£20 Billion to promote lending whilst the Bonuses go on:

[Steffan]

The latest brainwave from the Coalition in the UK is to provide the funding desperately needed by small businesses in the UK with government guarantees from the taxpayer.

Who else?

Because despite all the determined efforts of George Osbourne, David Cameron, Vince Cable, the Bank of England, the Treasury and the entire government, the Banks will not lend to small commercial businesses in any volume in the UK. Even though the entire Banking Sector only exists because the Taxpayer bailed them out totally three years ago.

And at the same time the Banks are unable to repay the investments made by the taxpayer because years of recovery will be required with full bonuses during that period for the bankers, of course, in order for that recovery to be effected. Possibly. If the bonuses allow it.

Have any of the lessons that should have been learned in the Banking crisis?
I fear not.

Do politicians not realise that the blind greed that is driven by the lottery win bonuses and uncontrolled Bankers desire for instant wealth are precisely why we got into this mess in the first place?

Why not suggest to the Bankers that Millions of pounds worth of bonuses would become payable to them if they devised a way for this lending to be effected.

That would do it. Surely better than another 20,000 Billion from the poor taxpayer?

Bankers are obviously driven by personal aggrandisment.

Use that motivation to make lending commercial businesses their greatest wish.

If ever there was a clear demonstration that, the pygmies in parliament, are not up to the job, this must surely be the classic case.

Over half the Banking sector is there only by the grace of the taxpayer.

The real problem is of course, that successive UK Governments have become adept at grossly overspending and grossly overborrowing to create the spend in the easiest possible way.

Politicians thereby being in a position to lavish Benefits, Public Sector salaries and unaffordable lifestyles onto a sufficiently large section of the population so as to ensure being reelected at the next election. Self serving and utterly wrong.

Taxation is already at stratospheric levels and is not realistically capable of greater recovery. Therefore Politicians of all parties, have embraced utterly unsustainable borrowing levels en masse.

So borrow, borrow, borrow, became the mantra of government in the UK

Now, creating ludicrously expensive private finance initiatives under the last government, selling all the Public Utilities under the governments before that, and similar artificial devices, have become the Politicians way to find enough money to keep the merry go round running.

Finally, Cameron's latest brainwave, has arrived, whereby leasing or selling all out roads and transport systems to private investors, has been wheeled into play, to enable yet more unaffordable expenditure, because borrowing is getting tricky and taxation can yield no more.

We all know that we cannot live like kings on a pauper's income.

Apparently the Government do not see any difficulty in doing just that.

The mugs are of course us, the taxpayers. Paying for everything and getting nothing in return.

Is there anyone who believes that the Banks are operating in the national interest, whilst being able to be paid huge bonuses, being only able to survive through the taxpayer loans, with their bonuses and remuneration packages, utterly unrelated to the position of the rest of the country?

Meanwhile the government create 20 Billion funding to persuade the banks to deign to lend to the businesses that might just rebuild our Economy given half a chance? When the Banks should be doing just that themselves.

It seems madness to me. Unsustainable, stupid madness.

[Steffan]

Not necessarily.

Successive governments have rewarded reckless lending with a no strings bail out, job security, permanent employment and easy pickings all without addressing the fundamental issues of the Banking Crisis.

This is beyond the ability of our pygmy leaders. That is the problem.

None of whom have any real experience of working in any industry. Look at George Osbourne and Cameron. Or Moonpig and Balls up. Can you really believe they are capable of solving our economic problems?

Hardly.

This is capable of solution.

But not with governments made of politicians who are largely inexperienced wet behind the ears apparatchiks.

That is the problem.

[Steffan]

Soovy.

I would think you work in Financial Services or Financial Investment.

Would I be right?

[Steffan]

Soovy said:

Marf said:

Steffan said:

Soovy.

I would think you work in Financial Services or Financial Investment.

Would I be right?

Check his profile, lawyer working in derivatives. What is the relevance of that?

He thinks that I am working for one of these mythical companies which has total job security (no it doesn't - look at what has happened at Worldspreads last week), huge bonuses and unlimited champagne and hookers for all concerned.

