Banks Today Seem To Be Run By Liars and Crooks.
Another day another banking scandal.
Another day and another bank is hit by a huge set of fines for criminal wrongdoing that should have some senior executives facing a total loss of all they own and some serious jail time. This time it’s RBS, (Royal Bank of Scotland), and this failed organisation has just set aside another £3.1 billion, $3.8 billion), to cover claims by the United States authorities that it mis-sold mortgage products. (Mis-selling is a polite way of saying lying and cheating). This makes a total of £6.7 billion this useless bank has had to set aside to cover fines for selling toxic mortgages. RBS is 72% owned by British Taxpayers, so just who is paying these fines? Me and you, that’s who.
I sincerely believe that banking establishments are more dangerous to our liberties than standing armies. ~ Thomas Jefferson
Name any bank or financial institution, or any of the world’s major financial centres. from ABN AMRO, Barclays, Deutsche Bank, (just fined £500 million), HBOS, to Wells Fargo, and if you turn over a rock you will find people who only care for themselves and nothing for their customers, staff, shareholders, or the wider world and greater good.
I can pull the name of any bank out of the Bankers Almanac, and without trying very hard find that it’s rotten to the core.
Another wrinkle recently to come to light is a product called Shared Appreciation Mortgages sold by Barclays and Bank of Scotland. These complicated mortgages were deliberately targeted at older people, who were then rushed into taking unsuitable loans without having had proper financial advice. Which just goes to prove that one should never buy a product or take out a loan you don’t fully understand, and you should never, ever believe anything a salesperson tells you. (Never, ever date a salesman either.) Even a salesperson working for your bank.
To give you some more examples of dodgy dealing by banks, that pillar of German financial prudence, Deutsche Bank, owes $7.2 Billion to the US department of Justice for fines and penalties imposed for Deutsche’s role in the toxic mortgage crisis. Royal Bank of Scotland remains a basket case after Fred ‘The Shred’ Goodwin ruined the venerable institution through spending more time thinking about screwing his female junior assistant than he did about proper banking. And the oldest bank in the world, Italian Monte dei Paschi de Siena, has just been bailed out to the tune of £17 Billion by the equally broke Italian Government because of chronic bad lending that threatens the savings of a third of hard struck Italians.
How in the World did Banking become synonymous with dirty dealing, thievery, and dishonourable behaviour?
It isn’t because today’s bankers are struggling to turn loss-making institutions into banks that, at least, make a profit. And, it isn’t because there isn’t honest money to be made in the world of banking and finance today. Rather it’s because today’s generation of money-men want instant results, rather than slow and steady growth accompanied by slow and steady profits.
Slow and steady profits aren’t exciting enough for today’s young Masters of the Universe, who want instant and huge money-making schemes and products to justify their equally huge salaries and bonus packages. It’s estimated that in the City of London this year’s round of bonus payments will top $15 billion.
It is our priority to seek the best outcome for our shareholders, customers, and employees. ~ Ross McEwan, Chief Executive, Royal Bank of Scotland
I don’t believe a word of it. If the banks cared anything about their employees and customers they wouldn’t keep closing branches. Not to mention paying failed politicians like David Cameron and George Osborne a fortune to schmooze in Davos.
My advice is; stop trusting your bank, always carefully check your bank and credit card statements, never buy anything your bank tries to sell you, and never sign anything you don’t fully understand. Personally, I wouldn’t buy shares in a bank either, their roller-coaster world is far too crooked and exciting for me.
Proper banking is as safe and boring as watching paint dry.
these thoughts are mine, and mine alone
THEY HAVE LEARNED NOTHING AND FORGOTTEN NOTHING
After the abdication of Napoleon, Tallyrand was supposed to have coined the above phrase when speaking about the restored Bourbon dynasty to the throne of France. Einstein may have unwittingly borrowed from this when he gave as his definition of insanity as Doing the same thing over and over again and expecting different results. For another example of willful hubristic stupidity to which both quotations could apply you need look no further than the major banks of Europe and North America. The people running these organisations still seem to be completely lacking in ability, common sense, expertise, foresight, honesty and integrity. One major scandal after another appears in the press with such predictable regularity that nobody seems to take much notice any more. And, for a professional banker with 30 years experience, it is as plain as pikestaff what, why, when, how, where, and who went wrong in each and every case.
Bank of America was ordered to refund and pay fines amounting to about $772 million in April of this year because of it’s illegal charging of customers for credit monitoring and credit reporting services that were never delivered. Allegedly, there was an institutional culture of mis-selling in the bank’s telemarketing department, or so says the US Consumer Financial Protection Bureau.
