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Turner: Not banks' enemy

Robert Peston | 08:51 UK time, Wednesday, 23 September 2009

The chairman of the Financial Services Authority has upset a few bankers by declaring that he won't be a cheerleader for the City and that quite a lot of what they got up to over the past decade was "socially useless".

But a proper reading of Adair Turner's speech at the Mansion House last night should reassure them. Some will argue that the regulator-in-chief is letting them off lightly. So perhaps it is the greater citizenry - most of us - who will now be miffed at him.

Adair TurnerMost significantly, he is some considerable distance from arguing for radical reform of the structure of the banking industry.

While opinion at the Bank of England has hardened in favour of breaking up the banks, of separating their retail operations from their so-called casinos (see my note last week, "Banks can learn from retailers"), Adair Turner retains a touching faith that regulators will in future be able to eliminate the risk of taxpayers picking up the tab for investment bankers' recklessness through the judicious application of variable capital requirements.

Some will see this as the triumph of hope over the experience of a financial crisis that on some measures was the worst the world has ever seen.

And, so far Turner has rested his defence of this aspect of the status quo on the practical difficulty of distinguishing between the bits of a bank such as Royal Bank of Scotland or Barclays that are core utility functions, deserving of insurance provided by taxpayers, and which bits fall more squarely in the caveat emptor, wholesale and speculative categories.

He says there are some trading activities, for example, that even a pure retail and commercial bank would need - and that therefore it would be somewhat arbitrary to draw a line that says one group of traders could stay in a taxpayer-backed bank whereas another group would have to be cut loose to take their chances in the free market.

But it's not clear to me that he is being wholly consistent here. Because if he is going to make safe the speculative activities of banks by insisting they hold far greater capital as a buffer against potential losses than hitherto, then plainly he is confident these activities can indeed be clearly identified.

And if the bits of Barclays and Royal Bank that are riskiest can be picked out for the purposes of forcing them to hold more capital, then presumably they could also have a line drawn around them that would allow them to be segregated, separated, demerged.

So if Adair Turner believes there is a powerful case for preserving the universal bank - one that provides essential credit, protects our savings and is part of an indispensable network for moving money around, all joined on to the seductive, glamorous casino - he needs to demonstrate three things.

First that it wasn't these universal banks and associated financial institutions that caused the most havoc in the recent crisis. Which may be hard to do, since the bulk of taxpayer support has indeed been provided to the likes of Royal Bank of Scotland, Citigroup, UBS and AIG (which was a universal bank by another name).

For the avoidance of doubt, they weren't the only culprits. But it was when they were tainted that we were staring into the abyss. We could not afford to lose a single one of them, let alone the lot. The collapse of Northern Rock, Washington Mutual, Lehman Bros and HBOS would have been much less dangerous if there hadn't been contagion to much bigger and more broadly based institutions.

Second, he needs to make the case why - in spite of the mess these universal banks made of things - it is in the interest of the wider economy that such banks should continue to exist. And he would need to take head on the arguments of John Kay and Andy Haldane that universal banks are intrinsically lousy retailers, designing products whose purpose is to befuddle consumers into paying excessive fees and interest.

Third, and most importantly, he would need to demonstrate - beyond a doubt - that the so-called living wills that universal banks are being asked to draw up will end the iniquity of their investment banking activities being implicitly supported by taxpayers.

There is no doubt that any universal bank's casino or investment banking arm has been able to attract cheaper funding over many years because of creditors' confidence that in the event of a crisis the entire bank would be rescued by taxpayers, that the state would not allow the casino to fail.

And creditors have been proved absolutely right over the past year (Lehman was allowed to go down, but it wasn't a universal bank). We did bail out the whole of RBS, Citi, AIG, UBS and so on.

It is counter to common sense and social justice that taxpayers should insure investment banks, which are no more socially or economically useful than any other kind of imaginable business.

So the question for Adair Turner is whether he really thinks it would be easier, more practical and in the interest of the UK (or the world) to endeavour to prevent the subsidisation by taxpayers of universal banks' less socially useful functions through regulation, the imposition of internal firewalls, complicated legal ruses, rather than the cleaner method of breaking the banks up.

Turner himself gave one rather graphic example of how banks are making hay out of the support given to them by the public sector. He pointed to investment banks' recent generation of very large profits and said:

"these profits are, to a significant extent, being earned because of specific post-crash circumstances: increases in the market share of the survivors, government guarantees and central bank liquidity support; very low interest rates; volatility; and large government debt issues."

Which is why, in his view, those substantial profits are "a legitimate matter of social interest, rather than a private matter [for the banks]".

What follows - for him and for his fellow regulators on the Financial Stability Board in their report to the G20 leaders - is that these high profits should primarily be deployed to strengthen banks capital resources (and support lending), rather than being used to pay fat bonuses or dividends.

Or to put it another way, there will be an international agreement to limit bonus payments at banks that are perceived to be too thinly capitalised. And Turner says that "over the long term there will be a legitimate interest of regulators in aggregate bonus payment rates if and when these payments have implications for capital conservation".

Many will see this as a fudge, since Turner is explicit that "for regulators the key long term issue is not the level of pay but the structure of payments and the incentives they produce".

But even this messy business of making sure that bankers' remuneration doesn't undermine their respective institutions would be so much easier if the casinos could be left to their own devices, wholly separate from utility and retail banks in which taxpayers will always have the right to butt in.


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  • Comment number 1.

    When the ongoing mess and confusion within the banking sector is considered, together with the continuing uncaring arrogance of banks towards their customers, might it not have been better if we'd got something for our money and just nationalised them ? Caledonian Comment

  • Comment number 2.

    If we are going to take on 'socially useless' & socially & financially expensive activities by our big industries then how about a alcohol, cigarettes, & defence as well as banks for starters ?

  • Comment number 3.

    The city and financial institutions are a vital component of UK's wealth generation. They are not indispensible and that is the point that must me made to register.
    The profits and remunerations are a wonderful thing, for those receiving them. Pensions and savings have though taken an almighty knock from recent excesses which show that the ultimate responsibilities of owners, share holders and partners are no longer an effective or sensible control of mangement practices.
    For the general good of all savers and pensions, the costs of these people doing their business must be raised to those employing them. A multiplier insurance, say 20 times remuneration package should go to FSA as reality cheque to owners of these businesses and it should be made abundantly clear in plain simple terms that just as at Lloyds, owners are liable for their decisions in unlimited consequence for those they proxy into control of business. Grown up people, grown up consequence.

  • Comment number 4.

    I listened carefully to what Lord Adair said on the TV this morning and I concluded he is either a blatant liar or seriously deluded and Naieve.

    He talked about bankers getting bonuses 'staggered' in the form of share options.
    Has this man ever been to the city? I have worked in 4 fund management firms and all of them (bar none) have always issued part share, part cash bonuses. Usually 3 years to vest the options and 5 years and they are tax free.

    So how could bonuses cause the crash? - the answer is they didn't. The cumulative effect of extracting future labour value from the Economy and taking it as cash now, and then giving it to anyone (bankers, banks, shareholders etc) who are then expected the re-distribute the resources that the money represents - is where it all goes wrong.

    Sometimes I think I must live in a bubble and that I'm the only one that can see it.

    Just think about it, if I speculate on the stock market I am betting on the future of a company (or companies). If I bet right then that money I took today will be filled by the future production of that company (it's profits).
    However if that company doesn't make money then who's going to put it back? Me? I think not - I'm already in Mauritius.

    The answer is this goes on and on until it reaches a point where so much has been extracted from the Economy we're all going to have to work for the next 10 years - effectively for free.

    It's just like people who keep taking advances on their wages through those 'pay day cheque' places - except in the Economic scenario it's not the wage earner but his relative (the bank).

    The issue with the bankers bonuses is (in the scenraio above) the relative who keeps cashing your pay-day cheque is actually taking 30% commission for taking it to the shop while you're at work!

    I find it very worrying that Lord Adair (or the Government) has not grasped this simple problem. No wonder the banks are laughing, if they produce anything marginally complicated the authorities who are supposed to regulate it stare blankly into space with a total mis-understanding and the next robbery can begin...

    In the meantime the Government re-assure all the public that they know what they're doing and the despreate people lap it up (in hope more than confidence) because they cannot bear anymore crises - which unfortunately they will have to endure until Capitlaism eventually collapses.

    I might send Lord Adair a copy of Das Kapital because he obviously hasn't read it or he would realise the fundamental failure Capitalism contains.

  • Comment number 5.


    Confusion Marketing is Bad for everyone....

    Why do I get the feeling that Lord Turner's new found conversion (and why did he not do the same thing when the bubble was growing?) is about widow dressing, rather than any action?

    There is a far wider issue and that is of the deliberate obfuscation in products and services and their selling. The technique taught is business schools is that of confusion marketing. Basically the range of products and services is so diverse the buyer gets so fed up trying to work out which is best for his/her present requirements that they just buy something, anything!

    Sometimes this backfires as the plane tickets offer from Hoover that broke the company, for example. Sometimes, and most times, take banking for example the bank contrives to appear to offer good rates to customers, but on accounts that most people can not buy and never (almost never) to existing customers.

    My solution would be to compel service companies (i.e. mobile phone, electricity, gas and all financial services and banking companies.) to sell their best product to all of their customers, old or new on the basis that old customers could legally demand to be transferred to a better current product, without cost to the customer. It won't happen of course, as it would probably double the cost of money to the banks, for example - but people really do get hacked off by banks that offer good introductory saving rates and then reduce them to 0.1 per cent. This should be prevented by an amendment to the sales of goods act (wherever that currently sits in current legislation).

