Whitewash and Christmas

Former United States Presidential Candidate, three times governor of Colorado and lawyer, Richard Lamm, once said, “Christmas is a time when kids tell adults what they want and adults pay for it. Deficits are when adults tell the government what they want and their kids pay for it” yet despite four long years in the grips of a global financial crisis it remains an unwelcome fact that both adults and kids are still paying the price of a banking crisis deficit which lined our banksters pockets with millions while their regulators condoned and excuse them.

During the past year we have been encouraged to believe 2012 was to be the year in which regulation and banking reform would finally make a difference.

•    Martin Wheatley, managing director of the FSA said,

“CEO’s are ultimately accountable for the way their staff are incentivised, so we expect them to take a real interest in fixing this [and] we have made sure the firms where we found failings are fixing their incentive schemes, improving governance and controls and, in the worst cases, checking past sales to identify if mis-selling has occurred.”

•     Andy Haldane, executive director of financial stability at the Bank of England said,

“The occupy movement has been successful in its efforts to popularise the problems of the global financial system for one simple reason : they are right” and “policy makers like me will need [their] support in delivering radical change” while this “quiet but unmistakable leaf is being turned” by our bankers.

•     Danny Alexander, UK Treasury chief secretary said,   

     What I want to see is [banking reform] recommendations made quickly so that we can get on and implement them, which is, I think what the people of this country want to see".

    

    However, despite encouraging words, the talk of 2012  proved cheap and instead of our banking fraternity calculating the prospects of repaying their ill gotten gains, it is only EU threats to cap their remunerations to a modest couple of million which have captured their undivided attention while, in complete contrast to the lifestyle afforded the favored few who waged economic war on the masses, the victims of their banking crimes continue to endure,

• Widespread and economically damaging unemployment  
• Austerity measures which have cost the average family more than twenty pounds a week
• Possession order applications against UK homes filed, on average, every two and half minutes

Insisting “we are all in this together” Prime Minister David Cameron said, 

“ It takes time to recover and we've got to do more. We’re going to do more. We’re going to roll up our sleeves and do everything possible to get business going in Britain, to get housing going, to get jobs going.”

However, if Andrew Bailey, chief executive designate of the Prudential Regulatory Authority’s words are to be believed, nothing could be further from the truth. Without a shadow of a doubt it appears,

•    Some banks are just too big to fail
•    Some banks are just too big to jail

And unlike the rest of society,

•    Some bankers enjoy carte blanche to operate outside the law 

Benjamin Franklin once said, “A good conscience is a continual Christmas” and while I cannot pretend my four years of fighting and two years of complaining to the FOS about HBOS  is in any way reminiscent of an eternal Christmas, I cannot help but wonder how those responsible for the avarice and arrogance which brought about levels of widespread hardship likened only to that of a world war have, despite all corporate, governmental and regulatory attempts to whitewash their crimes, enjoyed the festive traditions of proffering goodwill to all men or the peace of a good conscience during the fourth Christmas of this ongoing economic crisis.

Talk and Tokenism

Winston Churchill once said, “However beautiful the strategy, you should occasionally look at the results” and as a long suffering victim of the ongoing banking crisis I wish those who chose to initiate the “pile it high” culture at the expense of the individual had seen fit to resist the opportunity to amass obscene personal wealth without moral regard, for fear of the wider economic consequences. 

Martin Wheatley would like us to believe flawed management run business models, policed by employees with a conflict of interest have been the major culprit when it comes to dangerously incentivised, inadequately trained banking staff miss-selling and miss-guiding financial customers. However, I struggle to comprehend how a culture favoring lucrative bonus structures for all those involved could be effectively implemented from anywhere but the very top. I suspect instead, it is at the giddiest of corporate heights, where the promise of multi million pound, profit linked remunerations which amount to hundreds of times the average salary that the greatest conflict to customer interest actually resides. As indicated by former HBOS director Peter Cummings, who now faces fines of £500,000 and a life time ban from the financial services industry for his part in the demise of HBOS, it is far more plausible that the decision to turn a blind eye to high risk strategies, product miss-selling and neglectful duty of care to clientele is made in the board room in front of sleepy regulators instead of residing in the domain of misguided sales staff or any single executive.

Following the FSA’s survey of twenty two financial institutions we are now assured the banks and their CEO’s are more than ready to embrace recommendations for an all encompassing change in operational culture. During the coming twelve months the new Financial Conduct Authority are entrusted to enforce and monitor these changes and Martin Wheatley insists this will mean banks will no longer be permitted to,

•         Sell unsuitable products to people, especially the vulnerable
•         Arrange the wrong mortgages because it costs people their homes
•         Put their own interests and incentives ahead of their customers
•        Employ business practices which are without integrity or unfair to customers

While I firmly believe Lloyds Banking Group (under whose skirts HBOS have hidden since 2008) will have an inordinate task ahead if Mr Wheatley’s guidelines are to be adhered to, if past performance remains a reasonable indicator of what to expect in the future, HBOS will find it nothing short of impossible because, over the last six years I know from personal experience they have,

•  Paid out almost £4,000 in introducer fees my own mortgage despite there being no financial evidence to support the repayments    
•  Overvalued our home to create the necessary headroom to facilitate the sale of their mortgage product
• Refused to re-negotiate our mortgage terms or show any of the government promised forbearance when we got into trouble, despite my husband’s health problems 
•  Omitted me from all discussions with regard to our mortgage, from outset, on the grounds it was my husband’s duty to keep me informed and not theirs
•  Created a massive mortgage shortfall by unnecessarily forcing a sale when I had secured a method of servicing the loan via rental income

And,

• Reputedly covered their own losses by placing “bets” against the property market in the knowledge their severely flawed lending portfolio was about to produce a massive downturn in property values.

 Aided and abetted by an all but a hands off attitude from both the regulators and the Financial Ombudsman Service, I am repeatedly advised that without proof of "intent", I will remain unable to recover losses caused by HBOS through legal channels as my damages are too remote. Nevertheless, it is my view the FSA’s findings that miss-sales were fueled by a strategy which employed irresponsible sales incentives is merely another example of cold blooded intent at the highest level.  HBOS profits were secured via the manipulation “with intent” of banking staff, manipulation “with intent” of the LIBOR rates and manipulation “with intent” of anything else which would provide a handsome return, regardless of the price paid by the individual and the global economy.

American president Franklin D Roosevelt once said, “In our personal ambitions we are individualists. But in our seeking for economic and political progress as a nation, we all go up or else all go down as one people” and in view of this, I can only hope Martin Wheatley successfully delivers his plan to address the “knock on effects to customers” of banking malpractice because some of us, as a direct result of our banks actions, are already at down at rock bottom.

And for us, there is nowhere else to go.