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RBS: big losses, big bailout

Robert Peston | 07:56 UK time, Thursday, 26 February 2009

Royal Bank of Scotland has not only announced the biggest loss in British corporate history - but it's also being shored up in what some will see as Britain's biggest ever bailout.

Royal Bank of ScotlandThe Treasury has announced that we as taxpayers will provide insurance to Royal Bank against future losses on £325bn of loans and investments.

First losses of up to £19.5bn on those impaired assets will be taken by Royal Bank.

But to prevent the losses wrecking the bank, we as taxpayers will be injecting up to £19bn of new capital into it, in the form of non-voting shares.

Also, losses greater than £19.5bn will be born by us - by taxpayers. In a prolonged severe recession, those losses could be substantial.

What we're getting in return is a £6.5bn fee - in the form of yet more of these non-voting shares.

And RBS has given a legally binding commitment to increase lending by £25bn in 2009.

We already own 70% of Royal Bank - and that stake could rise to a maximum of 75% after today's deal with the Treasury.

So it matters that Royal Bank becomes a profitable bank again.

Its new chief executive, Stephen Hester, announced RBS would be reducing its running costs by more than £2.5bn a year.

I put to him on the Today Programme that this would lead to job losses around the world of more than 20,000. His non-denial was that job cuts would be substantial.

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Or to put it another way, in rebuilding this pillar of our economy there'll be pain for employees and possibly for taxpayers.

UPDATE, 11:56AM: Here are a few additional thoughts about the mother of all banking bailouts.

First, the total injection of capital by shareholders - that's including the £20bn we subscribed in October - looks set to hit £39bn.

That's a colossal amount of our money at risk - although in theory we could make a profit on it in a few years if Stephen Hester were to succeed in mending RBS and in flogging our shares back to the market (but to state the bloomin' obvious, the value of shares can go down as well as up).

It is of course reassuring for us as taxpayers that Royal Bank's share price has risen very sharply this morning, as we own 70% of the ordinary shares (and, as I've explained, that stake could rise to 75%).

But there's probably a ceiling through which the existing ordinary shares will struggle to break for some years, because of the pre-emptive rights over dividends of the new B shares that are being issued to the Treasury (to taxpayers).

As for the potential hit that could be taken by taxpayers on the massive insurance policy we've written, that's anyone's guess.

If there were - say - losses of 10% on the insured loans and assets, our share of that loss would be just under £12bn. Or rather more than the £6.5bn fee we're being paid.

So let's hope the rescue of Royal Bank - and the similar underpinning of Lloyds that's expected tomorrow - has the virtuous consequence of limiting the depth of the recession and thus feeds back to the banks in a positive way, in the form of reduced losses on loans.

And since we're on to Lloyds, it would be wrong to assume that the Treasury will insure its loans on identical terms to those provided to Royal Bank.

My understanding is that the government views the corporate loan book that Lloyds acquired when it bought HBOS as more poisonous than most of the assets it has insured at Royal Bank.

Which means that Lloyds may well have to pay more to taxpayers - to you and me - for the life-preserving protection we're giving it on around £300bn of ill-judged loans.

Comments

Page 1 of 4

  • Comment number 1.

    I hope the government stops messing about and just nationalises the thing. RBS is a proverbial dead horse!

  • Comment number 2.

    Ooooooo so insurance of potential losses of up to £325Bn and an injection of £19Bn and they agree to lend back to us £25Bn?

    Well got to fund those £650,000 per year pensions from 50 somehow.

    And it is no good saying "well it is in his contract and it was voted by the shareholders" well, let the shareholders who voted in this insane benefits package pick up the tab.

    This is the guy that made the decision to buy ABN which is by far the overall chunk of the losses.

    Won't reward failure I think someone said.

  • Comment number 3.

    You have got to hand it to Goodwin he is the textbook on how to look after number one, he must be laughing at everyone.

    Pay yourself loads whilst the going is good then when it all goes wrong and the business is literally going bust the next day (and you would loose your mighty pension) get the Government to guarentee the gross pension you awarded yourself when times were much better.

  • Comment number 4.

    The FSA always had the power to reduce, if not eliminate, the excesses that led to this - by making the capital-adequacy requirements steeper for risky business activities. Just as they are going to do now, belatedly, several years after the horse has bolted.

    And now it's in the open as to why they didn't do this before, as you & Nick Mason reported yesterday. It was political guidance from Blair and Brown.

    May we hope that this time the chickens have truly come home to roost ?

  • Comment number 5.

    It's a real pity you didn't ask Hester about the real situation relating to Deripaska and the Russian mafia: it appears to be almost exactly the same size as the loss announced. Instead of shooting at 6.4 billion, you shot at the obvious crowd-pleaser of 6.4 million, and still quite predictably missed by a country mile.

  • Comment number 6.

    It just gets sillier and sillier, doesn't it?

  • Comment number 7.

    Well it was all expected. we knew what was coming,
    I fail to understand what RBS was doing when they were supposed to be Banking.....it certainly was not looking after our money nor our shares, and because they chose to get themselves into this much trouble we the taxpayers have to bail them out, we should have let them go bankrupt, then allowed another company to come in and purchase there assets at a knock down price and take them over, pay off 100000 staff and restart the RBS as a BANK, instead of the disgraceful sham it is today.

  • Comment number 8.

    Robert

    Can you put the lie to the so called 'insurance' scheme.

    'Insurance' is about shared risk -- any pay out is supposed to be funded from the premiums collected.

    Premiums have to cover the expected pay out.

    Where are the premiums coming from to cover these Banks losses?

    If they are coming from the Banks, then they are no better off!!

    If the payout comes from the taxpayer, then is isn't insurance, it is a gift - not even a loan, investment or anything like that - it is a gift.

    Please don't give it the dignity of the moniker 'insurance', it is no such thing.

  • Comment number 9.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 10.

    "RBS is a proverbial dead horse!"

    The market obviously doesn't think so RBS shares are up 20% already this morning.

  • Comment number 11.

    One other item announced by RBS today:
    Nathan Bostock joins RBS from Abbey, where he was Chief Financial Officer for the last 3 years. He was previously in their Treasury, and before that, RBS' Director of Group Risk Management, Treasury and Capital Markets. It was a direct result of the weaknesses left in the system during that period that RBS managed to dig the hole it's in today, to quote from his Abbey CV: "During his years with RBS, Nathan was responsible for re-designing the Group's risk management strategy and the integration of the capital markets business from the sale of Charterhouse Bank."