He has no clue at all about how the City works, and what we do. We are scrupulously honest, heavily regulated and have a professional conscience at my shop.

Very revealing Soovy.

Can you just explain to me why the banks went bust if everything is so well regulated and secure?

Please.

[Steffan]

Sonic said:

Steffan said:

Very revealing Soovy.

Can you just explain to me why the banks went bust if everything is so well regulated and secure?

Please.

Because the regs were flawed.

"Blame the game not the player."

I do not disagree with you. My question therefore is this:

If the Regulation, or lack of them, were responsible for the collapse of the Banks why are we paying bonuses to the Bankers?

And

Should the Regulators not be the primary concern if they are responsible for the market conditions?

[Steffan]

Soovy said:

P-Jay said:

The day after, all my colleagues and I were herded into a crowed room to listen to an short speech via a speaker phone, where our new Chief Exec (second day in the job if I recall) gobbed off in management speak for about 90 seconds and then said, if you job title is X, Y, Z you no longer have a job - Classy. It was about 60% of the people in the room, he then gobbed off for another 45 mins telling us all how things would be so much better now these pointless roles had been removed - really enjoyed that as you can imagine.

My role and the role of everyone else who got their marching orders that day? Arranging loans and finance for Small to Medium sized business for RBS and its subsidiaries.

And, Steffan, this is the reality. There is ZERO job security in the City.

As I said, you know nothing.

Not out for a beer.

Walking on the beach with a three year old and a five year old. Bliss in the sunshine back home now.

Soovy, I think you have the same problem as religious believers.

You believe that only believers can understand your principles which may well be true.

But not much of an economic argument.

There is a fundamental problem with almost zero lending to small businesses in the UK. What is your answer to that?

Ignore it? Blame the government. Pretend it will go away?

Mine is to find a way of facilitating the Banks to lend. The governments is to throw £20 Billion at it. Naturally of Taxpayers Money. Not their own.

What is yours?

[Steffan]

Du1point8 said:

Steffan said:

Sonic said:

Steffan said:

Very revealing Soovy.

Can you just explain to me why the banks went bust if everything is so well regulated and secure?

Please.

Because the regs were flawed.

"Blame the game not the player."

I do not disagree with you. My question therefore is this:

If the Regulation, or lack of them, were responsible for the collapse of the Banks why are we paying bonuses to the Bankers?

And

Should the Regulators not be the primary concern if they are responsible for the market conditions?

bonuses and regulation are not linked. Regulation is more linked to the government.

The last government deregulated the market a hell of a lot and partially couldn't keep their fingers out of dabbling/messing about with things the don't understand... but did they care, nope not with all the cash coming in.

Bankers get paid bonuses for a few reasons:

1) wanting to keep existing staff and not wanting to lose them.
2) Sometimes contractual.
3) If they make a profit then why not?

I understand the reason you give.

However where in your calculation, do the individuals who received bonuses in lending in a way that ultimately led to the destruction of the Bank and complete insolvency, saved only by the unwilling, unasked Taxpayer bailing out the banks, contribute to the bail out of the business they ruined.

In the UK system there is no method for such redress.

The RBS Directors and senior staff could and should have been prosecuted to the full extent of the law. Not a single one has been pursued.

Reckless trading over several years reduced an institution to complete penury. This was undoubtedly actionable. Too many snouts in the same trough IMO.

What price bonuses, remuneration packages, and gilt edge pensions then?

I find it fascinating that the Bankers blame the Regulators and the Regulators blame the Bankers.

Jobs for all the boys, I am sorry to say.

[Steffan]

Newc said:

Steffan said:

Sonic said:

Steffan said:

Very revealing Soovy.

Can you just explain to me why the banks went bust if everything is so well regulated and secure?

Please.

Because the regs were flawed.

"Blame the game not the player."

I do not disagree with you. My question therefore is this:

If the Regulation, or lack of them, were responsible for the collapse of the Banks why are we paying bonuses to the Bankers?

You do understand, don't you (rhetorical question, as you clearly don't), that the organisations paying %age-P+L based bonuses are in general not the organisations under political pressure to increase industrial lending ?

