If it’s possible to make money out of gullible or unsuspecting customers, that’s perfectly acceptable. The Banks pay huge bonuses because they know they can get away with being bailed out to the downside by the Government and taxpayer. They are not ‘too big to fail’ but think they are ‘too important to fail’ – where in reality, with the billion pound bail-outs we’re about to find out that they will ultimately be ‘too big to save’.
Of course Banks put profits before customers, how else does a business make decisions, especially when you are part-nationalised and insured against any risks?
The delusional Chief executive of the British Bankers’ Association Angela Knight says “the industry had reformed radically” – which bank is she talking about in particular that would lead her to think this was true? The Banks believe they can fall back on the taxpayer because it has been proven to be so.
Nick Clegg says he’s angry about the Banking industry and it’s actions – well do something about it then!!! Otherwise scenes like those seen in London a week ago are likely to repeat themselves again and again…
“Just weeks after Chancellor George Osborne signed Project Merlin the Bank of England governor Mervyn King has questioned why banks are trying to maximise short-term profit at the expense of customers.
In a Daily Telegraph interview Mr King attacked the banking bonus system warning that failure to reform the sector could result in another financial crisis.
Mr King said that, over the past two decades, too many people in financial services had thought “if it’s possible to make money out of gullible or unsuspecting customers, that’s perfectly acceptable”.
He said: “Why do banks in general want to pay bonuses? It’s because they live in a ‘too big to fail’ world in which the state will bail them out on the downside.”
The Project Merlin deal previously struck with the banks agreed that in return for the bank’s lending more money and showing restraint on bonuses, the UK Government would not take any further action on pay and profits.
“We’ve not yet solved the ‘too big to fail’ or, as I prefer to call it, the ‘too important to fail’ problem. The concept of being too important to fail should have no place in a market economy. There is too much weight put on the importance and value of takeovers and it doesn’t make sense to destroy a company with a sound reputation in the hunt for short-term profits.”
Mr King also drew a contrast between manufacturing companies, who largely care about their workforces, customers and products, and the banks. “There’s a different attitude towards customers. Small and medium firms really notice this: they miss the people they know.”
Chief executive of the British Bankers’ Association Angela Knight said “Some in the industry had got it badly wrong during the financial crisis but since then the industry had reformed radically. We entirely agree that no bank should believe it can fall back on the taxpayer. I sincerely hope Mr King is as committed as we are to forming a good relationship when the Bank of England takes over regulation”.
Banking chiefs said they “respected” Mr King but disagreed with his comments..
The Con-Dem Deputy Prime Minister Nick Clegg told delegates at the Scottish Liberal Democrat spring conference in Perth:”I agree with Mervyn King, the job of making our banks safe and responsible is not yet complete, I understand why people are angry when they hear about the super-sized salaries and bumper bonuses awarded to top bankers. I am too”.
Read the full article by Mike Clarke at: www.mypropertypowerteam.co.uk