    Hester is hereby renamed Brother Fester.

  • Comment number 12.

    Well,the fateful day is upon us.What a scandal.RBS is allowed to dump 325billion into a "park and ride"scheme that nigh on guarantees they will not be accountable for almost 95% of these suspect toxic assets.Just what are these assets ??? How can they have been allowed to get in it so high ? Presumably they didn't just occurr overnight.Clearly RBS got way too big for its boots........with personal ambition taking precedence over common business sense.Blame FG for a fair proportion of this but equally blame Sub-Prime Minister Brown for leading us down this dark tunnel.He,as tenant of the Chancellory and Sub PM will go down in history as the most damaging person in the UK's economic history.

    And still RBS claws cash from the taxpayer........it's not over yet.Apparently they are going to lend 25billion of our own money back to us-Great News.

    We should have allowed RBS to rot in its own stinking pile of debt-As it is every man,jack will feel the pain of this for years to come.GB you are a disgrace.You should resign.

  • Comment number 13.

    I would recommend refusing to pay Fred Goodwin's £650,000/year pension and let's seen if he dares to take the bank to court.

  • Comment number 14.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 15.

    Presumably this is not a unique case. but just the "industry standard".

    How many more of the former "masters of the universe" and other bankers have made such arrangements?

    It is too easy to assume Goodwin is just a one-off exceptional mixture of incompetence and avarice. The problem is systemic so, come on, Robert, dig out the facts: how widespread are the pension pots that run into many millions? How many of Goodwin's ilk are already drawing such penions and how many more, at the taxpayers' expense, are in line to do so?

  • Comment number 16.

    Robert,

    At what point will someone in the media ask Gordon Brown to do the honourable thing by taking responsibility for the mess(The architect of the FSA). He is clearly out of his depth and should resign immediately. We need a Govt of national emergency of "all the talents" to get us through this.

  • Comment number 17.

    let the plebians
    eat the losses
    they're suckers

    more cake sir fred?

  • Comment number 18.

    The real damage is that this revelation will further alienate and anger the great British public, especially as it was left to the media to tell us about it. Our present batch of so called leaders are way out their depth as demonstrated by their pathetic attempts to conceal embarrassing information rather than face up to it decisively. Far be it from me to praise dear Maggie, but she had more balls than any other leader since Churchill and if she were in charge at the present time she would definitely not be sitting in a corner wringing her hands and whimpering, trying to keep the lid on things. They’ll never get us through this until they realise the importance of getting the electorate on their side and, at the present time, that is obviously regarded as an irrelevance.

  • Comment number 19.

    So as I see it.You run a bank,get too big for your boots-all unregulated.You lend vast amounts of money that you don't have into dodgy assets-unregulated.You then lose 24billion whilst parking a further 325billion of toxicity in the lap of the taxpayer,raise more cash from the taxpayer and then start lending this back to the taxpayer-all with the blessing of Sub PM Brown.Oh,and by the way-somewhere along the line-your CEO gets knighted and "rewarded"with a 650k/year pension.It all makes sense now.....of course,I should have understood this is how UK plc is run these days.Silly me.

  • Comment number 20.

    Robert,

    I can remember at the time of the collapse of Enron and WorldCom, smug comments from the City about "Oh this could never happen here! The non-executive directors of a British company would prevent someone like Ken Lay or Bernie Ebbers becoming too dominant in the firm!" Well doesn't RBS show up how stupid those statements were?! OK there's is a difference in that we're not talking about fraudulent behaviour but again a single person was allowed to go unchecked and unquestioned in a firm. Fred the Shred used to hold sessions which RBS staff called "Morning Prayers" at which he would berate executive who he felt were underperforming. He was clearly just a bully who got drunk on his own self-importance. What did RBS's non-execs do to curtail him? Why didn't they object to the folly of the ABN-Amro deal? The guy who was on 5 Live with you this morning said that RBS had some serious city players on it's board but they were either cowed or awed by The Shred and left him unchecked. Isn't one of the lessons of this debacle that the whole system of corporate governance needs to be overhauled so as to prevent a single person becoming so dominant?

    As regarding his obscene pension, well why didn't the government address this when they required The Shred to step down? Or where they too busy worrying about Glenrothes?

    We have a right to the answers Robert!

  • Comment number 21.

    Re Number 16

    A Government of all the talents. Only one problem. I can't think of any M P that falls within that category.

  • Comment number 22.

    Were where the Auditors in all this ??? Too busy enjoying the tax free jollys to F1 in Monaco !

    Losses on this scale cannot have gone undetected to any of the Directors. Regulators or Auditors and there must be an investigation as to why these cover ups have been allowed

    The fruad squad should now become involved. This is unacceptable and cannot now be brushed under the table.

    Lets hear from the Auditors NOW

    Brown must go NOW

  • Comment number 23.

    Re Goodwin's good win : any help from the taxpayer should have been conditional on the directors being sacked with no pay or pension. All this "contractual obligations" stuff is just rubbish - firms go broke every day leaving creditors in the lurch, and pension funds go bust too.

    In any case I can't see why the taxpayers should bail out the banks. Depositors should have been protected (e.g. by transferring these accounts to National Savings) but I do not see why all these "credit default swaps" and other casino operations should be guaranteed - banks are limited liability companies after all.

  • Comment number 24.

    Has anyone read this pathetic analogy on the government real help now website ?

    Quote:
    Just like everything gets difficult for you in your house when the electricity stops flowing, everything gets difficult in the economy when the banking system stops working. So it was really important to save banks, because that underpins everything, just like electricity does in your house.

    For the record (and this part is specifically for the government), the difference between saving electricity and saving banks is one of criminal discrimination. Everybody would benefit equally from the former.

    Only bankers, big business, politicians and criminals benefit from the later. Workers and "prudent" savers are being unfairly discriminated against. Well ?

  • Comment number 25.

    By bailing out the banks twice (and maybe now a third time on the horizon) the government has firmly wedged itself between a rock and a hard place.

    They are now too comitted financially to let bailed banks fail, but still can't see the extent of the liabilities in them, so basically giving the banks a blank cheque, that will probably run to several trillion pounds.