  • Comment number 6.

    2. At 09:28am on 23 Sep 2009, archBonkers09 wrote:

    "If we are going to take on 'socially useless' & socially & financially expensive activities by our big industries then how about a alcohol, cigarettes, & defence as well as banks for starters ?"

    Bonkers by name - sensible by nature.

    I agree, why don't we take this opportunity to rid ourselves of the self destructive and pointless industries.

    I would also point out that when Lord Adair said in his interview about banks performing a useful and in fact vital function for the Economy - I did ask myself - 'where'?

    Would it be the allocation of resources perhaps? - possibly not as any sensible 'resource allocation' would not have been lending to a housing bubble or perhaps to a car industry which is drastically out of date.

    Maybe it's the security of our money? - well it's true money is safer in a bank than under a bed. If you accept this function then you must agree the charge for it (interest is outrageous).

    The truth is the banking function is to ensure that the majority of the working population are trapped into working longer hours for less money progressively through the ages. It does this by ensuring most people can never get out of the debt trap - which in turn means they have to accept whatever job they can get to service it - and that means other people (the loafers) can live on yachts while someone else does their share of the work.

    (and before any sharpie points out, we possibly do work less hours a day than say - the Victorians, however when you consider the change in technology since then we should be working about 1 hour a day by now and still produce what they did in a week)

    That's the function of the banks that the Government holds so dearly. It's the suppression of the majority for the benefit of the minority. Nu Labour, old labour, Tory, Liberal - they are all committed to the same structure and therefore the same result.

  • Comment number 7.

    #1 - Couldn't agree more.
    (Re)create a Postbank such as you will find in the Netherlands and other European countries from the retail parts of the tax-payer owned banks. There is a huge (although shrinking) network of branch offices for whom an injection of new business would surely be socially useful in keeping open local Post Offices that are under threat of closure.
    As for Adair Turner not being the banks' enemy - no surprise there. His background says it all.

  • Comment number 8.

    So many comments that show an understanding of the corrupt banking system yet Lord Adair and his cohorts are guilty of not truly understanding what went on and is still going on.Adairs speech is a pathetic attempt to please his friends in the City and to give false hope to the taxpayer.Bonuses did cause the problem because bonuses arose only from the trading of toxic CDO's understood by noone except the rogues who thought they were the answer to someone elses investment problems.The taxpayer is and will be paying a high price for the Banks forgetting what they were founded to do.

  • Comment number 9.

    So if I have this right, Lord Adair believes that he can make sure banks are covered against losses by increasing the capital they are required to hold. Here’s my question then – how does he know how much they will need?

    Wasn’t the problem that, despite believing they did, investment banks themselves didn’t understand the risk/losses that could be incurred? If industry experts can’t get it right, surely the FSA has no hope. I’m assuming that as some point if the capital requirement is too high then the venture itself becomes unprofitable, so its not as if he can arbitrarily set any capital requirement figure he wants is it?

    I think I like the idea of segregation of retail from investment banking, its fits well with what I want from my high street bank.

  • Comment number 10.

    Fill your boots folks, LIE, LIE LIE. It's the state versus YOU!

  • Comment number 11.

    "The chairman of the Financial Services Authority has upset a few bankers by declaring that he won't be a cheerleader for the City and that quite a lot of what they got up to over the past decade was socially useless".

    The situation becomes a lot clearer if you think what "socially useful" actually means. Turner isn't talking about the banks failing to act in a charitable fashion. If an activity doesn't produce something socially useful, then it is not actually creating any real wealth.

    Moreover they are paying themselves huge amounts of money with which they can buy a large percentage of the real goods and services that the rest of us (who do have "socially useful" jobs) are producing. In other words the banks are simply imposing a heavy private tax on all the rest of us. And this is only partially offset by the fact that a chunk of this money ends up in the hands of the Government.

    If the casino banks are not producing anything "socially useful", then we should be in no doubt that the rest of us would be better off if they ceased to exist.

  • Comment number 12.

    5. At 09:43am on 23 Sep 2009, John_from_Hendon wrote:

    I completely agree with your point. The banks certainly do indulge in 'black OPs' to confuse and disperse the enemy (the regulator).

    You are also correct that this sometimes confuses the people who invented these exotic instruments - which often ends in catastrophe.

    Take credit linked notes for example - these are constructed credit instruments being used right now. What happens is a fund wants to invest in a country outside of it's mandate - lets say for arguments sake - Uganda. This is done on a fixed / floating contract

    The mandate prevents him buying Ugandan issued bonds, however a willing bank (let say Banco corp) creates an instrument which is tied to the Ugandan Government bond rate. As Banco corp is based in the UK the fund has not broken it's mandate.

    Banco corp then take out a CDS (credit default swap) with another bank (let's call it Bracleys) who trade off the default risk.

    If the bond defaults then the problem will be Bracleys
    If the rate falls then Banco corp will be in the money
    If the rate rises then the Fund maanger will be in the money

    However - each party then under-estimates their risk becauses they all believe that their danger is less likely than the rest (I guess that's human nature).

    Even better Bracleys then sells it's CDS on to another bank - or perhaps hedge fund. Unfortunately the hedge fund is part of the portolio being managed by the original fund manager at the top - he has effectively picked up a risk he though he was rid of (allbeit in a diluted form).

    On an individual instrument basis this is a very unlikely scenario - the chances of the CDS being sold to a hedge fund you hold is remote to tsay the least.

    However at the end of 2007 there was a notional value of $45 trillion in CDS's floating about - no-one really know who holds them or who is likely to have real problems.

    The lack of counterparty risk analysis across the system is why AIG needed a bailout. They had been writing naked swaps - if they had been allowed to fail there would have been hundreds of banks brought down by the loss off the counterparty who was supposed to be holding their default risk. On top of that all the CDS's issued against AIG would need paying too.

    There is currently a notional value of CDS's worth $38.6 Trillion (a 30% reduction since 2007) and all it will take is for one big default - lets say an Eastern European country and we could see the house of cards tumble.

    The emphasis all banks and investment houses have suddenly put on counterparty risk speaks volumes for the fear that they have of this happening...

    If you don't believe me - look through a recruitment site for 'Risk analyst' and see how many jobs there are out there - considering the financial services are in decline this is one area that's growing fast.

  • Comment number 13.

    Yesterday I found that my building society was at it again - doing their best to flog me a mortgage. Next week I'm taking almost all my money out of it. No real lessons have been learnt, and the continued very high price of gold speaks to unease of confidence.

  • Comment number 14.

    10. At 10:21am on 23 Sep 2009, JavaMan1984 wrote:

    "Fill your boots folks, LIE, LIE LIE. It's the state versus YOU!"

    JavaMan1984 - you are getting rebellious in your old age - are you ready for a revolution?

    Some folks say there isn't the momentum out there - I say dress up in a pin stripe suit with a bowler, briefcase and stand in your local high street calling "I'm a banker, I'm a banker" and see how long you last.

    I am going to love it when the tax rises come and every man and his dog starts moaning how hard it all is - I shall remind them where the money went and how they stood idly by as the Government aided and abetted a far bigger robbery than the great treain robbers whilst lying through it's teeth about 'protecting the public interest'.

    A person who is easily fooled is simply a fool - a small mass of people who are easily fooled is a fools paradise - a whole swathe of people without a clue is called an electorate.

  • Comment number 15.

    Robert, You're right in all you say on this post.
    Why did Turner not say this when he was Director of a bank, presumably sharing in the bonuses that came from some of this now-discredited business? He admits he did not get pensions reform right, when there was no shortage of people telling him so at the time. There has been for too long, in areas of financial policy critical for the country, a dependence on unelected individuals (overwhelmingly male, white, of a certain age and class as it happens) having too much personal power concentrated in they way they operate or in the role given to them through reviews or "ministerial" posts. Personal arrogance or vanity is not what's needed here; rather genuine working together of people with a range of knowledge, experience and views.

  • Comment number 16.

    The bail out of the banks has destroyed the myth of risk for bankers. They can resume their practices with impunity. For them there are free lunches and muggins government and public will pay and pay again. Alternatively the banks can be supervised not regulated and have publicly owned 'model' banks as real competition - like the BBC - British Banking Corporation?

  • Comment number 17.

    11 random_thought

    These two scentences should be written in gold and stamped on the forehead of Lord Adair and every Treasury minister:

    "In other words the banks are simply imposing a heavy private tax on all the rest of us"

    "If the casino banks are not producing anything "socially useful", then we should be in no doubt that the rest of us would be better off if they ceased to exist."

    That just about sums it all up nicely - the banking system lost it's 'purpose' years ago when highwaymen stopped roaming the woods outside cities.

    Their new purpose is the allocation of resources on behalf of the Government as they see fit - so which is better?

    You resources allocated by a grey suited beaurocrat in whitehall
    ...or a pin striped suited banker in the city?

    The choice is similar to 'who are you going to vote for in the next election'
    a) Nu labour (Red) - Aka old Labour
    b) Nu Labour (Blue) - Aka the Conservatives
    c) Nu Labour (yellow) - Aka the Liberals
    d) The facists
    e) The nutters.

    Isn't choice a wonderful thing when you are presented with a plate of offal and expected to select your 'favourite'.

  • Comment number 18.

    15. At 10:36am on 23 Sep 2009, MissFussbudget wrote:

    "Robert, You're right in all you say on this post.
    Why did Turner not say this when he was Director of a bank"

    ....too busy yachting in Monaco or lining himself up for a Lordship perhaps?

    As for getting the pension reform wrong, well we've rewarded bankers for failure so why not extend the privilege to all the ruling classes which includes politicans.

