Saturday, 30 June 2012

Time to hold the finance industry to account.

Have you, like me got a feeling that we have been treated as mugs by the finance industry for far too long, and that politicians were acquiescence to their wrongdoing.

As I said a few days before this is far more than just Bob Diamond alone. The latest scandal to hit the big banks (you remember vital to saving SME's) is selling complex products to, as the FSA puts it 'non-sophisticated' customers.

Not forgetting the Libor fiasco, which now transpires that Mervyn King, Bank of England Governor, wanted reformed back in 2008 but the British Banker's Association said no (Hat Tip The Times). Noticed how quiet they have become these days?

There's also the miss-selling of insurance products, endowment mortgage's, lack of investment in IT, the infamous RBS computer crash to name just a few...and you get a definite feeling that it's far more than Bob Diamond alone.

In essence the whole culture and practices of the finance industry need to be called into question, and that will not be achieved by a narrow inquiry into the setting of the Libor rates. We know what went wrong there, to paraphrase TV it was 'When Self Regulation went bad'. I suppose a similar reason for setting up the Leveson Inquiry, that self regulation of the newspapers had also gone wrong.

So please sign the following e-petition:

Public inquiry into wrongdoing and ethics of bankers

"We the undersigned call for an independent, judicial public enquiry into fraud, wrongdoing and ethics of British banks, their management and their staff, and the role of the British Bankers Association. The terms of reference of this inquiry should also include the manipulation of interest rates on about £225 trillion of assets. The inquiry must have full powers to compel witnesses to appear on oath, and to obtain all forms of evidence."

Though, we cant escape blame totally either; whilst we may have been oblivious to the full scale of their shenanigans, we nevertheless were all to happy to have free banking, plenty of credit and buy now pay later deals. We all went on a big spending spree.

As we are kept being reminded UK public debt is nearly $2 trillion. But consider this - according to CIA Factbook the UK total public and private debt owed to nonresidents last year was $9,836,000,000,000. That's nearly $10 trillion (or $158,611 per person living in UK) compared to USA total external debt of $14,710,000,000,000.

I cant really get my mind around such numbers, one thing for sure we cant carry on as we are. We may have to pay for banking services in the future, credit may be more expensive, but if this means a more stable economy so be it.

To paraphrase Sir Winston Churchill, this is not the end of the consumerism. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.


kp said...


If you are daft enough to get conned you deserve to get conned. Simple!

Anonymous said...

What utter rubbish, kp.

These folks have got form, and anyone with a clue can see it.

Have a listen to this week's BBC R4 Moneybox coverage of "interest rate swap" mis-selling. When a small business takes out a loan, the banksters offer to protect the punter from changes in interest rates, by selling them "interest rate change protection" which was about as useful and about as well explained as the "payment protection insurance" which has cost bank customers (but not banksters) hundreds of millions of pounds of compensation.

And before there was PPI, there were "endowment mortgages". Did you ever try asking a mortgage provider for a yes or no answer to the question "is the endowment guaranteed to be big enough to repay the mortgage". I did, but as they refused to answer honestly, I chose a repayment mortgage with a different provider instead.

If I'd taken the endowment, the contract would have told me in the small print on page 37 (honest) that half the first five years repayments are not used to repay the loan, they go direct to commission for the seller of the endowment.


mairede thomas said...

Most of us wanted to believe in fairytales and those few who were not so gullible had the last laugh. The Masters of the Universe will do their best to hang on to the dosh and their power - plus ca change.