    My advice would be to do what they should have done at the start: let the banks fail as businesses, but guarantee savers deposits.

    Its also a sensible (if brave) option now: if we can't see the extent of the bailed banks losses, then we need to consider turning off the money tap. In the long run it may save us a lot of money.

    One thing: no-one has yet asked the question: How can a business as relatively small as RBS run up liabilities that dwarf the GDP of medium-sized nations, let alone small ones?

  • Comment number 26.

    This mess is the result of a bad business decision; where was the due diligence?

    Bad business decisions should result in the business failing, we should not be bailing out this business with taxpayers money.

    Freds pension was agreed by the shareholders - dominated by institutional holders with a vested interest in talking up remuneration packages. I'm sure Freds pension is contractually watertight; however is there not a case for him to answer for bad corportate governance?

    Neglecting to undertake rigorous due diligence is negligent and there must be a clause in his contract about acting in the best interests etc....

  • Comment number 27.

    Refund the savers, take ownership of the loans and get the money back, make mortgage defaulters council houses, close all insolvent banks.

  • Comment number 28.

    In other words Gordon, "Look what a mess you have landed us in now".

  • Comment number 29.

    Robert

    I don't think we are being told the whole truth.
    We are being told that there is £300bn going into the banking insurance scheme. I think that is not right as we are also being told that RBS was the largest bank in the world.

    ARE WE REALLY TO BELIEVE THAT ALL THAT DEBT IS DENOMINATED IN STERLING, OR IS IT IN RESERVE CURRENECIES SUCH AS EUROS AND DOLLARS? WE SHOULD BE TOLD.

    If it is the latter we have been saddled with a debt that is unquantifiable in sterling and dependent on the exchange rate. Take a look at the problems of Eastern Europe where their currencies have gone down the drain and loans have been given in Euros. Austrian and German Banks are in deep dodo as a consequence.

    Answer on a postcard please (or better still on this blog); don't believe anything that this government says. AD actually tried to say on the Today programme that we would make a profit out of Northern Wreck, that is currently being subjected to the "Grand Old Duke of York" economic theory.

  • Comment number 30.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 31.

    Robert,

    what exactly was the 'cause' of this loss, in detailed terms?

    we never know the detail. is it a secret?

    when money is 'lost' on paper (accounts) is it 'share value', asset value or is it that it was 'spent' on something that didn't actually exist (fraud), was it 'stolen' or 'misappropriated by 'hackers' or 'scams'?
    was it dropped down the drain or were the 50quid bills burnt along with the evidence?

    the money (whatever form it takes) must have gone somewhere. Nigerian criminal gangs? oil companies milking? UBS style trading mistakes, illegal betting?

    come on, just like Enron, we need the detail it is after all OUR (that is ME AND YOU) money that is now the 'foundations' for this bank and I WANT TO KNOW NOW, please (of course)!

  • Comment number 32.

    thinking of a master plan
    there is nothing but sweat
    inside my hand so i dig into
    the rhymes i've lent
    thinking about how i could become
    the president
    in 1999 rbs bought mercury
    asset managements investment
    bank because the rbs investment
    computer system was rubbish
    in 2001 they sold it
    to bank of new york
    after transferring clients
    because they were jolly good fellows
    and bought nat west instead

  • Comment number 33.

    I've recently been made redundant. Forgive me if i ask "What's the point in ever going back to work after all this?" I begrudge where all my taxes will be going now, and it's been exposed how corrupt this country and many others are.

    It's time for a revolution. Watch this space! I'm at breaking point.

  • Comment number 34.

    Some comparisons are neededed.

    £19.5bn = £325 per person in the UK.
    £325bn = £5416 per person in the UK.

    Over the last 10 years how much did RBS pay in ...
    (1) taxes?
    (2) dividends?
    (3) bonuses?
    (4) bonuses and salaries to executives and senior managers?
    (5) fees and commissions for various "deals"?

    Laws should be made that put a legal limit on how much a company can receive from the taxpayer in loans (must be securitised) and guarantees. This should be limited to 5% of the corporation tax paid over the last 3 years.

  • Comment number 35.

    The RBS team surely deserve a bonus from their shareholders for this deal.

    First loss is kept to 6% and that doesn't matter anyway since HMG will inject money to cover that loss in any case in return for more worthless pieces of paper.

    In return for giving them a blank cheque plus 19bn petty cash we get 6.5bn back in worthless pieces of paper. Does this value the bank at 130bn?? really? How much did the 70% stake cost us?

    Why carry on the farce of this with RBS - it is just throwing money in the trough and everytime the markets are emptying it just as fast.
    How many weeks before the next refilling is required?

    No surprise that the markets like this from the movement in shares this morning - it is complete capitulation by the government to the banks. The is no limit to the stupidity of the lending they can make which HMG will not bailout now and in future since banks cannot be allowed to fail.

  • Comment number 36.

    Wait, if WE are injecting THEIR loss provisions, then we are assuming ALL losses. What?!

    What value could we get if we just broke them up and sold off all the pieces?

  • Comment number 37.

    On the RBS accoutns themselves:

    1. Rahere particularly enjoyed the way Sir Philip Hampton turned a disaster into a plus: "The international
    nature of the Group is reflected by the fact that during 2008 we were able to benefit from liquidity support provided
    by central banks in a number of jurisdictions." That reveals something interesting, RBS is being bailed out elsewhere as well. One trusts we have a full picture of the dilution, Sir Philip?

    2. Regarding Fester's refusal to act against the Shred, Sir Philip states: "In recognition of the crisis in global financial services and the unprecedented losses incurred by the RBS Group in 2008, the Remuneration Committee of the Board has been working to bring about fundamental change to the way remuneration works throughout the Group. There is an obvious need for very significant change to compensation policies and practice across the industry and we intend that RBS will be fully engaged in the necessary process of change." That makes the accounts fraudulent.

    3. To expand on my previous posting about Nathan Detroit, Hester affirms that the tso divisions which generated these losses included the one he subverted. In fact, the losses from risk exposures were not 6.4bn, but 16.6bn if you add back their trading profitability, nearly triple the face value.

    4. Can anyone explain the following from Hester's statement: "The fall in
    sterling exchange rates inflates the optics of our international balance sheet." The WHAT? Viewed through the bottom of a glass, perhaps?