    This is where many ordinary people go wrong, they are trying to do their job to the best of their ability in the hope they will get a pay rise - what they should be doing is failing miserably and simply awarding themselves millions for doing so!!!!

  • Comment number 19.

    The House of Lords Committee on Banking Regulation ( which you dont mention for some odd reason) says

    " 234. Many of our witnesses dismissed the idea of separating commercial banking from the securities market, arguing that financial markets are now so integrated that such a separation would be impossible. For example, Professor Perraudin said: "Given the complexity of the credit world we now face, it is not sensible to try to return to that kind of situation" (Q 118). Sir Callum McCarthy and Mr Foot both opposed separation of commercial from investment banking (Q 144). Lord Turner noted that Lehman Brothers and Bear Stearns, both systemically important institutions, would have been treated as securities businesses under Glass-Steagall-like legislation, and that, arguably, both should have been bailed out. HBOS, on the other hand, was a narrow commercial bank. He also argued that customers are well-served by integrated financial institutions, and that dividing financial institutions would therefore reduce the quality of the service provided (Q 524).

    235. Some witnesses were more sympathetic to a Glass-Steagall-like separation of commercial banking from more complex market-oriented business. Professor Wood argued that Glass-Steagall was good legislation, though passed for the wrong reasons. But for the future he preferred market competition to legislation to bring about the most effective business structures (Q 38). Professor Perotti suggested that legislation should move in the direction of Glass-Steagall by preventing institutions with access to the deposit insurance safety net from dealing in securities not traded on an exchange, and which therefore are very hard for regulators to assess (Q 222).

    236. The Governor said that there was a strong argument for legislation that would ensure a diversity of banking institutions (QQ 507-508), and he noted that there were strong arguments both for and against separating commercial banking from the securities business: "what I would encourage everyone to do, this Committee and other committees, is to take some time now to think our way through these issues. They are immensely important, we will not get another opportunity to restructure our banking and financial system in a hurry and it is very important that we take this opportunity". He added that there was time to think things through, since "banks are not going to rush out and take wild risks for quite a while" (Q 507).

    237. Even when banks are narrow, they can grow too big to fail: in 1984, the purely commercial US bank Continental Illinois was the first bank to be identified as too big to fail. Strict competition policy would prevent this from occurring, and so might increase the resilience of the banking system to a systemic shock. The Governor argued that, like the legal separation of commercial banking from the securities business, this idea should not be dismissed out of hand (QQ 507-508). Lord Myners observed that "scale brings with it risk and issues around prudential supervision, too big to fail. I think George Osborne has said too big to fail or too big to bail out. I think there is an issue there" (Q 547)."

    How would you demerge the trading book from the banking book / disentangle the CDS/securitised unsaleable loan assets / liquid stuff from the balance sheet of the instituion to be demerged? I read somewhere these are at the centre of the funding gap banks are facing - 500 billion sterling odd? Who would take on the risk? Its ok to advance a principle, but the detail is where it could fail, Robert.What would demerger do to the value of the HM Government shareholdings?

  • Comment number 20.

    Criminal acts must have been committed right at the level of investment banks that packaged and/or resold dubious mortgages, Robert, and this is still very really one problem. A second and greater problem is that what has severely damaged our economy and still jeopardizes our future is still being defended simply on the basis that it is completely legal. Much of what was done in terms of financial market deregulation since the 1990s we are told was completely legal, but a very bad thing to do. The most worrying thing now at this moment is that the current leadership on economic strategy issues is pointing us right back in the same direction. This is merely the latest evidence in this regard.

    They cannot be allowed to continue with simply technocratic tweaks. What is called for is a massive overhaul that will really make a difference to the functioning of the financial system. Institutions have access to government bailouts under vague and completely open-ended terms. In what way will this encourage responsible lending in the future? There is nothing currently on the table that would make the banking system and hence financial system better run.

    The finance industry has captured both public policy and a wide range of public economists who really believe that we need something like today's financial sector in order to resume reasonable growth in this country. This is despite the fact that, as Lord Turner is implying, financial innovation has added little to productivity in the past two decades, and in the face of the massive damage done by overborrowing at various levels.

  • Comment number 21.

    Turner has managed to turn an apolitical regulator into a spokeman for the far left and decimate the good work so many in financial services tdo to enhance teh well being of this country.
    He has been teh most ineffective and incompetent Chair of the FSA since its inception and because he claims to be an academic Labour fawn over him as though he understands the remit he was given.
    His recent out pourings have shown beyond any doubt that the lunatics are indeed running the asylum and have absolutely no understanding of what is really going on.
    Seeking to make bullet points with political slants that do no justice to a situation where so much goes into delivering the end product.
    Perhaps it should be mentioned that no it is impossible to complain to the FSA about the FSA unless they recognise the nature of the complaint.
    The senior management of FSA have clearly taken eth view that it was everyone else's fault and they were innocent of dire and incompetent regulation.
    The best thing we can hope for is that Turner realises, given his deemed intelligence that he is so far off wicket that he resign with immediate effect.
    Given the Conservatives have already announced the death warrant of the FSA we should all rejoice.
    Unfortunatley under Labour errant performers seek to hang on denying any liability until they are kicked out ignominously.
    Turner has gone way over his remit bringing damage to an area that contributes to the national cake and should resign there is no way he is now fit for purpose and his continuation of the the role he now now holds is untenable.

  • Comment number 22.


    ‘JavaMan1984 - you are getting rebellious in your old age - are you ready for a revolution?’

    And to think that people used to spit at me (not literally you understand) in the pub, for being right wing or a Tory. (You know how well being a Tory sympathiser went down in small mining villages in Scotland during the early nineties).

    I think that there is a lesson to be learned from the 2 simple sentences above, proof if it were required – We are being taken for a serious ride!

  • Comment number 23.

    Well said Robert.

    Regulation will probably never really work, because, inspired by the large amounts of money to be made, clever minds will always find ways round regulations and the only result is to distort the market.

    If taxpayers are to continue to underwrite any bank it should be under the direct control of the Bank of England. The BOE should be able to order such a bank to change its behaviour, whenever this is seen to be a threat to financial stability.

    When a bank makes a loan implicitly insured by the state, it is effectively creating money. It is a matter of common agreement, that only the nationalised Bank of England should be allowed to create sterling. Forgers are punished by long terms of imprisonment. Banks, that effectively do the same thing on a vast scale, are hardly restrained at all.

  • Comment number 24.

    It is about time that the FSA was stripped of its powers over the Banks, and the powers given back fully to the Bank Of England. A central Bank has more control and focus on the capital adequacy and the day to day running of the Banks than the FSA could ever have.

    The FSA should be disbanded and replaced with an organisation that really focuses on the interests of the Public, and the adviser firms it regulates.

    Its approach to the Financial Services Industry/Profession is disjointed and appears to only be run in favour of its self and its senior management.

    The Retail Distribution Review (RDR) that wants to make all advisers charge fees to clients existing and new is way out of line. Most Clients want the option to pay fees or use Commission to pay the advice they want.

    The RDR will take away the choice and lead to less money being put aside for peoples futures,not more.

    This can only lead to a poorer society, and that is a bad thing.

    The present Government is useless in running the country and does not understand how business works and how its constant interference is not helping this country move forward.

    Bring on the General Election and the landslide result that the Conservatives will undoubtly get.

  • Comment number 25.

    It's an exclusive club so what did we expect from Turner? Even-handedness, much needed reform proposals, anything that forced the banks to act with more responsibility and with some sense of morality instead of being motivated purely by greed? If we did then we're naive, Turner is a member of the bankers club, he's got his eye on the period after his stint at the FSA so the taxpayers are merely straw dogs to him and his chums. They all make me want to throw-up!

  • Comment number 26.

    I agree with Robert's assessment. Now is the time for radical action, starting with restoring the financial system to a state when it was "socially useful". It is utterly inconsistent to acknowledge that the changes of the last 10-15 years have wreaked incomparable damage on our financial systems and then to insist that restoring the controls that were removed is impractical, which, after all, simply means, "Not worth the effort".

    However, I can't help noticing that Robert has silently moved from offering analysis to offering opinion. Would it be entirely out of order to request an explicit acknowledgement of this shift in his writing? Opinion pieces have not hitherto been Auntie's thing, certainly not from her own staff.

  • Comment number 27.

    Just what was Adair Truner doing when banks were being "socially useless"?

    He was a Senior Executive at a pair of banks.

    For those interested and didn't know how well Merrill Lynch was run whilst Adair Turner was a Senior Executive then Robert summed it up quite well in a previous blog

  • Comment number 28.

    21. At 11:08am on 23 Sep 2009, proman53 wrote:

    "Turner has managed to turn an apolitical regulator into a spokeman for the far left and decimate the good work so many in financial services tdo to enhance teh well being of this country."

    Care to ellaborate and give some examples?

    How can Turner be a spokesman for the far left when he's talking about regulation of banking and not total nationalisation- after presiding over 10 years of a 'light touch' regulator.

    Do you know anything about the political spectrum of this country - or are you simply tattling your Tory election campaign on this blog?

    Unfortunately you will find yourself in a dilemna next summer as it's been widely recognised that the model of allowing banks to self discipline has failed dismally - so what is the Tory policy on this?

    Reduced regulation for financial services - or are they actually reversing their ideology in order to win the next election?
    ...thereby showing that they will say or do anything to gain power (as did NU Labour under Bliar)

    I don't see that the mouth of the crocodile is any better or worse than the mouth of the Lion.

  • Comment number 29.

    23. At 11:40am on 23 Sep 2009, stanblogger wrote:

    "Regulation will probably never really work, because, inspired by the large amounts of money to be made, clever minds will always find ways round regulations and the only result is to distort the market."