In two words? So what?

My concern is, that it cannot be right that the only way the government can achieve lending within the UK to small businesses is to do it itself, or even worse to take all the risk and let the Banks skim off the top.

It is the results that worry me. The government cannot persuade that banks to commit this lending despite months of trying.

We are a small island and there needs to be unity of purpose at political and Banking level in policy agreement nationally. Clearly there is not and the result is a mess. The relative merits of the different levels of banking are unimportant.

The absolute lack of output in lending terms is the key.

How do you suggest we address it?

[Steffan]

NorthernBoy said:

Steffan said:

Soovy.

I would think you work in Financial Services or Financial Investment.

Would I be right?

Heaven forbid you should listen to someone who knows the business!

Oh, and I'll second his point about you talking rubbish. There has been a scythe taken to banking jobs and pay in recent years. To pretend otherwise is just ridiculous.

I am not sure that being a banker is necessarily the best way to assess the Banking problems. You view from within the system. That is different to viewing from without, but not necessarily better.

My concern is and remains, that nothing in any of the complaints against my original post, actually addresses the problems that I highlighted. The Banks are still not adequately controlled. The Banks are not lending to SME's in the UK as we need them to lend.

Interestingly several comments have suggested that the collapse of the Banking systems was the responsibility of the Regulators and not the Bankers.

I think that it just utter tripe.

But convenient tripe, which allows the argument that it was not the bankers fault, to be promulgated.

It is of course nonsense and IMO unsustainable nonsense at that.

The Bankers ruined their own businesses entirely by their own efforts. The Taxpayer became the fall guy who had to pick up the tab. I see no fairness or equity in that situation.

No one forced the Bankers to lend to anyone. No one assessed their risk in lending other than the Bankers. It was bankers refusal to lend to other risky Bankers that finally precipitated the problem. It was reckless and wholly unsustainable overtrading and lending by the Banks which created the crisis in the first place.

The Banking crisis was a banking problem.

No one else's responsibility. Bankers. Unfortunately it has become ours.

If you feel your argument is strengthened by telling me that I know nothing, in the hope that such a suggestion, supports your arguments that, is your choice.

I prefer to argue the case rather than the characters behind the argument.

I do think that, it is a coincidence, that the defences being put forward are very largely from Financial industry men. I expected that.

For the government to be unable to achieve any meaningful lending through UK Banking sources to support fledgling and growing SME businesses is disgraceful.

I have not seen one constructive suggestion as to how this could be achieved in four pages on the subject in this article.

If you think there is a better way then suggest that way forward. This is a small island nation that needs unity of purpose at strategic level in the economy.

Quite simply, we have not got that.

I think that is not surprising given the attitude of the Banks.

[Steffan]

rich1231 said:

Bing o said:

I think we should listen to Steffan.

The Euro went bust last autumn.

Muamba's prognosis could not be good.

Steffan, is there anything else you'd like to be wrong about?

He does it twice a day.

As other have commented on my Euro post, the Greeks went broke recently. It has been declared as a default.

The fact that the EU are playing silly idiots is up to the EU. It will not last.

If you think I am wrong on the Banks then that is your opinion.

However I would be interested to hear your means of achieving meaningful lending to small businesses with banking in the UK as it is.

[Steffan]

Clearly a fair number of people on OH think I am wrong.

The use of the word moron seems to me to be emotive and unnecessary.

In my opinion it is perfectly possible to have controlled prudent banking and achieve lending to SME's within the UK.

The fact that you do not is not my problem. It is yours. I think you are wrong.

My answer is I believe that if the Banks in the UK were organised and structured differently with genuine business growth as a prime objective we would do better than we are as an Economy.

I see absolutely no reason why this is unachievable or should not be a policy of government.

What we actually have is a Banking system that would collapse if the taxpayer withdrew their support. The Banks went bust not the British Taxpayer.

It is the Banks that need to change.

[Steffan]

Du1point8 said:

Steffan said:

Clearly a fair number of people on OH think I am wrong.

The use of the word moron seems to me to be emotive and unnecessary.