    5. In terms of timescale, Hester considers the problems will continue for 3-5 years before they even begin to turn the corner. I bet GB's happy with that statement.

    6. He does, however, confirm the creation of a Toxic Bank division in the second quarter.

    I will next turn to the accounts themselves.

  • Comment number 38.

    What will probably be one of the hardest things to do with RBS (not just the bank but the whole group of companies) will be to change the culture inside it.

    Just because Fred has gone, does not mean that his influence and example has gone too.

    Hester and colleagues (and the FSA, the Treasury and UKFI) will have their work cut out to get RBS operating with a reasonable degree of social responsibility as opposed to Fred's reckless and imprudent ways.

    Eliminating the bad and inappropriate influences and preventing the emergence of a "son of Fred" / "Fred II" regime, will not be easy.

    Instilling within the operational culture the right qualities will be hard work.

  • Comment number 39.

    In your interview with Stephen Hester on the Today programme this morning he was quite quick to acknowledge there would be job cuts. I don't think that question needed to be asked - we knew the answer already.

    It would have been more pertinent to ask Stephen Hester if he was going to reduce the pay and pension entitlements of RBS senior executives and directors as part of the cost reduction programme.

    That is the question most people would like an answer to.

    I know Stephen Hester is not responsible for the mess, he is there to clear it up. But is he really a new broom, or more of the same?

    You are there to find these things out for us, Robert. Keep up the good work.

  • Comment number 40.

    So responsibility for RBS future losses has been passed to the public, at the rate of about 10,000 pounds per taxpayer. (Let's not dignify this disgrace by calling it insurance.)

    I have yet to see a convincing argument as to why letting RBS go bust is worse than the alternatives. I can see that big job losses in Scotland might be fatal to the Labour party, but the government is supposed to be acting in everyone's interests. Frankly, I'd rather take the small hit on my pension fund from letting RBS collapse than have to set aside 10,000 pounds to cover its losses.

  • Comment number 41.

    I always think Jim Rogers was right, should just let these rubbish high ego banks failed.


  • Comment number 42.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 43.

    Tragically.............It's all an unbelievable mess that you and I will bear the burden of for years.The vast amounts of toxicity still remainsunquantified and unidentified.You think you've heard the last of this ? I fear not..........there are plenty more skeletons lurking out there-make no mistake about that.

    Stll GB/AD can cope admirably can't they ?

  • Comment number 44.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 45.

    #13 and others

    I suggest RBS shareholders club together and sue Sir Fred for negligence and neglect of duty citing the current state of RBS as prima facie evidence. They could recoup their costs by selling the Sun exclusive rights to report on the public pilloring. It would make good television too. The FSA people yesterday was reality television at its best - jaw dropping as Robert said.

    I am still not quite sure where this will end. When there are 4 million people out of work and deeply in debt and greedy incompetent bankers enjoying well paid retirement benefits at 50 there is considerable potential for civil unrest. Debt keeps most of us quietly enslaved for life (or at least from University to retirement). The more radical might consider anarchy a liberation from debt. When you have nothing to lose the shackles get looser.

    I think I will pop along to Nat West and see how much I can borrow. With low interest rates and the tax payer taking the risk it is a much better time to borrow than to save. With quantitative easment they probably have loads of fresh cash to hand out. It might finance a nice life in South America.

  • Comment number 46.

    The sooner they Nationalise the RBS and rename it the "The Royal Bank of England" the better.

    That way the 80% of Tax-payers who are English and will own the Bank will have at least some reason to care for this former Scottish loss-making outfit which otherwise should have been allowed to simply fail as a bankrupt operation in the truest sense of the word!

  • Comment number 47.

    There's an old saying often linked with financial gratification and that is 'No gain, no pain'. So far it seems that the bankers have had all the gain and we taxpayers have had all the pain. Isn't it time some financial pain was dished out to the incompetent bankers who have caused all this mess?

  • Comment number 48.

    I'm beginning to wonder if the "cure" is as corrupt as the system that caused the original problem ?

  • Comment number 49.

    This is a pig of a business. You wouldn't lend to it if you were RBS.
    Not knowing the size of potential losses... was there any risk management processes in place at all, or was it just window dressing to placate the FSA.

    Big up Sir Fred though...he may not have been able to pick a good deal / time to buy another bank but his personnal contact is a work of genious.

  • Comment number 50.

    Does Mr Tom Scholar live up to his name? I suppose he really does !

    But Mr Peston you do not make any reference to the Brilliant and Hardwonking Treasury Team who must have toiled and toiled to produce this Master Plan for RBS.

    Now Credit is really due. A kind word or two from you would boost morale at HMT. Would it not Sir ?

  • Comment number 51.

    Why doesn't the Government just go ahead and nationalise the banks - is it because there would then be no one else to blame when that didn't work?

  • Comment number 52.

    How about creating the toxic bank and making it the legal entity responsible for Freds pension and the investment banking arms bonus ?

    Seems to me like you get rid of two problems in one go and a big crowd pleaser as well.

  • Comment number 53.

    My God, will the government PLEASE let these banks die.

    Guarantee the foreign debts to stand behind the pound, guarantee the deposit-holders and then send the lot HOME. They are losing money faster than Merv can print it.

  • Comment number 54.

    There use to be a time when the best cure for a patients ills was considered to be bloodletting or leaches when bear bating was a little harmless fun and 20 lashes in the market place considered to be appropriate correction for stealing an apple.

    Today we would consider these actions the misgivings of ill educated ignorant and barbaric people with misplaced good intentions more to be pitied for the poor and fearful lives they lead than blamed for their unenlightened minds.

    In years to come peoples will look back on us but I feel with less pity and more blame we have the knowledge we no that we cannot continue to run social economic policy on maintain a global economy and a 6billion and rising population on the systems that we had to look after empire building and national communities.

    More importantly our ancestors had no facts and little data to work on half the magistrates and doctors could not even read or write (don’t say no change there then). Today we have data and statistics coming out of our ears possibly to much to manage but we know that the social economic community polices we follow are not working just like the blood letting did not but on the bases that we have not discovered anything else we continue to let blood because occasionally some lucky so and so recovers

    We know that certain things systems an policies have failed we know that extremes favour the few surely it has to be time to start working on the way we build a new sustainable society economically socially politically. We have the skills we have the knowledge we need to build for our future generations we have to stop the idea that our greed will take care of our offspring because it will not.