In the UK the Co-op Bank has recently apologised for making a loss of £1.3 billion in 2013. The bank has also said that it does not expect to make a profit in 2014 and 2015. There is a strong argument for renaming this bank, as it is no longer a co-operative organisation, having already sold out to US hedge funds to plug a £1.5 billion hole in its balance sheet. Another £400 million is now required. The Co-operative Group is no longer the bank’s parent, and any claims the bank ever had to being an ethical organisation have vanished like smoke in the wind. The bank has admitted that these losses are due to ‘past misconduct and poor documentation.’ This is a supposedly ethical bank which has to pay £103 million compensation to customers for mis-selling Payment Protection Insurance, and another £114 million for overcharging on mortgage payments. The disgraced Paul Flowers, a drug addict who is also addicted to casual homosexual relations, had no abilities or experience to qualify his appointment as Chairman of the Co-op Bank. If nothing else that appointment says a lot about how badly this bank was run. I see no immediate signs of improvement.
Credit Suisse has pleaded guilty in US courts to criminal charges related to helping Americans evade taxes. The giant Swiss bank will pay a fine of some $2.5 billion. Eric Holder, US attorney general stated that hundreds of Credit Suisse employees, ‘conspired to help tax cheats dodge US taxes.’ If I were one of those Credit Suisse employees I would not plan on visiting the USA any time soon. This is not the first example of Bankers forgetting that they are not above the law.
Deutsche Bank is looking for 8 billion Euro, mostly from Qatar, and mostly to help the German bank pay fines, compensation and the cost of properly meeting regulatory requirements in its Investment Banking arm. Deutsche is another bank facing a shareholders’ revolt over plans to boost executive bonuses.
Standard Chartered has just suffered a shareholder rebellion at its Annual General Meeting. There was a 41% vote against its pay policy, the over-large number of executive directors on the board, the soft targets for top executives, high bonuses and a profit warning. Standard Chartered was recently fined £415 million for breaching US sanctions against Iran.
BNP Parisbas is currently trying to agree a $3 billion plea-bargain with the New York Department of Financial Services to resolve investigations into allegations that the French Bank violated US sanctions against Iran and Sudan, among other countries. Again, these are criminal charges. Employees concerned will be lucky if the worst they can expect is the sack.
British banks are facing an increasing number of complaints about fee-paying packaged accounts. Customers are paying up to £300 a year for supposed benefits they didn’t know existed or didn’t ever want. As banks see these packaged accounts as their new nice little earner, they are routinely rejecting customer complains, meaning the UK Financial Ombudsman’s disputes arbitration service becomes involved. Some 78% of referred complaints are upheld after initial rejection by the bank concerned. Some critics have said that this shows banks have a ‘rotten culture’ and that they have learned nothing from previous mis-selling scandals. As there are some 9 million packaged accounts already in use, we can expect the banks to be hit with another serious of massive fines for mis-selling in due course. British Banks have set targets for the number of these accounts sold by their retail staff, so expect customers to continue to be pressured into taking one of these useless products.
In 2013 Britain’s four largest banks; Barclays, HSBC, Lloyds and Royal Bank of Scotland were between them forced to set aside £21.5 billion to cover fines and compensation to customers. This is in addition to a total of about £25 billion incurred by these banks since the financial crash of 2008, in relation to meeting the costs of financial misconduct, including rigging the LIBOR market.
It’s not just in the major centres that bankers seem to have been making one monumentally incorrect decision after another. In Hungary, the banking sector faces costs of billions of florints to unwind the ‘foreign currency mortgages’ scandal. Anyone who thinks that borrowing in a currency where you have no income stream is a good idea should be locked up, bankers especially.
All of the above cautionary tales have some common causes. Monumental hubris and a complete lack of relevant banking expertise by the directors and management concerned at each bank. Worse than that, even a cursory look at the facts of each case shows a surprising reluctance to face the brutal truth by the people concerned.
Sadly, it is not only banks that seem to have an insidious culture of sticking the corporate head in the sand. Companies as diverse as BP, Glaxo-Smith-Kline, Pfizer and UBS have been hit with huge corporate fines in recent years. Often these fines are the result of mis-selling. You tell me why BP has recently been fined $34 billion.
The hard truth is; Any new or revamped product offered by a bank should be treated with the utmost suspicion. If your bank gives you any hassle, find another bank. George Bailey must be turning in his grave.