Rbs

Wednesday

James Forsyth

Stephen Hester’s departure: who would want the RBS job?

I do not envy the search committee tasked with finding a new CEO for RBS after Stephen Hester’s departure. The bank is an anomaly, publicly owned but supposedly run at arms’-length from government. However, when banking controversies hit, as they so often do, they hit RBS hardest as it is majority-owned by the taxpayer. I suspect that everyone approached for the job will be acutely aware that Hester has had to twice forego his bonus under political pressure. Hester has long argued privately that selling off a tranche of RBS shares would be a good thing, sending a signal that the bank would soon be returned to private ownership and

Monday

Isabel Hardman

Ed Balls tries to shake off child in a sweetshop spending image

Anyone reading Sam Coates’ interview with Ed Balls in today’s Times might be forgiven for chucking their newspaper on the floor with a chuckle, muttering about the hypocrisy of a Labour shadow Chancellor lecturing George Osborne on borrowing. Balls warns that the government’s plans to offer Royal Bank of Scotland shares to the public will add billions to the deficit. He tells the newspaper: ‘A giveaway or loss-making firesale at the current share price would and billions to the national debt at a time when poor economic growth already means borrowing isn’t coming down.’ But this is an attempt by Balls to appear fiscally responsible while making the case for

Thursday

Clarissa Tan

‘Bankers’ was not a documentary. It was a BBC hit job

I like bankers. They’re an honest lot. All of us like money, but only they are upfront about it. I once witnessed a conversation between three financiers that started with them comparing their cars, then their houses, then their helicopters. None of the shilly-shallying you find at a society cocktail party, where people slyly suss out your income on the basis of your profession, your postcode, your accent and the school you went to — these bankers went straight to unvarnished one-upmanship. Such frankness can be refreshing. I like bankers because, these days, somebody has to. The second episode of Bankers (Wednesday), the BBC2 three-part documentary that’s just ended, started

Thursday

Clarissa Tan

Bankers: I like them — somebody has to

I like bankers. They’re an honest lot. All of us like money, but only they are upfront about it. I once witnessed a conversation between three financiers that started with them comparing their cars, then their houses, then their helicopters. None of the shilly-shallying you find at a society cocktail party, where people slyly suss out your income on the basis of your profession, your postcode, your accent and the school you went to — these bankers went straight to unvarnished one-upmanship. Such frankness can be refreshing. I like bankers because, these days, somebody has to. The second episode of Bankers (Wednesday), the BBC2 three-part documentary that’s just ended, started

Saturday

James Forsyth

Selling RBS

The state owning banks is not a good thing. It is, as the annual row over bonuses at RBS demonstrates, very difficult to keep politics out of the running of the business. So, it’s encouraging news that the Treasury is moving to sell the government’s 82 percent stake as soon as possible. Today, the Mail and The Independent report that George Osborne is considering simply handing over the shares to taxpayers, who would then be able to sell them when they at a time of their choosing. As I wrote earlier this month, Osborne is very keen to avoid a row over RBS bonuses in February 2015, just three months

Friday

Isabel Hardman

MPs slam FSA’s ‘serious misjudgement’ on RBS

The Treasury Select Committee has published a stinging report this morning on the failings of the Financial Services Authority’s oversight of RBS. The MPs on the committee was unimpressed, concluding that the FSA could and should have intervened in the bank’s takeover of ABN Amro. Its members believe the regulator should have stopped the takeover, and they criticise the FSA for failing to investigate the failure. The report says: ‘In December 2010 the FSA initially felt that a 298-word statement about RBS’s failure was explanation enough. This reflects serious flaws in the culture and governance of the regulator. It also reflects a fundamental misunderstanding of its duty to account for

Wednesday

Isabel Hardman

Cleaning up the City cesspit

Good news from the City is something to cherish at the moment, and today RBS has confirmed that it will be withdrawing from the Asset Protection Scheme, through which the government gave the bank insurance cover against losses on its £282 billion toxic assets. Those assets have now fallen 63 per cent to £105 billion. This is good news in the ‘cesspit’, as Vince Cable called the City of London, because it marks the first step towards the bank returning to the private sector. One man determined to turn the focus away from the latest scandal to crawl out of the cesspit and towards a recovering City is new City