    Common sense prevails - thank you stanblogger.

  • Comment number 30.

    Taxpayers are not "picking up the tab for investment bankers' recklessness"

    The institutions that needed the most support are:

    - HBOS (Lent too much & over-dependant on wholesale money markets)
    - Northern Rock (Lent too much & over-dependant on wholesale money markets)
    - B&B (Lent too much & overexposed to buy to let)
    - RBS (Bought ABN Amro & lent too much)
    - Dunfermline BS (Lent too much & over-dependant on wholesale money markets)

    No UK bank has been brought to its knees by 'casino' banking - Given that the two banks most involved in this (HSBC and Barclays) are the two that are still making good profits without taxpayer support, I don't understand why the agenda of splitting off investment banks is being pushed so hard?

  • Comment number 31.

    Good comment #4 Writing on the Wall.

    As an ex city boy did you ever take Das Kapital into work with you?

  • Comment number 32.

    I must say I have been encouraged by the blogs today - it seems more and more people are seeing through the lies and hypocrisy we're being bombarded with.

    19. shireblogger - Good info and good questions posed at the end.

    20. peterdough - Inciteful and honest evaluation of the current statement from Adair

    25. The-Hunnic-Hoardes - harsh and to the point but nonetheless true.

    26. PorterRockwell - yet more confirmation of the farce we're being subjected to

    27. Ian_the_chopper - demonstrating yet again that lies cannot hide history anymore. 'rebirths' of ex-bankers into poitics is clearly an issue when they talk about regulation. It's the same result the BMA get when they have doctors assessing other doctors for transgressions and failure of their duties.

    It's got to the stage where the insight provided by the 'norms' is far more revealing and useful than Robert's piece which seems to have missed the gaping holes in what Adair said.

  • Comment number 33.

    The cause of the credit crunch is being over-complicated. Simply we borrowed too much; people, companies, governments, banks and asset managers.

    All the talk of bonuses, investment banks being split off etc is fiddling round the edges. The growth we have had for the past decade has been funded by a massive credit bubble that was the result of the FSA allowing the banks to engineer financing to provide the public with all the credit they wanted, irrespective of if it could be paid back...

    There is a lot of blame to go around; at the moment, bankers are getting more than their fair share.

  • Comment number 34.

    On this blog we have discussed, again and again, the deceptive schemes that ALL banks employ to maximise their profits (leading to greater bonuses) and to exploit the societies that, unfortunately, host them to their own peril. Is anyone able to clean up the 'untouchable' banks?
    Offbalance sheet 'vehicles', 1000 affiliates in tax havens, etc., etc...

    The global shadow banking system moves a minimum of
    10 Trillion US Dollars around the world, largely untaxed and unsupervised.
    Who still stop this madness?

    Please read, at your leisure, a collection of articles and resources to expose the murky offshore and tax haven world, where trillions of the 'profits' from our societies are recycled and parked (often with the collusion of the big UK banks) until an opportunity arises to make even more money, here:

  • Comment number 35.

    Agreed, Robert, that Turner's line is inconsistent and the option of "splitting up the banks into different types" is a much better one.

    But he is an open thinker and may well yet change his mind, given the range of interesting ideas he was prepared to countenance in that interview in Prospect magazine, and given the enlightened result of his pensions investigation (where he basically accepted that the City of London was too self interested, too greedy and too expensive to be able to provide decent value pensions to ordinary people if left alone to do the job by itself).

    But very glad to hear your view that Mervyn King is heading towards the right option. Let's hope all three political parties - not just the Lib Dems - see the electoral popularity of the idea.

    We've got to face it that the City of London (OK, you could say the whole of the global financial services industry) has become one enormous "complex monopoly" with grossly inadequate levels of competition, unbelievable opacity and complexity, and ultimately huge cross-subsidy from us lot who have to put our money somewhere.

    By being able to link the one very small part of its operation that just has to have a state guarantee to all the other things that it does principally for its own benefit, in such a way that no-one can untangle it, the "financial services industry" has ensured that us suckers have to underwrite the whole thing.

    I'm sure once Turner works fully through his 'living will' idea, he will see that the only thing to do is split banks up.

  • Comment number 36.

    When you read these types of comments I wonder who is actually running the country.
    The financial industry appears, to me, to be holding the country to ransom. They appear to feel that the country owes them a living. Yet failure is ripe within the City of London. How many other commercial managers expect the taxpayer to bail them out. Where is their social responsibility?
    Yet here we are again. The banks once again expecting the hard-pressed British taxpayer to accept these massive payouts and bonuses.
    Then, when we expect the authorities, such as the FSA, to bring these people to task; require them to be accountable for their actions; and to protect the interests of the British public all we get is some watered-down half-hearted proposal.
    So I return to my original question......who runs the U.K.? An elected government or a small group of self-interested bankers who care nothing for the misery they have caused the rest of the population?

  • Comment number 37.

    Adair Turner...

    Government appointee
    Vice Chairman of Merrill Lynch Europe 2000-2006
    Part time lecturer in economics
    'temporary' chairman of some government body on Climate Change

    Spouting on


  • Comment number 38.

    I would add intellectually suspect and morally repugnant to the phrase `socially useless'.

    It is the sort of thing that made the decent sort to once demand that there should be a law against it. Come to think of it why isn't there a law against it? I bet there probably is but nobody is prepared to use it.

    I will ask a question once again: what is the prospect of a banker or ten appearing at No.1 Court of the Bailey to answer certain provisions under the Theft Act? Surely some of the activity of last year and earlier can be construed as attempting to obtain a pecuniary advantage.

    The other day there was a news item about the number of rape cases that were not being prosecuted. In this instance the entire country has been raped and nothing is being done. So much for the law, then?

  • Comment number 39.

    Typically trenchant Preston: I await the FSA's and the banks' responses with interest, however they come about.

  • Comment number 40.

    Robert, I have just read a very worrying and very convincing statement that explains, to some extent the rise in the stock market.

    The assertion is that some, if not a large part, of the Quantative Easing and Tax Payer bailout money has been used in financial transactions - thereby boosting the stock market - and thereby earning lots of nice commission for our dear banking clowns.

    Is this assertion correct ? Has the result of a Tax Payer bailout and QE been a stock market bubble and champagne for the city ?

  • Comment number 41.

    30 & 33 Rowls76

    I read your posts and I can assure you that casino banking did lead to the credit crunch.

    The invention of the CDO allowed large profits to be made from investing in what appeared to be low risk.

    This then drove down the LIBOR as banks were feeling confortable with their cash deposits and large money making CDO collection.

    The long period of low LIBOR encouraged banks like Northern Rock to set up based on inter-bank lending.

    The low interest rates which come with a low LIBOR (because lets face it the BoE lost it's metal a long time ago) encouraged others to lend more and in more areas (B&B, RBS etc.)

    It's true that low interest rates by the Fed and the BoE didn't help, but essentially the casino gamblers were on a roll - and just like real gamblers, when you're on a roll others want to join in - and you loose the true value of money (because it's not earned, merely won).

    All crashes begin with speculation - it was the case in 1929 and it's the case now.

    History doesn't change - only the characters involved do.

  • Comment number 42.

    @33 Rowls76:
    "There is a lot of blame to go around; at the moment, bankers are getting more than their fair share."
    Well, Eve was certainly to blame for biting into the apple. But what is the fair share of blame for the snake?

  • Comment number 43.

    Its obvious to all the retailing and merchant banking activities need to be split.The big banks are making billions with the assistance of the implied UK government protection.Let's keep it simple, one thing we do know is that if a tri-regulatory systems did not work,the chances of internal company regulations working is none existent. You only need one megalomaniac at the top for the systems to be manipulated.

    The CEO's of these large organisations don't want above and will avoid at all costs because it will burst their mega bonuses,but its the right thing to do for the UK economy in the long term.

  • Comment number 44.

    The bonus system was the fuel for the fire of unqualified loans. Upfront rewards for products that would fail. The current approach is a discussion of structure and structure does not address ethics. Criminal prosecution for criminal activities would be the best way to deter future activities. Of course the banks went to the elected officials to insure that unethical behaviors were not considered criminal. The best way to cure gamblers is to let them be responsible for their losses. Maybe if some bank board members had loss their homes to cover losses the industry would be more understanding of the problems they have created.

  • Comment number 45.

    When I say Turner is one of them need I say more? Was he not the boss of the CBI at one time and an enthusiastic supporter of Margaret when she remove all restrictions on the export of capital allowing untold £ billions (trillions?) to be taken out of the country by the members of the CBI and which initiated the complete loss of our once strong manufacturing base; when she introduced the flexible free unregulated financial market making our economy into a services economy; when her cry was for government to keep their mitts off.
    A digression: when companies take over other companies I understand they finance these from issuing of their stocks or more often than not pay cash borrowed from banks. But surely the banks are too short of cash to lend the £ billions these people obtain? Under the present circumstances should this allowed especially as much of the money is the tax payers and these mergers etc are of dubious if not zero value to the people who are taking the main brunt of the catastrophe - indispensable salary/wage earners via reduced spending and increased taxes?

  • Comment number 46.

    32. writingsonthewall wrote:

    "I must say I have been encouraged by the blogs today - it seems more and more people are seeing through the lies and hypocrisy we're being bombarded with..."

    Or perhaps those would-be contributors with more moderate views have simply wandered off, tired of the way in which this blog is dominated by a dozen or so extreme reactionaries who spend their time praising each other's posts and shouting down anyone who disagrees?

  • Comment number 47.

    At least air is still free.

  • Comment number 48.

