Published on 19 Jul 2012

Banks, drugs, Mexico and jobs at the top

So Paul Moore, formerly responsible for compliance at HBOS and who was sacked after warning in 2004 that the bank’s lending was risky and in serious danger of-heating, has applied to be the Chairman of Barclays.

Mr. Moore, whom I met and talked with extensively last week, is unlikely to be hanging around his phone in the expectation of a Barclays call.

Although, I have met no one who knows quite so much about where the more noxious of the banking bodies are buried.

Mr. Moore’s request to replace the resigned, and currently un-resigned Chairman of Barclays, Marcus Agius, provides yet another bizarre notch on the bedpost of British banking. The explosion of scandal in the banking sector feels like something that hasn’t been seen since the South Sea Bubble burst in 1720.

Yet the South Sea Bubble was miniscule in comparison with the multi trillion dollar scale and global ramifications of what is happening now.

We started July with millions of RBS customers unable to access their own money because of what was described of a wrongly applied ‘computer patch’.

Then the Financial Services Authority announced that effectively all the big banks had been involved in the scandalous mis-selling of PPI interest rate swap products and would have to pay it all back.

The FSA emphasised that small businesses and ordinary personal customers had been the targets of the mis-selling of untold quantities of financial products they never understood, and never needed. Lloyds bank alone has made provision of some £3.2 billion to pay compensation.

When Barclays was convicted and fined here and in America (some $450 million) for ‘manipulating’ the Libor rate which provides the daily benchmark for the setting of most inter bank lending across the world, we wondered if it could get worse. It could.

The US reported that all the British big banks were on a list of some twenty global banks being investigated for the same thing. Individual traders had made extraordinary quantities on money through the practices and individual customers had, on occasion, suffered higher rates than those that that were in reality in play.

Then this week it was revealed in Washington DC that HSBC had been laundering billions of dollars of drug gangsters’ loot. The bank’s compliance Director resigned there and then in front of the Senate Banking Committee, but not before releasing documents that revealed that he had told the then HSBC chairman of the ‘problem with Mexico’. The bank is expected to be fined somewhere around  $1bn.

Amid all this, the runners and riders to take over next year as Governor of the Bank of England have been under scrutiny. Sir Mervyn King’s Deputy, Paul Tucker, is one. No one knows whether conversations with Gordon Brown’s Downing Street during the 2008 financial meltdown will have improved or reduced his chances. But two other names  that were in play, namely John Varley, former CEO of Barclays, and Stephen (now Lord) Green, formerly CEO of HSBC,  have fallen out of the reckoning spectacularly.

Both men were on deck during the period of both the mis-selling and the Libor ‘manipulation’. But Stephen Green had the additional accolade of being CEO and then Chairman of HSBC as his bank provided those money laundering services for some of the most violent, exploitative, and evil drug barons on earth.

Lord Green is now not only the Minister of Trade, but since October he has also been on the Cabinet Banking Committee, and George Osborne’s advisor on banking.

The question Peers tried to raise last night in the House of Lords was how long this arrangement could continue. Thankfully, for Lord Green, the Lords be-wigged authorities were able to shut the matter down.

Will the rest of us have short enough memories to let the matter rest once the politicians return from the beach?

Article topics

Tweets by @jonsnowC4

13 reader comments

  1. Philip Edwards says:

    Jon,

    This fraud will last as long as mainstream media allows it to. And since media were part of it guess what’s likely to happen.

    The problem is, honorable exceptions apart, news delivery has next to no conscience. Too many regard news as a daily commodity to be mixed with right wing propaganda. This applies to even the relatively more informed and intelligent journos.

    Remember award-winning writer Antony Sampson, author of the “Anatomy of Britain” books? In theory, few journos knew more about the British power structure than he. But he still got caught up in the Lloyds insurance scam of the late 80s and early 90s. For all his “knowledge” he still couldn’t resist the whisper in his ear when it came.

    Which of you now is bothered to remember the BCCI scandal, or the crash of 1987, or the impoverishment of most of our country, or the MI5 plot against Harold Wilson, or the parade of swindlers and crooks that infest London? Enough of us warned you what was going on. Most of you still ignored it.

    I am glad C4 News takes the stance it does on this issue. But don’t kid yourselves. It will fade as quickly as it can be brushed under the carpet by the establishment.

    1. IAS says:

      I agree that this ‘show’ or collaboration between the media, Politicians and CEO Bankers will continue and continue as long as they want or need it to. It is the ‘ordinary’ person who will continue and continue to suffer , as direct result of these weaknesses and failings.

      The statement ‘we are all in this together’ reflects this seemingly ongoing relationship I have outlined above. The best comparision to what has not happened to CEO bankers, is what has happened to rioters who caused distruction in our communities – peoples lives, homes, businesses and possessions. But yet, these individuals were, at least, arrested and some jailed…

      I am still waiting for answers to who created the recession that caused international distruction to the lives or more people than these rioters managed to do.

      Why wasn the media NOT willing to talk or even use the words ‘fraud’ and ‘CEO bankers’ in the same sentence in 2008? WHY ONLY NOW?

      When we have seen ‘ordinary’ people’s HOMES being taken away from them by these same Bankers, the media and politicians stood silent!

      It’s about time the news media started interviewing and listening to the views of ordinary people more.. much more!

  2. David L Atkinson says:

    The only answers – separate investment and retail banking. Also cap share dividends to the level of inflation and tax at 30%

  3. Saltaire Sam says:

    For years we have been told that obscene salaries and bonuses, tax dodging and high-on-the-hog expense accounts were the price we must pay for ‘getting the best people.’