    Problem is the control of our destiny lies with the greedy fat cats and their supporters and they have no interest in changing anything and so much have we gotten use to this reverence of greed that many secretly admire those prowling fat cats and just wish we were clever enough to steer a business into ruin to bring a global economy to its knees to put hundreds of our fellow citizens out of work and at the age of fifty walk away with 650,000 pounds a year of course as a tax payer in this country he will continue to support the bank he ruined from his little nest egg hard life isn’t it.

    We have hundreds of politicians thousands of advisors millions of civil servant all seeing that the temple of twentieth century economics is shattered and all we can do is try to rebuild it not even with improvements but just the same.

    Surly its time to get some people who can think outside the box looking at some alternative ways to do things given some space and collaboration they may really find a better way.

    Problem is that those who gain from things the way they are will never while they can manipulate an existence, be it ever so poor from the status quo even contemplate let alone consider any change no matter how it may benefit the rest of society just in case it slightly, ever so marginally disadvantages them and even if it did not is it worth the risk that it might.

    Shame on us all for not ceasing the hour and starting to find a better way into the future

    So the cry must remain long live Sir Fred Goodwin a fine example of all the 21century politics social and economic policy stands for after all his pension is a pittance by comparison to what our future generations will have to pay in taxes for his and all his colleagues legacy.

  • Comment number 55.

    #16, #21 'government of national emergency' and 'all the talents'

    where were the Serious Fraud office and MI5, the Security Service in all this?

    Forget terrorists and bombs in Downing Street, any single minded group of Financial market 'dark players', could easily destabilise any European Government, if they chose so to do, as we are now so very very exposed and in a word, bankrupt.

    So why were the 'security services' not also monitoring what is undermining 'national economic security and stability'?

    we do urgently need GB to take the short drive to the Palace, asap.

    as for RBS being a dead horse, it would be the eco-friendly thing to do, to 'can' the 'dead horse', although do we have the demand for all that cat food?

  • Comment number 56.

    This is great news today as it will allow a line to be drawn under this whole sad situation.
    I strongly suspest that these so-called toxic loans will turn out to be not nearly as toxic as has been feared.
    The rebounding share price is also great news.
    So let us all heave a sigh of relief that things are now beginning to change for the better.
    Onward March!

  • Comment number 57.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 58.

    The only long term forecast the Govt should be interested in just now is the weather one.

    If it's a long hot summer.....

  • Comment number 59.

    Back to this:

    "First losses of up to £19.5bn on those impaired assets will be taken by Royal Bank. But to prevent the losses wrecking the bank, we as taxpayers will be injecting up to £19bn of new capital into it, in the form of non-voting shares." - Robert Peston

    Robert, why can't they use some of their own capital to absorb losses? Are you saying 0.5bn is the best they can do without the bank being wrecked? Do you mean to imply they are tapped?

  • Comment number 60.

    These are only the "published" losses.
    The true scale of losses at all banks is way beyond this sort of figure.
    Much of the true losses are sub-prime.
    Millions of sub-prime properties in the USA have gone from a price of 200k to zero.
    "Property blight" has hit most American cities hard.
    We may see it return here, just like in the 90s.
    We didnt learn our lesson then, we've done it again.
    Over-priced property is like a giant gaping drain, into which the banks hurl money....and most of it is on its way to oblivion.

  • Comment number 61.

    Another day and another day of hysterical BBC and media coverage. As has been pointed out elsewhere but has been drowned out by the wailing renta-crowds, the banks have been hit by a set of unprecedented factors which could not have been foreseen other than with the benefit of hindsight of which there is plenty in abundance. Sure mistakes were made and those have been well documented (ad nauseum). Not so obvious in the coverage is the political meddling by numbers 10 and previously number 11 have made matters much much worse - helpful to the banks to extent of making somebody swim with concrete boots on. Ridiculous capital ratio requirements has left the banks no alternative but to stop lending. Add to this some utterly dumb set of accounting standards and hey presto you have the mess we have today. The FSA the BOE and our beloved Government have all played a key role in making matters a great deal worse then they might have been. None of them are going to be sacked, are they now and I am pretty sure bonusses and pensions will not be shabby either. Keep fanning the flames of public outrage Robert, keep diverting attention away from the hapless bunch of civil servants and keep the hounds firmly on the trail of Sir Fred. If anybody has any sense they will be buying RBS shares - even 30% higher they may well prove a stonkingly good investment for those who can look beyond tabloid journalism.

  • Comment number 62.

    On RBS' accounts:

    The underlying trading profit diminished from 10.3 bn to just 80m. This puts the Chairman and Chief Executive's comments about the profitability of the other operating units into great question. Much of this was related to "non-interest income", ie share speculation in a falling market.

    The equity dilution is 400%, from 10m issued shares to nearly 40m. The total risk-weighted assets portfolio was 577.8bn, making the 300bn covered slightly over 50%. How the hell you can get it wrong to that extent puts the valuation of the second 300bn into real question. Also, where is the income from the recovery of the assets written off?
    Take the 3bn they lost to the petrochemicql group LyondellBasell as a for-instance. That company has liquidity problems servicing its debt, but not in refinancing the debt itself. That could easily be solved by A BANK offering less than the loss in liquidity. Bingo, no need for Chapter 11 or 3bn losses. Ever shot your shareholders in the foot, Sir Philip? There'd be a strong moral case to get the Dutch to underright that too, given their responsibilities in the ABN situation.

    Yet again, though, we discover the Russian influence. The Basell part of that 2007 merger, which went straight into the wall, was acquired from Len Blavatnik's Access Industries. Blavatnik has interests in Rusal, which you have seen a while back is associated with the Russian Mafia. Is this on top of the direct losses there, Sir Philip? Is it in fact possible that you've been outthought by the Russian Mafia?

    The sectoral analysis of that risk-weighted exposure shows the 300bn exceeds the Global portfolio, ie includes UK losses, which should be recoverable. Is there any serious management going on in this business at all? At least they showed a profit on 500m on the sale of Angel Trains, their toy trainset (actually the leasing arm of British Rail).

    This just doesn't add up, it's the failure to fight in what's obviously the biggest dawn raid of all time, known as economic warfare.

  • Comment number 63.