    36. At 1:20pm on 23 Sep 2009, EuroSider

    Some good points raised - and I would like to clarify a few mis-conceptions

    1) The banks don't "run the country" - but successive Governments have been running up an unpayable tab with them. Who runs your business - you, or the bank which lent you the money? (most small businesses are at the mercy of the bank)

    2) All recessions start in banking, sometimes they do co-incide with other events which make convenient scapregoats - but fundamentally they all start with a 'banking crisis'.

    3) The public have short memories and the Government use this to their advantage. By confusing the public by finding a 'new cause' to every recession they stop the public blowing the whole gaffe and putting a stop to it.

    4) People will generally blame those who are weaker then they for their problems. For years the general public has (and still does) see the unemployed as the source of their woes, doing nothing for something. If they had actually looked up to the ladder they would have seen the bankers who get paid a fortune for doing very little (constructive) and a lot (destructive). Again the politicans use this to their advantage because we've had thousands of 'welfare reforms' but 'parlimentary reforms' and 'banking reforms' only seem to happen once a crisis or scandal is exposed.

    Lies, lies, lies and more lies is what we are facing but the deception of the general public has started to show signs of cracking.

  • Comment number 49.

    Vince Cable wrote today in The Guardian a very interesting article how
    the G20 should focus on tax havens and the significant imapact that this issue has on public spending cuts and reduced taxes.
    According to his article the UK government estimates that it may lose around £22 Billion per year due to questionable schemes of tax avoidance and illegal tax evasion. I think this is a very conservative estimate. The banks are playing a crucial role in these schemes, as they are moving the money around.
    Please find the article here:

  • Comment number 50.

    33. At 1:02pm on 23 Sep 2009, Rowls76 wrote:

    "There is a lot of blame to go around; at the moment, bankers are getting more than their fair share. "

    I've picked up on this before, but as long as people keep defending the bankers then I will keep saying it.

    The anger towards banking is not merely this crisis, nor is it the last 10 (caused by banking) but a historical dislike of unelected people having such a large say on the running of our lives.
    Ever since FRB was invented the bankers have been mathematically strengthening their position through wealth accumulation at a cost to the rest of us.

    If bankers had made this one slip up then I could understand - but they have screwed up and screwed over throughout history and it's time it came to a stop.
    At the end of the day nobody wants to live in a police state, but with the way credit scoring works many people will end up falling foul of the law for doing nothing more than 'borrowing' - an option more and more are forced to do such is the relative reduction in wages to living standards.

  • Comment number 51.

    38. At 1:24pm on 23 Sep 2009, stanilic

    Very true - and this is what crisis brings to the table.

    Following the robbery of the tax payer people rightly start to question what is the point of the law?

    Is it to stop Governments illegally invading oil rich nations? - errr no

    Is it to stop Baronesses employing illegal housekeepers? - not really

    Is it to stop MP's fiddling expenses? - conveniently exempt.

    Is it to stop banks setting up a Ponzi scheme and then extending their bonus frenzy with tax payer money instead of the wealth extracted from future production? - clearly not.

    ....and that's why it will all end in a rebellion against all law - when the chips are down we can see which side the law sits on - and it's not yours or mine.

    That is why it needs to be actively disobeyed through protest - demonstrating the power that if the public do not wish to be Governed by a law which is not fair - or that protect the few - then it shall not be so.

    Protest doesn't have to be a violent beating by police on the streets - how about writing to Lord Adair in your thousand showing your disatisfaction at the authorities ability to solve 'the greatest crime in history'.

    400,000 letters will bring down the FSA as it does not have the manpower to handle them all. Failing to answer them is a dereliction of their duty.

  • Comment number 52.

    35. At 1:11pm on 23 Sep 2009, Noideaatall wrote:
    "given the enlightened result of his pensions investigation (where he basically accepted that the City of London was too self interested, too greedy and too expensive to be able to provide decent value pensions to ordinary people if left alone to do the job by itself)."

    Not quite right Noideaatall. Turner's mistake was not to increase the state pension enough, meaning more reliance on private saving which goes back to City firms in the end. And the new vehicle he started for a large part of that private saving - personal accounts due to start 2012 - was specifically set up to favour wholesale investment banks.

  • Comment number 53.

    Has anyone else noticed the numerous cagey statements regarding recovery from the recession?

    The CBI released another one today basically saying that 'the recession is over, but you might not notice - but we can assure you it is'

    I'm still hunting for Baroness Vadera's green shoots - apparently these were in the credit markets - but I think the thousands of FTB's unable to get a mortgage might disagree!

    251 days since that comment and I've been able to grow whole courgettes in that time, from green shoots to full vegetable - there must be something seriously wrong with Baroness Vadera's compost - maybe too much methane in it!

  • Comment number 54.

    44. At 2:02pm on 23 Sep 2009, ghostofsichuan wrote:

    "The best way to cure gamblers is to let them be responsible for their losses"

    Anyone who has lived with someone with a gambling problem knows the last thing you would do when they suffer heavy losses is to lend them money to get straight - as you say taking away the responsibility.

    So when banks gambled and lost what did the Government do? - EXACTLY THAT!

    Unfortunately getting it back was going to be difficult unless we're going to start repossessing mansions or yachts in Monaco. The banks were clearly prepeared for this to happen as they placed their activites 'outside the law'.

  • Comment number 55.

    It's a question, really, why the obvious logic of separating retail banking from the casino banking is being so strenuously avoided both by the banks and by the regulators?

    People keep saying that the abolition of Glass-Steagall and the link between retail and investment banking resulted in an effective tax-payer guarantee for the risky investments - hence the problem.

    If so, then perhaps there too is your answer. I can see why the banks want to keep this, but why would the regulators agree? Presumably because the withdrawal of this guarantee, and perhaps also the capital value of people's retail deposits, would precipitate another crisis.

    Other posters have referred to the fact that the banks still have a lot of toxic assets overhanging their balance sheets. Knowing the scale of this problem might tell us how long the (retail) banks will have to go on ripping off their customers before they have repaired their (investment) bank balance sheets.

  • Comment number 56.

    For all those calling for the implementation of the Glass-Steagall act - aren't you worried it will simply get torn down like it did in the US?

    "The deregulation philosophy would pay unwelcome dividends for years to come. In November 1999, Congress repealed the Glass-Steagall Act—the culmination of a $300 million lobbying effort by the banking and financial-services industries, and spearheaded in Congress by Senator Phil Gramm"

    ...does anyone have $300 million to lobby the Government to introduce it? - This is the scale of what you're up against.

    I'm all for the act, but this is a real David and Goliath task.

  • Comment number 57.

    "While opinion at the Bank of England has hardened in favour of breaking up the banks, of separating their retail operations from their so-called casinos (see my note last week, "Banks can learn from retailers"), Adair Turner retains a touching faith that regulators will in future be able to eliminate the risk of taxpayers picking up the tab for investment bankers' recklessness through the judicious application of variable capital requirements."

    Spot on again! Variable means subject to change. As soon as the figure is agreed upon banks will be claiming this it's too high, and using other parts of their business to get around it. To me, that looks like the system that we had.

    Narrow/Limited Banking is the answer. Until that idea gets some real traction, we're just spinning our wheels until the next crisis.

  • Comment number 58.

    Post 40 I would suggest a slightly alternative view as to why the stock market has risen by so much this year.

    From a peak of approx 6,700 the Footsie fell to approx. 3,500 earlier this year. The stock market, whatever they might tell us, is ruled by the herd mentality.

    I imagine many shares were sold as people (and I mean banks, companies and investors in general when I say this) needed cash and needed it urgently. They couldn't sell property for love nor money so the obvious "near cash" assets able to be redeemed very quickly are stocks and shares.

    In a slow market a great inbalance of sellers to buyers causes the price crash to be exagerrated further and it becomes a self fulfilling prophecy that share prices falls more.

    Earler this year when the stock market hit rock bottom roughly six months after the Lehman's bankruptcy it became apparent that the major governments wouldn't let any more banks go bust that we weren't facing financial armageddon.

    As such as rebound to where the Footsie is still 25% below its peak is probably to be expected. Whether the Footsie is fully priced or has room to go on upwards though is a different matter.

  • Comment number 59.

    45. At 2:04pm on 23 Sep 2009, poorgeriatric

    Part 1 - yes he was.

    Part 2 - What's most revealing is the number of companies who are selling shares at the moment to raise cash. This indicates a number of things:

    a) Large companies would rather go for the more expensive route of issues than going to the banks - is that a reflection on their stability of the lack of credit availability?

    b) Some claim it's for 'aquiring new purchases' and others say it's to 'repair cash holes' - either way the result is a dillution of existing shareholder value and the dillution of the share market as a whole. (the more there are of any commodity - the less they are worth)

    c) If the issues continue to come - along with the increasing bond sales (by Government and Corporates) the market will start to feel flooded - and that's when things can go really bad.

    d) Banks make a lot of money lending to businesses - what does the lack of appetite from businesses do for the balance sheet of banks?

  • Comment number 60.


    I note you are still here ;-)

  • Comment number 61.

    46. At 2:09pm on 23 Sep 2009, rbs_temp wrote:

    "Or perhaps those would-be contributors with more moderate views have simply wandered off, tired of the way in which this blog is dominated by a dozen or so extreme reactionaries who spend their time praising each other's posts and shouting down anyone who disagrees?"

    ....or perhaps they simply awoke from their dream of 'Capitalism works' when they were faced with it clearly not working.

    P.s. - no-one can shouted down, it's a blog so there is no volumne. I think you'll find your describing the situation where you make such an out-of-touch statement that several people pick holes in it at once.