    Now it turns out these geniuses are at best incompetent and lax in their duty, at worst greedy blood suckers verging on criminality.

    And what are the politicians doing about – the politicians so quick to slash benefits and condemnt ‘shirkers’ – Nothing, zilch, not a thing.

    Still at least William Hague is there to tell other countries how they should run their affairs.

    I’m approaching 67 years old and cannot remember being more disillusioned.

  4. margaret brandreth-jones says:

    If this is the tip of the iceberg which most people suspect, then we could be under sea quicker than we think , global warming or not.
    How blind and accepting society has been for such a long time. ‘They know best’ has been the type of talk buzzing around generally and because they are billionaires and dealing in big money ,which we small salaried folks don’t truly understand( probably due to the jiggery pokery around)this has been the continuing way of wheeling and dealing.
    Computer patch wasn’t applied properly..sure. a few days interest on the capital no doubt.

  5. david fowler says:

    Dear Jon Snow,Re – Trust in Banks ? Some 3000 years ago a wise man said, ‘Do not put your trust in nobles,nor the son of earthling man to whom no salvation belongs’
    Why don’t we all read the good book more often?Its all in there if one takes the time to look….and,
    you can Trust it!
    Well done c4 news, best news in the world,that is apart from the Good News of Matthew 24- vi4 .check it out. ATB DAVE F, WIRRAL

  6. David L Atkinson says:

    Having contacts in the USA as well as this country the banking debacle is global. We are not going to climb out of the crisis until we accept that the Banks were always profit making businesses first and a service industry second. The ordinary customer is a pawn in the similar way that ordinary people are the tax payers and fund the gross misuse of money that the well-healed, decadent leaders of all nations indulge in.
    However, it seems that the only solution is to back manufacturing and food production in an effort to correct the down turn we are experiencing.
    The reason that the crisis is deepening is because of investment and borrowing. In Spain for instance they are going down rapidly because they produce nothing and lending them money at an increased rate of interest is causing greater problems. If you lend money to people who can’t pay then you lose the money! This is why the crisis began and why it is worsening. Loans = risk! bad loans = disaster.
    The only way an investment can be solid is if it is in a company that produces products that people need. Then of course it has to be possible for people to have enough money in their pockets to pay for goods!

  7. Harry Alffa says:

    It’s really very simple, tax the banks and bankers according to performance indicators of the real economy.
    When its bad, tax them more, when its good tax them less.
    Its called a feedback mechanism. I told you it was simple.

    Set an income tax on bankers according to how much drug use there is in a country.
    See? Feedback mechanism.

    1. IAS says:

      Yes Harry, sounds good in theory, but is government really so eager to get into the fuzzy business plans and their unsimplistic financial projections to achieve this goal? I think not!

      I think that ‘principle’ needs to the be action for good practice here. In applying this attitude, the seperation of retail and casino-type business in these banks has to be the platform that secures consumer savings and that also enables bankers to make risk based decisions on other financial investments in the bank.

      But, we now know that politicians do not have the appetite to split these two extremely different banking operations. Why?

      The emphasis for achieving NEEDS to always be placed on the heads of BANKERS, and not banks! In doing, government will send out a strong message aimed at improving ethics and overall good banking practices in these banks.

      We have to STOP talking about Banks as if they run themselves, and begin by talking about Fraud and CEO Bankers whose responsibility at the helm means has always meant they should have been arrested for failings the banks in 2008. Not a good political picture for Democratic standards!!

  8. James Lingard says:

    Current UK banking legislation requires every director, controller or manager to be a fit and proper person to hold the particular position which he holds. Regard is had to probity, competence, diligence, soundness of judgment and oppressive or ‘improper’ business practices. There is a conflict between profit motivation and acceptable banking practice.
    The nub of the reforms now required is: (a) the protection of depositors; and (b) promotion of the UK economy by ensuring that retail deposits are used to finance UK businesses and house purchases. It is unacceptable that protected deposits are used to fund investment banking speculations. These may be profitable but are akin to gambling with taxpayer’s money.
    For a fuller discussion on Bank Reform go to http://www.risklibrary.net/abstract/heading-bank-uk-law-vs-prudential-risk-assessments-14075 and e-book Bankers to Bankruptcy.

  9. Gary Mortensen-Barker says:

    The first 2 posts hit the nail squarely on the head. Many thinking people are shunning mainstream media now as the TV ‘news’ is not news. It is more like propaganda for some sort of new world order.

    1. IAS says:

      Gary, I agree with you and others.

      The tax-payers BBC is probably the Mother of all failings in this area – lacking balanced debating opportuntiies and spilling both propaganda and rhetorical information where possible, which is continually soaked-up into the minds of those who are already ignorant, and unable to have an open mind towards such reporting.

      The BBC (or should I say our BBC) has also failed to have a BIG studio debate about the practices of CEO bankers that created the recession, weak-soft touch political policies that were abused by these bankers and an informed and fundamental balanced studio debate about climate change – whereby scientist from both sides of the argument can be Judged by the Country.

      This democracy thing is just not working!!

  10. David L Atkinson says:

    I believe that the BBC and most other media companies have spent time getting so close to the centre of power in the country that they have moved further away from ordinary people and ‘real’ daily life. Of course that is not surprising when salaries are considered. The sad fact is that the BBC will never relate news as it is or provide truly balanced debate, for fear of upsetting the corporate masters!

Comments are closed.