged the Western world into recession in 2008-09, were being watered down by industry lobbying.

"We can already see too many signs of waning commitment – dilution of reforms, delays in implementation, inconsistency of approaches. And we can see the risks – a further weakening in capital and liquidity standards; and not enough progress on key areas like cross-border resolution, shadow banking, and derivatives" she said.

Barclays Wealth division 'out of control', says secret report
Barclays has moved swiftly to part company with a senior executive after investigators alleged that he shredded a highly critical analysis of the maverick culture and bullying at the bank's one-time flagship Barclays Wealth business.

By Roland Gribben
9:00PM GMT 20 Jan 2013

Andrew Tinney, chief operating officer at the £180bn business, has resigned following an inquiry into the "shredgate" affair and allegations that he misled senior management about the existence of the report before finally confessing last month. Barclays said he left without any pay-off. His pay and perks package is estimated to have been worth £4-£5 million a year.

The latest scandal has infuriated the top management and influenced Antony Jenkins, group chief executive, in issuing last week's warning to staff to either observe a tougher ethical code or pack their bags.

Mr Jenkins has embarked on an ambitious programme to repair the damage caused by the resignation of his predecessor, Bob Diamond, over the Libor rate-fixing issue and made it clear that he wants to achieve rapid change.

Mr Tinney's role was central to the inquiry carried out by lawyers Simmons & Simmons after a whistleblower told Marcus Agius, the former chairman, about a "secret" audit into the Barclays Wealth culture.

Questions are also being asked about the role played by Tom Kalaris, the head of the business. Mr Kalaris and the Wealth board, including Mr Tinney, called in consultants Genesis Ventures to review the London and New York-based operation after regulators questioned irregularities. They asked for a follow up cultural audit after an initial report from Genesis identified weaknesses and recommended a course of action

Genesis drew heavily on the views of disenchanted managers in reaching the conclusion that the business was "out of control", had bred a culture of fear and intimidation, was hostile to complying with banking regulations and ignored or buried problems.

Mr Tinney is alleged to have kept the report secret because he regarded it as an "uncalibrated" input into changes at Barclays Wealth. He is said to have had the only copy delivered to his home in Surrey before shredding the material.

During an investigation, Mr Tinney is said to have claimed to Mr Kalaris that there was no such report. Mr Kalaris repeated that account in a note to Mr Jenkins.

PPI mis-selling scandal is getting even worse.
Richard Dyson 5 January 2013

Such customers either give up their complaints or take them to the Financial Ombudsman Service, where, inevitably, the bank is found at fault.

The PPI scandal goes back more than a decade, with policies being sold alongside most loans and many credit cards. It was supposed to cover monthly repayments if the borrower fell ill or lost their job.

The problem was that policies were in many cases unsuitable because the borrowers were self-employed, already out of work or unable to claim for another reason. The insurance was also hugely costly, in some cases doubling the loan cost, pushing some borrowers, who could only just manage their repayments in any case, into serious financial difficulty.

Until 2011 banks denied the scale of the problem and refused wholesale compensation. But after losing a key court case, widespread refunds commenced last year. During 2012 banks admitted the problem could cost as much as £12billion to put right, making this the worst ever mis-selling scandal.

But at the same time, banks said that many of the complaints they received were opportunistic or groundless ‘ambulance-chasing’. There was some sympathy with this view, especially in light of the behaviour of unscrupulous claims management companies that bombarded countless people with billions of text messages promising compensation.But now the FOS, which arbitrates on complaints that banks have already rejected, says its workload is growing rapidly, with 1,000 new cases taken on daily.

More significantly, the FOS continues to find against the banks and in favour of the customers in an average seven out of ten cases. With some banks, such as Lloyds, it is almost 100 per cent.

"Greed is good"
Goldman Sachs accused of ‘lack of sensitivity’ after it raises average pay 5% to £250,000 a year
By James Salmon PUBLISHED:00:03, 17 January 2013| UPDATED:07:42, 17 January 2013 Goldman Sachs was accused of a ‘lack of sensitivity’ last night after handing out average pay and perks of £250,000 – a rise of 5 per cent.

A pot of £8.1billion will be shared among its 32,400 staff – including 6,000 in Britain – after profits soared 70 per cent to £4.7billion last year.

The huge award, which would take the average worker in the UK almost 10 years to earn, comes despite growing calls from campaigners and politicians for banks to show more restraint on pay.

Critics said the ‘spirit of Gordon Gekko is alive and well’ at the bank, referring to the notorious trader portrayed by Michael Douglas in 1980s film Wall Street who infamously boasted that ‘greed is good’.

News of the rise comes after Goldman was forced into a humiliating climb down this week over plans to delay paying its bonuses until after April 6, when the top rate of tax is cut from 50p to 45p.

The U-turn came after Bank of England governor Sir Mervyn King branded the idea ‘depressing’, accusing the bank of ‘lacking care and attention’ to the rest of society.

The world’s most powerful investment bank, which earned the nickname ‘Golden Sacks’ over its sky-high pay and perks, reaped the rewards as its profits soared 70 per cent to £4.7billion last year

European Commission President Jose Manuel Barroso has denied that the European Union was behind the tough austerity measures that have swept the continent in recent years.