    I doubt we will ever know the truth of where the losses have been, where taxpayers money is going, or indeed where it is coming from in the first place. You can rule out getting information from the FOI act, Jack Straw will see to that.
    These politicians and high ranking bankers are untouchable, they will never cross the paths of ordinary folk. Blair is a prime example, what are the chances of asking him down to the local and chatting about the past ? Brown, Darling, Straw et al are securing their own financial futures with nicely paid bank directorships, living in their own world, scratching each others backs, partying on each others yachts , ask Mandelson he knows.
    The more we complain the more they laugh.

  • Comment number 64.

    Are there controls in place to ensure that the £25bn in loans paid out by RBS this year and next year go to British Companys operating in Britain? I would not like to think of the British tax payer paying the bill for loans paid out by RBS to front companies who use the loans they couldn't get in their own country to create jobs and wealth abroad.

  • Comment number 65.

    It might be "in his contract" but surely a 105% income tax on anything above - say - £150k would trim it?

    (I' m 63, still work full time, pension will be less than one hundredth of Fred's)

  • Comment number 66.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 67.

    This was going to catch up with the banking industry at some point.

    I work for a large bank, and in the last 10 years the switch in culture has been remarkable.

    We used to service our customers and look after their best interests. Nowadays its a sell at all costs culture, be it mortgages, insurances, investments, loans or credit cards. What the customer wants is now bottom of the list, they have to leave the bank with some product (whether they need it or not) or you as a member of staff have failed.

    The government needs to change the entire outlook and culture banks have. Otherwise this desire for instant profit, wealth and growth over and above the norm will only casue future problems for the banks.

    Its the culture of greed that lead to bad lending and caused this whole problem in the first place. nevermind, at some point i'll get made redundant and i can go back to doing something rewarding.

  • Comment number 68.

    Here's a suggestion - how about changing the name of the Royal Bank of Scotland to something that represents the nature of the Bank.

    It's majority shareholder is the "UK" taxpayer - 80% of which are English.

    This is no longer a Scottish Bank it's the English taxpayers bank.

    Name change please -

    "The Mainly English Bank" or

    "The English Taxpayers Bank"

    Both much more accurate than "Royal BAnk of Scotland."

  • Comment number 69.

    So we lend them £19bn so that they can pay us £19bn for us to take on a potential liability of £325bn. We get to charge them a fee of £6.5bn but, since they don't have that we get to lend them that as well!
    This makes the kind of lending that caused the credit bubble in the first place look sound and cautious. Sir Fred must be wondering what all the fuss is about. The net effect of these transactions is that UK plc is on the hook for a further £19bn+6.5bn+325bn. And what happens when (inevitably) RBS is not able to pay its first part of the loss?

  • Comment number 70.

    It's all OK... Bank shares were up 20% today, so if the government sells now we are all quids in!
    Perhaps these are the first green shoots of a strategy?

  • Comment number 71.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 72.

    Usual manipulation. We were primed in advance to prepare for a writedown of 28 billion, including a loss of 8 billion. This morning, we are presented with a writedown of a mere 24 billion, including a loss of only 7 billion. All good news. The share price rises, as does the ftse, green shoots abound...

    And last night, we get to hear about Fred's pension FOR THE FIRST TIME? So hate, hate, hate the Fred... and don't look too carefully at today's RBS small print.

    And we're all reassured that Fester the Jester and FSA Phil will turn the ship around in 3-5 years, so we'll all get our money back.

    Zombie bank. Zombie economy. Zombie morality. Zombie country.

  • Comment number 73.

    So - with the HBOS news to come very shortly - this makes another £500 billion (for god's sake!) of taxpayers money at complete risk to cover the mistakes, incompetence and dodgy dealings of the big bankers being encouraged by an inept Government and a hapless confused 'light touch' regulation.

    And to think that poor old profitable little Northern Rock went to the Bank of England for a 'facility' (only) to possibly borrow about £3 billion if needed later.....!

    (This was a confidential but prudent step at the time but which was leaked by someone to someone else and then released into the media some 4 days before the Company had been able to get it's IT servers upgraded for a planned Monday announcement and expected rush of on-line activity).

    So the great Bank Run of 2007 hit the screens, and how! Trial by a media, allegedly in search of truth above all else.

    Northern Rock has so far cost the taxpayer absolutely nothing; indeed when the loan is finally repaid, the taxpayer will have profited big time from the penal loan interest....and our disingenuous Government - as it has said often it intends to do - will make another profit selling the business on to friends in the City. A real win-win situation...or not.

    Of course the 'small' shareholders (in the North East 96% are pensioners who kept their meagre shares as a nest egg for their
    families) have lost absolutely everything, in the great UK Bank Robbery by Dick Turpin and Co. - so that's all right then.

    If our leaders can so easily pinch the assets of the 'small' people, why can they not pinch the absolutely wicked pensions and aeroplanes - and whatever else may well lurk in the hidden corners - of the fat cats now benefiting from this gigantic taxpayer bail out loan to these two companies?

    Are there some personal privileges or advantages involved, perhaps?

    I think some investigative journalist should look into this properly, and get a 'scoop'.

    Anyone know one?



  • Comment number 74.

    Can I thank Alistair Darling for the biggest laugh of the day?

    He has - you could not make this up - asked 'Fred the Shred' to do the decent thing and give up some of his pension.

    http://news.bbc.co.uk/1/hi/business/7911532.stm"

  • Comment number 75.

    'The market obviously doesn't think so RBS shares are up 20% already this morning.'

    The market knows a get out of jail on the taxpayers card when it sees one.

    So far the banks have run rings around the govt, of all the money put in by GB how much has made it onto the high st and how much have the banks simply absorbed?

    There must be a good reason to not simply have guaranteed deposits and let one or 2 of the banks go (apart from the first one being in a Labour heartland) but I can't think what it is.

    Every solution they come up with to the bad debt crisis seems to involve adding more bad debt. A bank that has needs 325bn in insurance for bed debts has to guarantee to make an extra 25bn available in credit as part of the deal.

  • Comment number 76.

    Oh just get the stamp out again. Bang, Ouch, there we go, another one on the forehead. What does it say ? MUG.

    Is this how revolutions start ?

  • Comment number 77.

    the only reason RBS hasn't been nationalised is that it's a Scots bank. Imagine Alex Salmond's glee if the UK Government nationalised it and started making job cuts and closing operations north of the border. Labour would take a political beating unter the lines of 'undermining Scotland's economy' or the like.