Sunday

Isabel Hardman

RBS next in line for Libor heat

The Guardian has published an interview on its site with Stephen Hester in which the RBS chief executive predicts his bank is facing a huge fine for its part in the Libor fixing scandal. He says: ‘RBS is one of the banks tied up in Libor. We’ll have our day in that particular spotlight as well.’ Hester can to a certain extent afford to be upfront about what is coming down the line for his bank. Even though it was clear from the start that there were other banks wading around in this swamp, Barclays took the majority of the flak as the first one to be fined. There might

Tuesday

James Forsyth

Osborne defends ‘rewards for success’

George Osborne’s speech to the Federation of Small Businesses tonight tries to offer some reassurance that the coalition isn’t caving into the anti-business zeitgeist. Referring to the recent rows over executive pay, he deplores rewards for failure before saying ‘a strong, free market economy must be built on rewards for success. There are those who are trying to create an anti-business culture in Britain – and we have to stop them.’ How reassuring business leaders will find this remains to be seen. As Robert Peston reported yesterday there’s a lot of grumbling from them about the government’s handling of the Hester bonus and other matters. (To be fair to Osborne,

Tuesday

James Forsyth

Fred shredded down to size

The removal of Fred Goodwin’s knighthood serves the coalition’s political purposes. It shows them being tough on a bad banker and reminds everyone that these problems happened on the last government’s watch and that Alex Salmond was cheering on RBS’s bid for ABN Amro. There are even some in government who are up for a fight over clawing back part of his pension or past bonuses believing it would put both Goodwin and the human rights act in the dock. This is not to say that the removal of his knighthood was not merited. Goodwin didn’t do much of a service to banking, after all. There’s another lesson in this:

Alex Massie Alex Massie

Sir Fred Should Have Kept His Knighthood

So poor old Fred Goodwin has been stripped of his knighthood. Apparently, betting big on a Dutch bank and getting it catastrophically wrong means you end up bringing the honours system into some kind of disrepute. At this point let me remind you that Alan Sugar has a peerage. As with the question of bonuses at RBS (which, if memory serves turned a £2bn profit last year), so the outrage and ordure chucked at Sir Fred was enough to make one feel slightly sorry for him. Not, of course, that he needs much sympathy but there’s something unedifying about seeing even rich men and bankers throw to the Daily Mail

Peter Hoskin

<del>Sir</del> Fred Goodwin

And so Fred Goodwin has lost his knighthood. Here’s the Cabinet Office statement (and some of my previous thoughts here): ‘It will soon be announced in the London Gazette that the Knighthood conferred upon Fred Goodwin as a Knight Bachelor has been cancelled and annulled. This decision, not normally publicised in advance, was taken on the advice of the Forfeiture Committee, which advised that Fred Goodwin had brought the honours system in to disrepute. The scale and severity of the impact of his actions as CEO of RBS made this an exceptional case. In 2008 the Government had to provide £20bn of new equity to recapitalise RBS and ensure its

Sunday

James Forsyth

Peston: Hester will not take bonus

Stephen Hester’s decision to waive his bonus, revealed by Robert Peston just after 10 o’clock, will be a source of great relief to David Cameron and George Osborne. A story that could have dragged on for weeks, undermining their argument about fairness has just lost most of its potency. Ed Miliband, though, will be able to claim — with some justification — that it was the threat of a Commons vote on the matter that led to Hester renouncing his bonus. But this isn’t quite the end of this business. There’s now the question of what happens to the bonuses for other members of staff at RBS and then there