"The cause of the difficulties some countries are facing is excessive public debt created by national governments and irresponsible financial behaviour"

"I want to make this clear because there is a myth that it is the European Union that imposes difficult policies. It's not true," Mr Barroso said.

"The cause of the difficulties some countries are facing is excessive public debt created by national governments and irresponsible financial behaviour, that also accumulated excessive private debt including financial bubbles that happened under the responsibility of national supervisors," he added.

"This is why now countries have to make painful adjustments. Britain is having a very tough budget and Britain is not a member of the euro."

Alex Gore and Larisa Brown 10 January, 2013
Senior Lloyds banking executive 'forced out'

• Stephen Clements told a tribunal he had raised the issue with his boss

• But he claims he was told to 'burn the paper it was written on'

• 51-year-old said there was deliberate cover-up due to cost of fixing problem

• He said he discovered the bank's back-up IT system was vulnerable

• The father-of-three is suing the banking group for £1m of lost earnings

Stephen Clements, 51, the former head of the business continuity at Lloyds Banking Group, alleges there was a deliberate cover-up to stop the flaws being dealt with due to the cost of repairing the problem and the potential damage to the bank's reputation.

Mr Clements claims he discovered 'startling' failures in the bank’s IT Disaster Recovery back-up system that left the bank vulnerable to failures that could bring it down.

The problems were so severe they threatened to 'destabilise the British economy', it was said today.

But he said that when he tried to flag up the worrying deficiencies to his boss last March he was told to 'burn the paper' it was written on and the issue was effectively buried.

Mr Clements says he was forced from his job as the senior executive in charge of protecting Lloyds’ systems from crises just four months after raising his concerns.

He had already been warned he could be moved to another post, and he alleges the unwanted move was because of his age and the boss’s desire to replace him with a woman. The bank denies his allegations.

The father-of-three from Bristol, who earned £130,000 a year in pay and benefits, is suing the bank for £1 million in lost earnings. He alleged whistleblowing and sex and age discrimination.

In documents submitted to the Central London Employment Tribunal, the 51-year-old said he was 'startled' to discover that only a third of the bank’s systems had undergone crucial testing, leaving 'very serious gaps in our ability to recover critical IT systems'.

Mr Clements said the failure to undertake the risk assessments could have a potentially catastrophic impact on the country’s economy.

He said the impact would dwarf a similar glitch at the Royal Bank of Scotland (RBS) last June that left millions of customers unable to access their accounts

Robert Peston 10 January, 2013
Royal Bank of Scotland is in the last delicate phase of negotiations with regulators in the UK and US on the fines to be paid for its Libor transgressions and other necessary remediation, including a possible senior resignation.
What is clear is that UK and US fines will run to several hundred million pounds, or more than the £290m extracted from Barclays.

What is as yet undecided is whether RBS will be punished on a similar scale to UBS, which was spanked to the tune of £940m. My understanding is that RBS believes its fines will be less than UBS's.

RBS is braced for substantial humiliation as and when the announcement is finally made.

Emails from traders cited as evidence for the Libor rigging are particularly lurid, according to sources.

Also, the market manipulation continued well into 2010, or long after RBS's management was replaced at the end of 2008 following the collapse of the bank and its partial nationalisation. RBS's board did not become aware of the wrongdoing until notified about it by regulators in 2011.

That said, I have learned that the bank's board does not believe the chief executive Stephen Hester needs to resign: no evidence has been found indicating that he knew about the attempt to make unfair profits by fixing the Libor rates; and he was fully occupied at the time trying to rebuild the bank's shattered finances.

The Co-operative Bank was punished by the regulator today after it delayed valid claims for payment protection insurance (PPI) compensation "for no good reason".
Vicky Shaw Friday 04 January 2013

Despite the warning, the Co-op put in place a policy that was likely to lead to complaints not being dealt with properly during the legal proceedings, the FSA said.

The Co-op admitted that it had not lived up to its reputation for "doing the right thing" by customers in this instance, but said it is confident that there will be no repeat of the delays.

The complaints were held back between January 21 2011 and May 9 2011, before the conclusion of an unsuccessful High Court challenge by the British Bankers' Association (BBA) over FSA measures regarding PPI complaints.

The BBA confirmed in May 2011 that it would not appeal against the High Court's decision that rules relating to the mis-selling of PPI could be applied retrospectively.

The regulator had sent out a letter to the industry in January 2011, warning firms that they risked enforcement action if they failed to treat complaints fairly. The letter said that many claims should continue as normal during the legal proceedings.

The FSA said that it had examined a sample of the complaints that the Co-op had put on hold - and found that 100% of these cases could have been progressed.

While no one suffered any extra financial loss as a result of the delays, a significant number of people had to wait for longer for their complaints to be cleared up, the FSA said.

Tracey McDermott, the FSA's director of enforcement and financial crime, said: "While nobody suffered any financial loss, Co-op's actions meant that a significant number of people had the resolution of their valid complaints delayed for no good reason.

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