    RBS probably hasnt become a bad business overnight, it made the foolish purchase of ABN at exactly the wrong time.

  • Comment number 78.

    JAIL!

  • Comment number 79.

    In this article ("There Will Be Blood") Niall Ferguson predicts prolonged financial hardship, even civil war, before the ‘Great Recession' ends ...

    http://tinyurl.com/dzlao6

    ... Ferguson makes the point that, "of course this isn't a recession. This is something really quite different in character from anything we've experienced in the postwar era ... it's a crisis of excessive debt. The deleveraging process has barely begun”. I couldn't have made the point better myself.

    Moreover, it now seems to be dawning on most citizens that living within one's means could be the way forward from here. Less (debt) is more.

    Meantime, RBS is now legally obliged to pump £25 billion of debt into the economy this year, over and above what it would have been lending anyway. Presumably this is so that the proletariat can return to that "I'm rich without effort or responsibility" kind of feeling of the past decade?

    That should pull in the votes in 2010. Or am I being cynical here? Alice in Wonderland, or what?

  • Comment number 80.

    Am I the only one that thinks signing up to lending an "additional £25bn over and above what RBS would normally have lent" as a part of the insurance deal is just plain bonkers.

    This pre supposes:

    1. That borrowers want to borrow this money

    2. That the risks are acceptable

    3. That it can be done profitably i.e at the right price (RBS has a track record of lending at too fine margins)

    In the current weak economic environment both 1 & 2 are very doubtful. Indeed because the economic outlook is poor and risk has risen banks need to be extremely careful about who they lend to.

    I find it utterly bizarre that the government is trying to to encourage banks to shovel heaps of cheap debt into individuals and businesses that are already over borrowed. All they are trying to achieve is a short term boomlet prior to the election.

    This is utter madness

  • Comment number 81.

    I just looked at what it would cost for a person with a stakeholder pension to gather enough funds if they were aged 24 now to plan to retire on a pension of £650,000 at the age of 50... all you need is to save around £35,000 a month.

    Out of Proportion is the least of it... and this is for failure...

    'The World is A Turning'... hopefully to a better direction.

    JPWright

  • Comment number 82.

    ref 46 Menedemus

    It could be argued that the Royal Bank of Scotland always has been the Royal Bank of England in Scotland. It was founded in 1727 by Hanovarian supporters who believed that the existing Bank of Scotland were strong Jacobite supporters, and who wanted a more successful pro-Crown outfit in place.

    Now, there's an irony.

    Breaking news: MPs are suggesting that Fred should voluntarily give up SOME of his pension entitlement.

    Now, if Fred agrees, but only on the understanding that MPs give up some of THEIR pension entitlement (the most generous scheme in Britain, funded entirely by taxpayers), we might be beginning to see those green shoots...

  • Comment number 83.

    Thank you for posting the Hester interview. Yet another sanctimonious spiv is being given access to the "good old boys" money
    machine. Time for talk is running out. Soon
    it will be time for action . The middle classes are beginning to feel the pinch. They started the French Revolution. "Aux armes citoyens".

  • Comment number 84.

    I become more convinced by the day that we are looking, not at "a recession", but at a national economic catastrophe, induced by personal, corporate and government greed and idiocy. This news is merely one more lurch down the slope.

    Printing money is the next, inevitable step now. Once this happens, sterling could crash, meaning that we will only be able to borrow from abroad at Russia-type, Iceland-type, double-digit interest rates, if at all.

    We are sinking into a debt vortex, and becoming more of a banana republic than any country which actually grows bananas.

  • Comment number 85.

    Robert

    'will be born by us'

    Check your spelling please

    We've all known this was coming, making a breaking news every time something happens is not helping.

    Yesterday you were again left speechless about the pension story. Twice in one day!!

    Breaking news
    I am going to put the kettle on

  • Comment number 86.

    I suppose that does leave one or two more questions

    We have all this hype, but what do the auditors say about it? Who are they? Are they different to auditors they've used in the past?

    ...and the board comments about future prospects?

    Meanwhile what is Brown and Darling doing in the background whilst the "camera" has gone in a different direction?

  • Comment number 87.


    This is all about an election.
    Scotland is the powerbase of this Cabinet and I am too long in the tooth not to believe there is a connection between an Edinburgh Chancellor and an Edinburgh bank and Scottish jobs .
    Too cynical for words.?

  • Comment number 88.

    Hey, tech person!

    Push that moderation button...I've tried emailing Robert to sort it out

    Only on this blog too...

    Strange way of getting me to stop posting...

  • Comment number 89.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 90.

    Will any good come out of all this mess? I hope so, yet the government and frankly the world seems hell bent on simply trying to repair and replace the system that has just failed us so completely. Why? Have we not learned that what is needed is radical change?

    At the heart of it, people need to stop being so greedy. Nobody needs to earn £650,000 per year. End of story!

    We should all be appalled at ostentatious displays of obscene wealth, instead we feed off it and there by encourage it, drooling over film stars, rock stars and dreaming of celebrity lifestyles when there are people out of work, loosing their homes and in many countries starving to death.

  • Comment number 91.

    RBS being forced to increase lending and it becoming a profitable bank are mutually contradictory goals. Glad to see politics aren't driving commercial decisions.

    As a matter of curiosity who still thinks BARC was insane to paid any fee, any discount to avoid the government's clammy clutch?

  • Comment number 92.

    Posts #63 through to #83 awaiting moderation yet #84 StrongholdBarricades pops through like a jack-in-the-box. Again.
    Are you covered in Teflon or do you work for the BBC - you're surely not a moderator?

    Intrigued Groucho

  • Comment number 93.

    RBS is a great company in excellent shape! So wot if it lost a few quid?

    Sir Fred is the best bank CEO of all time! Well, after maybe Adam Applegarth...

    Of course he deserves to receive a £650000-a-year pension for the rest of his life (he is 50), to reward his achievement!

    This blog is NOT censored by moderators! Free speech is here!

    I am NOT being negative, so leave this post ALONE!


    Let's all rejoyce!!!

  • Comment number 94.

    And, to add insult to glorious injury, I have received a letter from RBS informing me that, despite the recent cut in the interest rate by the Bank of England, RBS will *not* be reducing our mortgage rate. (This comes on top of a series of delayed and sometimes minimal reductions over the last few months.)