    It's happened to me before - but I call it learning from others and realising your assumptions may not have been correct.

  • Comment number 62.

    If we are looking at a radical re-think is it feasible that competition could drive stability within the banking industry? If the Government were to categorically state that it will not use taxpayers money to bail out a banking institution again. Then impose on banks a process whereby a simple grading system (based on capital reserves etc. and easy to understand for consumers) is created, published monthly and required on all advertising and in their windows allowing consumers to decide where to place their money. This could be used for each division (safe / casino) of the bank. Banks would then need to ensure reserves are sufficient to create competitive advantage.

    You may get higher rates at a bank which has a poorer rating but any money lost over and above FSCS levels would be at the consumers risk.

  • Comment number 63.

    "Socially useless"....I like that.
    But there is one socially useful enrich the pockets of City workers at everyone elses' expense.
    City staff have got to be the most "pampered" lot in the universe.....stick it all in your pocket when the going is good, and when you mess up, everyone else will bail you out......then the government will provide exceptional circumstances for you to ramp up the profits again (at the expense of savers), so you can stick it all in your pocket again.
    Consideration for the public....irrelevant.
    Major damage to the public good....irrelevant.
    Damage to the rest of industry and business.....irrelevant.
    Millions of unemployed.....irrelevant.
    Wrecked pensions......irrelevant.
    As long as those City boys can keep on shovelling it in their pockets, all is well?
    I can't see the unions taking too much more of this abuse of privilege.
    I thought the financial industry was supposed to be a public service.

  • Comment number 64.

    The chairman of the FSA???!!!

    Ask anyone who had a problem with the endowment policy mis-selling how much protection the FSA gave to the public.

    A poodle of the City, that was, and most likely still is, the FSA.

    It will be gravy train as usual.

    All will blow over soon enough and they will all be back to their me, me ME behaviour that caused them to be given billions by this inept government.

    But he was only following orders; when Brown was chancellor he wanted it to be easy in the city of London, so that all the crooked money and deals were done here, rather than New York or Europe, with the profit rake-off staying here, ... Oh how that has bite him on the ...

  • Comment number 65.

    7. downhome:

    "#1 - Couldn't agree more.
    (Re)create a Postbank such as you will find in the Netherlands and other European countries from the retail parts of the tax-payer owned banks. There is a huge (although shrinking) network of branch offices for whom an injection of new business would surely be socially useful in keeping open local Post Offices that are under threat of closure.
    As for Adair Turner not being the banks' enemy - no surprise there. His background says it all."

    A good idea, but two things need to be considered here.

    First, the Post Office's existing banking arrangements are based in Ireland, which seems a bit dumb.

    Second, I would challenge anyone to name a more incompetently-managed organisation than the Royal Mail.

    So, in persuading the public to use a Post Office-based bank, there is one heck of a credibility gap to be bridged........

  • Comment number 66.

    Well said, Robert. Breaking away the casino parts of banks is the way to go. Also having adequate capital on the utility side to prevent bank collapses. I KNOW you are on the right track Robert. It is a great pity you aren't in charge.

  • Comment number 67.

    The financial sector has lost enormous sums in the last year or two.
    Where have they all gone? They must be in someone's pocket.

  • Comment number 68.

    Have the Mods gone on strike again?

  • Comment number 69.

    ""46. At 2:09pm on 23 Sep 2009, rbs_temp wrote:
    32. writingsonthewall wrote:

    "I must say I have been encouraged by the blogs today - it seems more and more people are seeing through the lies and hypocrisy we're being bombarded with..."

    Or perhaps those would-be contributors with more moderate views have simply wandered off, tired of the way in which this blog is dominated by a dozen or so extreme reactionaries who spend their time praising each other's posts and shouting down anyone who disagrees?""

    If I am a reactionary in wanting an explanation of where these take over chants obtain huge sums of many £billions of money from for their transactions which as far as I am concerned is to benefit their own ends only then I am indeed a reactionary. The banks appear to able to find these large sums but not money to the small man. As rbs appears to be an apologist to those people who dragged us into this mess maybe he/she can use his/her expertise to give an explanation. By the way what is your moderate view rbs?

  • Comment number 70.

  • Comment number 71.

    33. Rowls76
    There is a lot of blame to go around; at the moment, bankers are getting more than their fair share.

    Oh I don't know. Bankers should be rightly proud of their new found unpopularity.
    After all that effort they put in to get it!
    At the moment they're up there, quite rightly withering in the publics' furious glare alongside politicians, just slightly below the rank of pedophile. And the brilliant thing is they don't care either, flaunting their rapacious greed with each new bonus grab and golden handshake financed by taxpayer bailout monies, whilst those same taxpayers join the ever swelling ranks of the unemployed or unhoused.

    They could have chosen to lay low for a few years, turned down the money until things were looking better, or made a few very public charitable donations to homeless groups, made some kind of reparation, and they'd have been forgiven and would probably have gotten away with it again. But they didn't. They just couldn't!

    I urge them to keep demanding every bonus penny they can get their hands on, after all, in the long term they're quite publicly putting a rope around their own collective neck, as their greed drags their corrupt economic system down with them.

    Keep it up lads! The public is watching.

    And waiting.

  • Comment number 72.

    At 09:43am on 23 Sep 2009, John_from_Hendon wrote:

    Confusion Marketing is Bad for everyone....


    Spot on, I now move my business from any Company who

    a) Fails to offer me as an existing Customer the same benefits as a new one
    b) Fails to make their products etc simple to understand.

    But until we have a revolution ion our Parliament, the so called 'Ombudsmen' will always favour the Companies and Hell will freeze over before anything is done about it.

  • Comment number 73.

    ghost @ 44

    the bonus system was the fuel for the fire

    undoubtedly, and even now they won't change - in almost any other industry (clothes manufacture, software engineering, coal mining ... whatever) the consensus is if we don't control our costs, the business will go overseas - but those good old bankers (yet again) have managed to turn this on its head - if they don't keep their wage bill sky high, then the business will leave the country - and we take that seriously! - even now - truly amazing - it's like they think they're The Beatles or something, when all they are is the middleman between people who have money, and people who want to borrow it - god help us

  • Comment number 74.

    Well it's taken the best part of a year of pretending that all was well but now at last the City is squirming. The financial losses are getting crystalised into real life balance sheet dramas. And politics is inexorably overtaking economics as the driving force in our country.

    Turner knows the City is going to be slowly and surely eviscerated by our politicians over the coming years...he is merely trying to ingratiate himself with his soon to be new masters.....make a note please Mr. Osborne that Turner isn't a was all them others!

    The City of London has been a miserable failure for Great absolutely appallingly run and unjust waste of talented people and money.

    The devastation being wrought on our island due to the misguided, ill thought out, selfish and arrogant philosophies of the Financial Elite and their coterie of pseudo academic cheerleaders is forming into the worst peacetime crisis in our country for 90 years.

    Forget Turner, forget casino capitalism, forget regulating your way to a brighter future. Forget protectionist Sterling will blow up in our faces......the ONLY way out of this hole is to put people to real jobs not finanacial NON-JOBS.

  • Comment number 75.

    It appears #writing on the wall# doesn't have a clue on what Turners remit is meant to be! Or appreciate his recent comments are personal yet he has chosen to cross the line between personal and official as though the two are one and the same.

    I am no political candidate and see my reference to far left comments was purely factual because they only understand taxing and 'redristributing wealth' as the way to progress when we have all seen it does nothing of the sort.

    For too long we have seen Brown trying to pull the strings from behind the scenes and now in the front of house we have seen both he and Labour implode. All his appointed cronies are now either running for cover or seeking to defend the indefensible.

    When you look at the facts, you will see he has been neither prudent nor judicious in his operations and has left UK plc in an absolute mess which generations to come will have to spend cleaning up.

    Turners Tobin Tax and his outburst against bankers and clearly exposes his political leanings but given he has changed them so many times over his career are we to really take what he says seriously. Unfortunately he os getting publicity for thise when it's not his position to expose them.

    That is why he is now tarnished goods and must go. There are no regulators or industries immune from fault and all need updating and being on top of events with their ears firmly to the ground.

    That can't be said of the FSA who only spark into operation after the horses have bolted.

    Other contributors have commented on Turners previous jobs but do not appreciate he was not in them for his banking knowledge but his contact book. To take the stand as he has is untenable and no doubt when the Conservatives take power forming the next government we can see Turner change political tack again.

    It's a shame "writing on the wall" has been unable to appreciate the bigger picture. But it's great the BBC is prepared to print all opinions even if some like those by him actually contribute nothing to the debate in hand.

  • Comment number 76.

    "protects our savings" ???

    Our saving are fast being stolen by a thousand cuts, price rises, direct and indirect tax increase.

  • Comment number 77.

    anyone who thinks that some of the comments here are radical should listen to French President Sarkozy's speech today at the General Assembly of the United Nations. This was an amazing speech.
    Please allow me to give you two short quotes from his speech, concerned with the financial crisis and the issues we debate here on this blog.

    President Sarkozy (23/09/2009):
    "Hope to those who are paying for errors that they did not make,
    Hope to those who are outraged by the behavior of those who still continue to grow indecently rich, after leading the
    world to the brink of disaster,
    Hope to those who fear that, if we do nothing, they will be the victims of ecological and political catastrophes brought
    about by the depletion of natural resources and global warming,
    Hope to those who are still dying in absurd wars from another age, while humankind has so many challenges to face,
    Hope to those whose lives are growing harder and harder, who feel that they have been lied to for so long about the real state of the world,
    To all those we owe an answer."