James Forsyth James Forsyth

Labour seizes on Hester’s bonus

The issue of Stephen Hester’s bonus is going to carry on hurting the government. Labour has now announced that it will use an opposition day debate on 7 February to hold a parliamentary vote on the issue. The coalition will either have to lose, an admittedly non-binding vote, or whip its MPs to go through the lobbies in defence of Hester’s bonus. As Labour showed when it used the threat of a Commons vote to push Rupert Murdoch’s News Corp to abandon its bid for full control of BSkyB, the bully pulpit of Parliament can be extremely effective. These votes also bring out tensions within the two coalition parties. I

Peter Hoskin

The government’s Hester problem intensifies

First there was Fred Goodwin, now there’s Stephen Hester. The chief executive of RBS is fast becoming the bête noire of the British banking system, thanks to his roughly £1 million share bonus which, we learn in the Sunday Times (£) this morning, may be topped up with an extra £8 million over the next few years. Little wonder that Iain Duncan Smith admitted on the Marr show earlier that there may be a severe public backlash, and that the government could suffer from it. He suggested that it would be better, for all concerned, were Hester just to forego the million. It’s one of those debates where it’s easy

Friday

Jonathan Jones

A matter of honour

Condemnation’s coming from all sides for the £963,000 bonus awarded to RBS’s Stephen Hester, on top of his £1.2 million salary. The most prominent denunciation came from Lib Dem Foreign Office minister Jeremy Browne on last night’s Question Time: ‘I think there’s a sort of question of honour. Even if there is a contractual opportunity for him to have a bonus, it doesn’t mean he has to accept it. He’s already being paid more than £1 million a year. His total package now, means he gets paid in about three days what a soldier risking his life in Afghanistan gets paid in a whole year. And I think he should

Wednesday

Fraser Nelson

Salmond’s dangerous corporatism exposed

How would an independent Scotland have fared during the crash? Given that the liabilities for RBS alone represent 2,500 per cent of Scotland’s economic output, it’s a difficult question for Alex Salmond. He replies that the banks in Scotland would have been better-regulated by wise, old him, so the problems would not have arisen. But Faisal Islam at Channel Four has unearthed a letter that rather explodes this theory, written from the First Minister to Fred the Shred egging him on with the calamitous acquisition of ABN Amro. This, as CoffeeHousers will know, is the acquisition which was so hubristic that it went on to sink the whole banking group.

Monday

Peter Hoskin

Your three-point guide to today’s RBS report

After months of delay, and much hounding by The Spectator’s Select Committee Chairman of the Year, Andrew Tyrie, the Financial Services Authority has finally released its report into the wheezing collapse of RBS in 2008. At 452 pages it is a behemoth of a document, and too much for me to have fully digested yet. But a few points stand out at first glance: 1) Don’t blame us, blame Gordon. The Tories are making much of the fact that only three politicians are mentioned in the report: Tony Blair, Gordon Brown and, most relevantly, Ed Balls. And they’re not mentioned in a particularly flattering context, either. All three are quoted

Tuesday

Alex Massie

The Size of Things to Come & Unionism Needs a New Story

Recalling the collapse of RBS, Tyler Cowen suggests that Scottish independence might not be such a nifty notion: The conceptual point is simple.  If you think that the world is now more prone to financial crises (and I do), the optimal size for a nation-state has gone up.  Risk-sharing really matters. That’s a pretty widely-held view and it is not, I think, wholly coincidental that Alex Salmond discovered* the apparently unlimited potential of renewable energy at roughly the same time banking began to seem a less useful foundation for future prosperity.   Risk-sharing**, however, is at the heart of it. It was the main reason why the SNP became a

Tuesday

Alex Massie

Sir Fred Goodwin’s Penance

If we were not permitted to report parliamentary proceedings we would not be able to observe that, protected by parliamentary privilege, the Liberal Democrat MP John Hemming revealed the existence of a superinjunction taken out by Goodwin to prevent reporting on, well, who knows what? But for Mr Hemming’s actions, revealling the existence of this superinjunction would risk being held in contempt of court. Two things arise from this: what kind of judge thinks it appropriate to grant the kind of injunction that includes an injunction on revealing its existence? Is the judiciary not troubled by the apparent ease with which rich public figures can purchase protection from being inconvenienced