In my opinion it is perfectly possible to have controlled prudent banking and achieve lending to SME's within the UK.

The fact that you do not is not my problem. It is yours. I think you are wrong.

My answer is I believe that if the Banks in the UK were organised and structured differently with genuine business growth as a prime objective we would do better than we are as an Economy.

I see absolutely no reason why this is unachievable or should not be a policy of government.

What we actually have is a Banking system that would collapse if the taxpayer withdrew their support. The Banks went bust not the British Taxpayer.

It is the Banks that need to change.

which banks would collapse?

the policy to promote owning your own house was done via the government and was a policy forced on the banks, look what happened, how is what you are suggesting but to businesses this time any different from before?

If the government removed the guarantee from all the Banks offered to depositors the entire banking industry would collapse forthwith.

Do you honestly think anyone would leave their money in Banks in the UK unless there was an absolute guarantee of payment? The spectre of thousands and thousands of individuals queuing at Northern Rock is still fresh in the minds of the public.

I believe you are making the same mistake as the contributor who blamed the Regulators for the banking crisis, in suggesting it was the governments responsibility that the Banks grossly overlent.

The fact is the Banks got it totally wrong and in the ten years to 2008 the Banks managed to ruin themselves and the institutions that had existed as safe deposit takers for hundreds of years.

I am not defending the idiots Blair and Brown or the FSA or the BoE. They were all complicit in the madness.

But the primary responsibility for the collapse of banking in 2008 must rest upon the Banks themselves. No one forced any of the Banks to lend.

The Banks decided to borrow short and lend long, relying on the money markets to fuel the gap. They stopped. The banks collapsed.

Whose fault would you like it to be?

[Steffan]

Newc said:

Steffan said:

If the government removed the guarantee from all the Banks offered to depositors the entire banking industry would collapse forthwith.

This is true, and necessary, in every developed economy. Would you put your savings in a bank that didn't have deposit guarantees ? More importantly, how do you think interbank operations would work if every counterparty had to be credit risk assessed per transaction. You are an idiot and you continue to underline that with every statement you make.

We disagree. I think you are wrong. You think I am wrong. Your need to descend to abusive terms, reflects on you, not me.

You are quite right. The Banks need the government.

That is why it is ludicrous for the government to be unable to get any reasonable response from the Banks on agreement on prudent lending to SME's within the UK.

Clearly you see no need for this. I think there is a desperate need.

[Steffan]

Soovy said:

Steffan said:

Newc said:

Steffan said:

If the government removed the guarantee from all the Banks offered to depositors the entire banking industry would collapse forthwith.

This is true, and necessary, in every developed economy. Would you put your savings in a bank that didn't have deposit guarantees ? More importantly, how do you think interbank operations would work if every counterparty had to be credit risk assessed per transaction. You are an idiot and you continue to underline that with every statement you make.

We disagree. I think you are wrong. You think I am wrong. Your need to descend to abusive terms, reflects on you, not me.

You are quite right. The Banks need the government.

That is why it is ludicrous for the government to be unable to get any reasonable response from the Banks on agreement on prudent lending to SME's within the UK.

Clearly you see no need for this. I think there is a desperate need.

So I am right in thinking that you are struggling to borrow some money then, Steffan?

Are you one of the SME's which you say can't borrow?

No I could borrow as much as I want. But happily I am able to thrive without borrowing.

However I do think that there is no hope of restoring any manufacturing within the UK without a more responsive and practical approach to SME borrowing within the UK.

The government have gone down the road of creating a society where large proportions of the population have never work, have no interest in work and will never work.

Whether this was by design is another question. In reality I think it was the unintended consequence of the Welfare state started in 1945 with the best of intentions. Like so many politicians initiatives the unintended consequence become the primary effect.

We need to reorganise and rebuild the requirement to work in the UK.

Individuals need the discipline of having to get up in the morning and get their family and themselves off to work. Bringing up children is a vital role. But it cannot remove the need to work.

I see the SME lending as part of that process. I would far rather it was achieved by rational discussion between the Bankers and government. It is obscene IMO that the taxpayer is the bulwark behind the entire banking system yer the pygmy government cannot get agreement to minimal lending to SME's which might reduce the taxpayers burden and increase the opportunity for gainful employment.