    As well as this quote from his speech on tax havens and financial speculation:
    "We need to eliminate tax havens, all of them. They are hiding places for money derived from speculation and fraud.
    We need to curb the price swings of commodities that are subject to excessive speculation, starting with oil, since the
    economic, social and human costs of this volatility are unsustainable."
    You can find the full text of the speech here:
    [Unsuitable/Broken URL removed by Moderator]

  • Comment number 78.

    Hello...this is my first sojourn onto the BBC site....I am an RBS shareholder and have to say I lost money last year... I am a retail worker and earn £6.04 per hour and I tried to spend my pennies wisely...I love the market....I also have to say Robert that my spirits dwindled as I listened to you and indeed it sounded like the voice of doom and yes the share price went down down down, and it was not helped by shorting as I read comments, or maybe bragging, on trading sites and comments by people saying it was easy money.....I sold out as I was scared and bought in low and was also scared and am now sitting on profit...any trading site will tell you that the price can go up or down......what I would like to say is that people will always find ways of being better although I doubt they intend making the world more miserable....the market is not for the fainthearted ...if bankers are boring how come the world went up in smoke? would be nice to hear something nice about the banks soon and indeed it would mean I could get a new would be lovely if everyone could stop damning everyone else as I would never find out anything in my job if I did not go out and seek knowledge for my own comfort and peace of mind and ignore more homework I say and then we can only blame ourselves...I look after my mother at home and the market is an interest and keeps us free from the state as it surely has enough to deal with..please everyone stop the finger pointing and lets get on with it and return confidence as old people don't read between the lines and feel very threatened by dramatic headlines when in fact it is all hype and self interest...maybe this comment is too...kind regards

  • Comment number 79.

    #78 misswinwin1

    I wish you sincerely all the best in your work and life.
    Unfortunately, exactly to protect people like you, it is very necessary to expose what went wrong and what brought the world financial system close to collapse in the past year. We cannot repeat the madness that had gripped the financial institutions over the past few years. If there is an illness it has to be cured, you would agree. Again, all the best for you and don't be scared, we may even get a better and more just financial system over the next few years. There is enough money in the world, only the current wardens of the wealth (those naughty bankers and speculators) haven't yet understood what a decent society will soon make clear to them. No worries, the end to this unregulated financial madness is near.

  • Comment number 80.

    post 33..There is a lot of blame to go around; at the moment, bankers are getting more than their fair share.....
    Rubbish, the investment bankers have had a victory because we should be discussing the length of the jail sentances at this time..

  • Comment number 81.

    #75 quite

    Adair Turner

    member of the conservative party when at Cambridge
    joined the SDP
    now considers himself apolitical

  • Comment number 82.

    #30 and 33

    Dear Mr R Owls

    You are right. The banks that got into trouble in the UK lent long and borrowed short

    I suppose you could call that a form of betting ;-)

  • Comment number 83.

    65. At 4:28pm on 23 Sep 2009, Friendlycard wrote:
    A good idea, but two things need to be considered here.
    First, the Post Office's existing banking arrangements are based in Ireland, which seems a bit dumb.
    Second, I would challenge anyone to name a more incompetently-managed organisation than the Royal Mail.
    So, in persuading the public to use a Post Office-based bank, there is one heck of a credibility gap to be bridged........
    Correct me if I'm wrong, but is Royal Mail in a mess because
    a) When Royal Mail made a profit, Government simply took it using it as a cash cow and so little re-investment was possible?
    b) The current state of Royal Mail is that it delivers everyones else's mail - I've seen Deutsche Post trucks deliver their mail to my local Post Office ( I presume for RM to then take away and deliver, if so why not tell Deutsche to go deliver their own, or does anyone know whether this is the case, and if so, whether Deutsche pays a discounted price?) I believe that in 2002, Deutsche Post was granted a license to deliver mail in the UK, breaking Royal Mail's monopoly, do we know if they do so , or just exploit RMs business?
    c) Re (b) above, was it not EU legislation that forces Royal Mail to lose its Monoploy, and hence the hiring of incompetent managers to run the business down so it can be sold?

  • Comment number 84.

    82. At 10:42pm on 23 Sep 2009, mrsbloggs13c2 wrote:
    #30 and 33
    Dear Mr R Owls
    You are right. The banks that got into trouble in the UK lent long and borrowed short
    I suppose you could call that a form of betting ;-)
    Couldn't agree more, although I also have some sympathy with Mr R Owls, as by coincidence I was reading somewhere today how the US Freddie Mac and Fannie Mae were sort of US Political experiments in Socialism (or vote buying?), lending to those who wanted the American Dream to be a reality (that may be an accidental American pun?) despite not being able to afford it, and many Presidents of all parties piled in with their two penneth, until it all fell down (I know I've missed out how the Bankers decided to exploit such foolishness, but still, maybe we can't just blame Bankers and Capitalism, red in tooth and claw though they and it may be. Somewhere at the heart of the UK and US disasters lies a Politician, and hey, they're still lying there, if the Risk Analyst observation earlier is true - what a pity I ain't one (Risk Analyst that is), I need a job, they pay well and boy, aren't there just a lot of them wanted! Anyone know, should I start dumping my few remaining shares now, or should I find a Risk Analyst to ask?
    (PS The NHS also seems to want lots of IT people, only they have to have previous NHS experience, and interesting conundrum there, how do you get it if they won't employ you without it? Maybe they keep you alive for ever if you work for them, but I digress, it would appear that the largest Govt owned 'industries' are the main hirers at this time, and we are supposedly coming out of recession – thank God for that, what would it be like if we weren’t?!)

  • Comment number 85.

    @ 84

    yes that's right, this is a crisis of socialism - thinking "outside the box" ... I like it!

  • Comment number 86.

    1. Credit crunches can happen with narrow banks. Everyone, customers and bankers, lose confidence - the conventional wisdom changes, depression hits the animal spirits.
    Such banks can make huge losses and go bankrupt, robbing depositors of their funds.

    2. Kay's argument applies to narrow banks driven by profit. 20 quid to tell you you've overspent your limit is 19 quid profit out of you without a credit swop derivative in sight

    3. You think the governement shouldn't ensure that crashes sketched in 1. don't harm depositors?

    Kay's position is good politics, bad economics.

    Partly the latter because who gained, who lost from the crash is somehow not properly considered, swept under the carpet, by this concentration on politically attractive Glass Steagall style pproposals.

    It also conceals the wilfull squeezing of the US sub prime buyers by an interest rate hike, under Greenspan, identical to that in hte year before the Japan 1990 10 year slow motion crash.

    Both sides of this argument assume that private capital can be regulated - which it can't.

    The real problem is the way the financial evaluation of real sector firms
    is tied in to wealth creation and distribution and to the wage profit bargain. The former simply by the rich getting richer by bidding uyp their own papoer assets (as in the current Ftse bubble) the latter by that inflated value of capital demanding the same rate of profit from fixed output - and so demanding lower real wages.

    (That the 'crash' causes heavy and persistent unemployment but is itself 'cured' by sufficient inflation of paper assets should make us all wonder to what extent such crashes are the deliberate constructs of some very hard headed capitalists. (You only have to recall Thatcher's deliberate creation of 5 million unemployed to fight the unions to know that capitalists think tough and are prepared to accept short term self damage (the collateral industries that suffered from Thatchers attacks on steel and coal))

    Government spending is threatened by speculative booms in shares and houses because, in such times, it is argued, the economy cannot satisfy both sorts of spending (both incidentally, demand and, in the case of paper asset inflation, money creating). So it's true to say that private asset inflation, with its concommitant luxury goods expenditures, crowds out government spending.

    That is the case that Kay and Turner need to answer before we can take their ideas seriously.

    The problem is private irresponsible capital which CANNOT be controlled.

    Ownership of capital which determines the rate of growth, of unemployment and the distribution of wealth and income is the problem.
    Evaluating the value of firms is a simple job for competent accountants. In pretending to do that, private capital acts to make its owners richer and richer, by adopting ruthless short and long term strategies.

  • Comment number 87.

    I doubt that Obama is snubbing Brown but having taken over from Bush a great nation’s leader who hand lost the plot the White House aids are not wanting to then have him talking to other world leaders who fit the same bill. Now that makes an interesting list.

    Socio-economic policy has been ruined by a lot more than just the banks It is little use calling them for not living up to social responsibility they did not live up to economic responsibility either and by a long way.

    Nor did they have any interest in maintaining strong business and farming in the UK happy to see it go to other parts of the world - better for trading that way more markets to manipulate.

    The banks and some collaborating government departments have a lot more to answer for than just - socially useless – the banks have always held that badge even Thomas Jefferson warned of that back in1802

    There is an entire thesis on the mistakes of UK banks, government and regulators but unless we get our collective heads round a radical new global social economic system Then we are all going to work our way out of this recession only to find ourselves back here in 2017 and we UK will have less authority at the table of power than we have now.

  • Comment number 88.

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

  • Comment number 89.

    The problem for the public is that the government and the banks are so intertwined that the government is going to talk a lot about restrictive action but,like everything else about New Labour, will in reality do very little.Even now Alistair Darling is trying to make out that the recession caused the problems with the banks, when the truth is that the government's poor regulation of the banks caused the recession. The bonus culture is entrenched in New Labour and pervades every policy that they implement, even education and the NHS.What we need is a government that will rein the banks in now but it's not New Labour.It's probably time for people to start taking their money out again because then if bonuses are paid it won't be with their money.Wonder how the banks would feel about bonuses then?

  • Comment number 90.

    " 77. At 8:00pm on 23 Sep 2009, invisiblehandadvisor wrote:
    Colleagues, anyone who thinks that some of the comments here are radical should listen to French President Sarkozy's speech today at the General Assembly of the United Nations---------"

    Not seen this speech on our informative media - obscurantism??