    If the government can’t persuade its own bank to follow its economic leads, what chance with the rest of the banking sector?

  • Comment number 95.

    Dear Robert
    This is my first post. And firstly I would like to thank you for your open and frank reporting on the issues that have lead us to edge of this financial abyss.
    What has driven me to register and post the following comments is not today’s £24,100 million RBS loss, but the fact that these 4 bankers (specifically Sir Fred Goodwin) had the audacity to say, "he didn't see this coming".
    I'm just a mere engineer, some one who designs and helps manufacture things to sell and buy, just in case any of our bankers have forgotten this term.
    A good friend of mine (another engineer with a keen interest in economics) studied the money supplies back in 2003, and voiced a serious concern. That the money in circulation was at an historic high to the money held in reserve. Based on this he move from equities into gold in late 2003, this being about 1 year after our illustrious leader had completed the sale of 50% of our gold reserves at historic low!
    I remained in equities until Nov 2007. But with the markets flat at 6500ish and after 4 years solid growth, I moved my sister and I trust’s into cash, which was returning a respectable 5%.
    If we could study the limited data available in the public arena, and realise that this financial abyss was approaching, it is beyond my comprehension that our senior bankers can say "we didn't see this coming"!
    And to compound there collective stupidity, arrogance, lining of ones pockets, they had anyone that dared to raise concerns, removed and paid-off. This is an unbelievable way to run a small business, let alone the future of our country!
    And I have one further question. How did Sir Fred become Sir? If I recall a Knighthood is bestowed for service to Queen and country? In which case I believe Sir Fred should now become Fred, especially if we (the UK tax payers) cannot get his pension fund back into the public finance pot.

  • Comment number 96.

    The bank and government have decided to place £325Bn of assets into a scheme that will "insure" against future losses on toxic assets.

    What's to stop this previously secretive juggernaut, in line with the recent culture of the banking industry, been economical (to say the least) with the truth about it's liabilities under the assets on it's books.

    Mr Peston has pointed out recently that RBS has in the region of £3 Trillion in assets; how much of these remain an unannounced risk?

    Somebody needs to be appointing a truly independent review of these books!

  • Comment number 97.

    I'm beginning to wonder if the "cure" is as corrupt as the system that caused the original problem ?
    Post 48

    The cure is in fact the really corrupt part.

  • Comment number 98.

    22. At 08:42am on 26 Feb 2009, GrumpyBob wrote:
    "Were where the Auditors in all this ??? ...
    Losses on this scale cannot have gone "


    Until the credit/debt bubble burst there were no losses to miss and so no cover-up - all these loans would have looked good so long as the asset price bubble was inflating.

    This should have been the role of bank risk departments, Government, FSA and BOE to identify inflating bubbles and stop them before they became dangerous.
    Now asset prices have savagely deflated the loans used to pump the asset prices up in the first place look extremely bad, the degree of toxicity being proportional to the speculative nature of the investments made with the loans. More speculative more risky.

    Picture how it works - you have £500mn and want to build a new hotel - you could invest your own money. If it goes wrong you lose all the money.
    Why not lend the bank 500mn and then borrow through a separate company 500mn to build the hotel. Now you 'own' the hotel and the bank owes you 500mn

    Market is good - the value of the hotel is now 1bn. You borrow another 500mn from the bank to build a second hotel mortgaged against the first hotels 500mn increased value.
    Now you own 2bn worth of hotels, the bank owes you 500mn and the banks has 1bn exposure to loans - collateral looks good 2bn worth hotels against 1bn loans.
    Profit is good and there is no hole in the finances to find.

    You could repeat the cycle of mortgage, invest as many times as the inflating bubble will allow you.

    Market goes bad - hotels are worth 250m each now. Bank now has 500mn worth collateral against 1bn loans - this looks bad for the bank.
    You still own the hotels and so long as people still holiday and they are profitable you are OK.
    The bank still has a problem - the risk you will default is increased (it is more likely your hotels will fail but not certain) and they have a hole in the balance sheet.

    The more cycles that have occurred the bigger the problem for the bank.

    You are however angry with the bank because the 500mn you lent them is at risk (you have forgotten that you actually borrowed this money from them).
    So you agitate with the government to bailout the bank to prevent you losing the 500mn if the bank fails.
    Government agrees to bailout the banks - you are happy, now your 500mn loan to the bank is guaranteed and you still own 2 hotels.

    Worst case scenario for you is now is the hotels default and you get the original stake back from the bank plus get to keep all the income generated in interest (on the loan) and profit (from the hotels).

    If you were really clever - you could set up a new company to borrow 500mn from the bank to buy the defaulted hotels from them.
    So now the bank owes you 500mn and you own 2 hotels.

    The bank meanwhile has lost 500mn which is funded by the government.

    Ever wondered why the rich get richer?

  • Comment number 99.

    Deary me .. how bad things are getting.
    This is setting the taxpayers up for one massive hit.

    The economy is in free fall.
    Bad debts will rise at never before seen rates.
    The prospect of a bank that has just burnt 24 billion now continuing to blow this new 19 billion must be highly likely.

    And then comes the 'insurance' kicker whilst the British tax payer is lying on the floor gasping for breath.

    Anywhere up to 325 Billion.

    What idiots are in charge.

    My Dad's birthday today, he's 71 (happy Birthday Dad). Just got off the phone, Australia to UK (Midlands), and he say's if there was an election tomorrow, Labour would likely poll not only less than the Lib Dems, but less than the BNP.

    Do I need to wonder why?

  • Comment number 100.

    It might not be good news but it is necessary news. At least the actual numbers that lie behind the bank bail-out are becoming apparent. This will add to the prospect of the economy finding a floor before it crashes into the second sub-basement below the car-park.

    This is all very serious stuff in very serious times. We must all be responsible to a point and this is a sign of progress of a sort.

    It is a great pity that we are not making progress on the political front where everything seemes to have stalled as a seemingly endless procession of failed regulators and former bank executives - they do not justify the term bankers - parade their incompetence and greed to all and sundry.

    The only way for us to get beyond the stocks and the pillory is for the government to pack its bags and go. We need a new start and we need it now!

    Failing that; I too might take up the kind invitation of the Metropolitan Police for a long hot summer. Takes me back to my youth!

 

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