If you think that is all nonsense, so be it. That is my belief.

[Steffan]

Soovy said:

Steffan said:

Soovy said:

Steffan said:

Newc said:

Steffan said:

If the government removed the guarantee from all the Banks offered to depositors the entire banking industry would collapse forthwith.

This is true, and necessary, in every developed economy. Would you put your savings in a bank that didn't have deposit guarantees ? More importantly, how do you think interbank operations would work if every counterparty had to be credit risk assessed per transaction. You are an idiot and you continue to underline that with every statement you make.

We disagree. I think you are wrong. You think I am wrong. Your need to descend to abusive terms, reflects on you, not me.

You are quite right. The Banks need the government.

That is why it is ludicrous for the government to be unable to get any reasonable response from the Banks on agreement on prudent lending to SME's within the UK.

Clearly you see no need for this. I think there is a desperate need.

So I am right in thinking that you are struggling to borrow some money then, Steffan?

Are you one of the SME's which you say can't borrow?

No I could borrow as much as I want. But happily I am able to thrive without borrowing.

However I do think that there is no hope of restoring any manufacturing within the UK without a more responsive and practical approach to SME borrowing within the UK.

The government have gone down the road of creating a society where large proportions of the population have never work, have no interest in work and will never work.

Whether this was by design is another question. In reality I think it was the unintended consequence of the Welfare state started in 1945 with the best of intentions. Like so many politicians initiatives the unintended consequence become the primary effect.

We need to reorganise and rebuild the requirement to work in the UK.

Individuals need the discipline of having to get up in the morning and get their family and themselves off to work. Bringing up children is a vital role. But it cannot remove the need to work.

I see the SME lending as part of that process. I would far rather it was achieved by rational discussion between the Bankers and government. It is obscene IMO that the taxpayer is the bulwark behind the entire banking system yer the pygmy government cannot get agreement to minimal lending to SME's which might reduce the taxpayers burden and increase the opportunity for gainful employment.

If you think that is all nonsense, so be it. That is my belief.

It was the opposite.

This was intentionally done by Labour to create a state dependent feral underclass and large immigrant population who would always vote Labour to keep their benefits.

They so nearly got way with it too. Only Brown's leadsership made them unelectable and scuppered it.

Well we agree on something. I thought we might.

There is a deliberate choice by Politicians primarily of left wing persuasion to create a federal underclass entirely dependent upon the state with no interest in work and no intention of ever working.

"Can be arsed" being the modern approach from the benefits society the New Labour party tried so hard to promote.

Not the slightest concern in New Labour for the taxpayer. They are tolerated as a necessary evil. To provide plenty of funding for the Benefit Society.

The hopes plans and future of New Labour is entirely focused on getting reelected so that they continue the good work. The Coalition is making the first tentative steps to stop this ludicrous unaffordable scamming but we need radical far reaching reduction in all level of benefits now.

The UK cannot afford this. One of the primary causes of government overborrowing.

My concern is firstly to force the majority of claimants into becoming aware of the need to work and really want to find a job.

Then to create sufficient job prospects within the UK to make this possible.

Hence my concern that the Banks are not supporting the SME funding requirement. This cannot be right given all that has gone on in Banking with the Taxpayer being the Knight in shining armour.

When RBS, Northern Rock and others were saved by the taxpayer the actual agreement was totally designed to support the Banks. There was never any commercial sense in the Taxpayer doing this. It was the philosophy of desperation emanating from the frantic efforts to save the entire Banking system.

Had the Taxpayer been doing something other than acting as the the lending in the last resort saviour, the deal would have been totally different. The deal was never a commercial deal it was desperation support and guarantees.

I therefore find the suggestion that the taxpayer will receive full value in the long term faint amusing.

We might but I doubt it. As the Northern Rock losses have so clearly shown there simply is not the value in these businesses that the Taxpayer saved from destruction.

But no commercial lender would have done what the taxpayer was forced to do in saving the Banks. To talk of fair value in that situation is ludicrous.