    I always understood Sarkozy as being right of centre. If he is then Brown must be extreme right wing and Cameron ----.

    Maybe the moderator would let us have the suitable URL or maybe invisiblehandwriter repeat the correct one? l

  • Comment number 91.

    Of course Mr Turner wishes to preserve the larger banking entities. This gives the FSA more power and allows them to have a role separate from the Bank of England in regulating powerful organisations. It is NOT in his interest to split up the banks even though it IS in the taxpayer's interest.

    Ultimately, we cannot afford to have shadow banking systems implicitly having one way bets. If, by preserving the large banks, we expose taxpayers in underwriting risky investments, then let's break them up. I have no problem with people making supernormal profits from risk taking. What I object to is allowing such people to have one way bets on the taxpayer!

  • Comment number 92.

    Banker bonuses.

    If it wasn't for the taxpayers of the world they wouldn't have a job let alone a bonus.

    Hence - I propose that the banks must pay by law the same total bonus to the taxpayer in the same timescale as they do their staff - It seems the least we can expect.

    If they cant afford it then they cant pay a bonus to anybody.

    Enough said.

  • Comment number 93.

    #58 Ian_The_Chopper

    Post 40 I would suggest a slightly alternative view as to why the stock market has risen by so much this year.


    Well actually no it isnt an alternative view, go look at the BoE publications about what they say has been happening with the money from Quantative Easing.

    You'll find a simple explanation here: [Unsuitable/Broken URL removed by Moderator]

    There was a document created prior to this one that highlighted a fear of an asset/stock market bubble as a result of QE, but I cannot find that document any more, mostly because there are so many now ??

    As quite clearly stated one of the aims of APF as they call QE has been to boost asset prices (stocks) and improve corporate credit markets and pensions etc as a result. Thereby making companies/people "feel" more wealthy etc.

    I note that there currently a lot of large companies raising cash through the stock markets (getting in on the action), quite a lot of these are banks yet again. Doesnt this ring ANY alarm bells ?

    The truth is QE/APF money has created a stock market bubble - rather than money being lent to businesses as we all know. Isnt it nice to know that in times when the man in the street is loosing his job, his house or taking a pay cut the man in the bank has had his job secured and his income boosted all at the expense of the tax payer.

    Isnt it good to see manufacturing jobs like Rover being rated as worthless, yet the financial industry which has caused the biggest ever losses the world has ever seen has been rescued and reinvigourated at the expense of everyone.

    Three cheers for the rich as they leave our shores to the tax havens.

    I can see SOME worth in what has been done (pensioners), however in the background the knowledge that the compound transactions (ie lots of them) that are going on filtering off as much commission as possible tells me this country is hopelessly corrupt.

  • Comment number 94.

    All this is a bit rich from the head of an institution that was supposed to regulate the Banks but who were asleep on the job. The FSA are as culpable as the Bankers.

  • Comment number 95.

    To bundle up AIG, Citibank, Lehman Bros, Washington Mutual, UBS with Northern Rock and RBS is a joke

    and I don't know who WE is, if we is the UK tax payer, we didn't have anything to do with bailing out AIG, Citibank, Lehman Bros WaMu or UBS.

    And this is what happened after Lehman collapsed...

    "Goldman Sachs Group Inc. won approval for a New York State banking license to transform into a bank holding company and take deposits.

    Goldman Sachs Bank USA will have its headquarters in New York City, the New York State Banking Department said today in a statement.

    Goldman, which was the biggest U.S. securities firm before converting to a bank holding company in September, applied in October to become a full-service, state-chartered bank instead of a national bank like rival Morgan Stanley. Goldman was one of nine major U.S. banks that received a total of $125 billion under the U.S. government’s $700 billion rescue plan for the financial industry."

    Morgan Stanley has converted too and marriages of convenience were encouraged by 'the powers that be' for the other old investment banks

    In fact... on 26th September 2008 "The SEC today said it will stop supervising the financial health of securities firms now that Goldman Sachs Group Inc. and Morgan Stanley, the last two under its watch, are becoming commercial banks overseen by the Federal Reserve."

    So to suggest splitting out the investment banking is the way to go runs completely counter to what has happened over the last year.

  • Comment number 96.

    75. At 6:40pm on 23 Sep 2009, proman53 wrote:

    "It appears #writing on the wall# doesn't have a clue on what Turners remit is meant to be! Or appreciate his recent comments are personal yet he has chosen to cross the line between personal and official as though the two are one and the same."

    proman - Turner doesn't seem to know what his own remit is (as he found himself deflecting the issue about controlling pay)

    My point was that Turner is hardly a 'spokesman for the left', at best a spokesman for the 'centre left'

    I suspect Adair is just trying to make sure he isn't thrown in with the other bankers and is trying to distance himself to appear to be on the side of the public.
    However as many have pointed out he had ample opportunity to show where his loyalties lie - and he chose to do nothing.

    ...and I think you'll find my objections were your comments thus:

    "Given the Conservatives have already announced the death warrant of the FSA we should all rejoice."

    ....this indicates to me that you're clearly a supporter of the Tory ideology of 'less regulation' because although I think the FSA is fairly pointless institution - it's all we have to protect us against the powerful financial sector - a paper shield it may be - but at least it's a shield of sorts.

    My annoyance is the dragging out of party 'boo ya' politics where you imply that it will all be fixed under a new Tory leadership, an idea which is founded in a complete reversal of their economic ideology.

    i.e. They will say anything to get elected.

  • Comment number 97.

    31. At 12:55pm on 23 Sep 2009, gruad999 wrote:

    Good comment #4 Writing on the Wall.

    As an ex city boy did you ever take Das Kapital into work with you?

    gruad999 - I am not ex - I am still here.

    Yes, the best solution to a tube delay is a few pages of Das Kapital, you're probably wondering how many here have read it...

    ...well very few, and most who did have either forgotten or never really understood it in the first place. Worse still is some people with Economics degrees have never seen it!

    I found it very hard to read, but that's why I'm on my 4th time round now. Most people find it too hard and give up without properly understanding it.

    However don't think I limit myself to Marx, I have ploughed through Mises and Friedman in order to get the full picture (as well as some classicals) - you cannot defeat the arguments of the Liberals until you fully understand what they are.

  • Comment number 98.

    #78 misswinwin1

    Why as someone who works in retail earning £6.04 per hour are you gambling on the stock market?

    You are investing in something where the deck is fixed for the big boys and the whole casino will inevitably collapse one day.

    Confidence is not what causes booms and busts - it's the system which it's based on.

    I don't bet on horses because I know nothing about them, but it seems too many people are willing to take the risk with stock markets.

  • Comment number 99.

    In his interview, Lord Turner commented on the "socially useless" practices in the banking sector and accepted that the FSA had made mistakes that have contributed to the current banking crisis.

    I would like to highlight that the banks are not alone in adopting "socially useless" policies. When the Financial Sevices Compensation Scheme was set up, it was decided that credit unions - small voluntary organisations providing financial services to the socially excluded - should be included in the main fund and pay levies on equal terms with the banks. It was pointed out at the time, that if a major bank failed there was a major risk to credit union liquidity.

    Despite this known risk, Credit Unions were included and are now faced with massive bills. These ongoing charges undermine the work that volunteers are carrying out daily to provide services for the socially and financially excluded throughout the UK.

    There follows a copy of a letter of protest to the FSA.

    I would ask the BBC to help us to have this matter investigated at the highest level.

    The Financial Services Authority
    Fees Section
    25 The North Colonnade
    Canary Wharf
    London E14 5HS
    Friday 11th September 2009

    FSCS Exceptional Levy
    Invoice No. SDD08¬-00491

    Dear Sirs,

    Our members and directors wish to challenge the validity of the above invoice on the following grounds:-

    1. The responsibility for these charges rests with those who took the decision to include credit unions on equal terms with mainstream banks when the FSCS was established. This is akin to hitching a pram to an intercity express on the grounds that the baby will reach its destination quicker. Surely a breach of the most fundamental rules of risk management.

    2. The regulators were seriously negligent in permitting credit unions to be included although the potential for massive and possibly fatal liabilities was clearly recognised from the outset.

    3. Given the continued problems confronting the UK Banking sector, this potential risk still exists. The imposition of these charges will increase the risk by undermining the already fragile capital base of credit unions.

    4. The independence of the regulator is seriously undermined by their role as debt collector for a major credit union creditor, namely the FSCS. This dual role is a clear conflict of interest. A diligent and independent regulator would be capable of recognising that a serious problem exists (for credit unions) and lobby the government for an alternative means of funding.

    5. The extent of the contingent liabilities has been known to the regulator since the failure of the five UK banks in 2008. The FSA continues to fail in its duty to alert individual credit unions to the scale and long-term nature of these contingent liabilities.

    6. It is morally unacceptable and contrary to natural justice that credit union volunteers should be required to do unpaid work to collect monies on behalf of the government.

  • Comment number 100.

    83. At 00:05am on 24 Sep 2009, TheEnglishman

    I totally agree with your points aout Royal mail - as I mentioned previously modern day Governments abuse public bodies and run them into the ground so they can then produce an excuse for selling them off.

    What people don't realise is that a privatised mail system won't be interested in delivering to the Hebridies or other remote places in England with low volumne. To be fair there won't be a single carrier, but lots of smaller ones which prevents the economies of scale the post Office enjoys - allowing it to make these types of delivery.

    I live in London, so my mail will contine to arrive, but I am not so selfish to ignore the problems others will face under privatisation - especially as I might retire to a remote place in England one day!


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