Fates and Futility

Democratic US senator and noted civil rights activist Robert F. Kennedy once said, “ First is the danger of futility: the belief there is nothing one man or one woman can do against the enormous array of the world’s ills-against misery, against ignorance, or injustice and violence. Yet many of the world’s great movements... have flowed from the work of a single man. A young monk began the Protest Reformation, a young general extended an empire from Macedonia to the borders of the earth, and a young woman reclaimed the territory of France. It was a young Italian explorer who discovered the New World and a 32 year old Thomas Jefferson who proclaimed that all men are created equal so, with these commendable achievements already in the bag, how hard can it be to bring a few bankers to task?

Deemed “woefully unsound” by MP Andrew Tyrie and the parliamentary commission on banking standards, one might easily assume shirking ones fiduciary duty, turning a blind eye to money laundering, manipulating Libor rates, hard selling inappropriate toxic products and cooking the books to maximise their remunerations  might prove sufficient to bring about the sternest of criminal charges. However, for a gang of HBOS untouchables, the consequence of wreaking havoc with the UK economy and leaving widespread hardship in their wake have been nothing if not “alternative” in their nature.

Indentified by the FSA as far back as 2003 as an“accident waiting to happen” and led by just a few high ranking individuals who chose to use ineffectual financial regulation, a gullible government and the most malleable of auditors to promote “growth at any price", the HBOS three road rough shod over all who stood in their way for many a year. Blinded by greed and self importance they chose to ignore reports of fraud and warnings of dangerously high levels of risk and instead bullied, threatened and dismissed those who spoke out. As a result their “colossal failures” have cost 921 million in fallen share values, 20 billion in tax payer bailouts, 35,000 in in-house job losses and the repossession of countless homes and small businesses.

To date the personal cost to those responsible has been nothing more than a smattering of token fines, some nominal sessions of naming and shaming and a sprinkling of bad press.

HBOS chairman Lord Dennis “cuckoo land” Stevenson, who enjoyed more than £815,000 per anum for a role he viewed as part time, was indignant he should be required to step down from his chairmanly duties despite being found to be either “deluded or dishonest” for the part he played in concealing HBOS’s imminent collapse. However, he has continued to enjoy a variety of roles in well remunerated employment within the financial services industry by miraculously side stepping a ban from holding a directorship or working in the city and does not currently face any criminal proceedings.

Former HBOS chief executive James Crosby (2004-2006), who infamously bred a culture of dismissal for those who opposed his risk management views, chose to return his knighthood for services to banking and, after much pressure, volunteered a reduction of 30% to his £572,000 indexed annual pension. However, the millions he reaped in HBOS share options (two thirds of which he sold just before the bank’s collapse) along with his equally sizable bonuses have remain unencumbered. After his HBOS departure, he was not only offered, and accepted, the deputy chairmanship of the FSA but took up a number of lucrative positions on various boards because, despite widespread public outrage, he too faced no ban or criminal charges.

Boardroom brawling HBOS Chief executive Andy Hornby (2006-2009), who may well have found “the die was cast and it was too late for him to make any significant change" to avoid disaster, not only managed to avoid financial forfeiture for concealing (with the help of his KPMG auditors) 47 billion in HBOS losses before their LLoyds takeover but also managed to benefit from a “change of control payment” on his departure. Paid for by the tax payers bailout, he took £251,000 in cash and 2051 shares on top of his salary, his pension contributions, his awards in lieu of pension and his redundancy payments. Since then he has enjoyed the most senior of roles with both Boots and Coral, without a whisper of prosecution over his HBOS conduct.

Gordon Brown confessed, "I should have done more to prevent the banking crisis," and David Cameron assures us he "will make sure the banking crisis will not happen again”. However, while Downing Street continues to allow the bankster conscience to dictate their fates rather than their crimes, it is little wonder I who have battled with the untouchable Halifax Bank of Scotland for almost five years, have been unable to acquire an un-redacted version of each and every piece of information held on my HBOS file in order to progress my Financial Ombudsman Service case of complaint.

  

US novelist and former financial trader, Philipp Meyer once said, “"Give a small number of people the power to enrich themselves beyond everyone's wildest dreams, a philosophical rationale to explain all the damage they're causing, and they will not stop until they've run the world economy off a cliff" and while our government and their regulators prefer to endorse the calculation of capital as a solution to the banking crisis instead of prosecuting the banksters grossly inappropriate corporate conduct, all we can expect globally, nationally and individually is...

A whole lot more of the same. 

Delusions and Grandeur

Fifth century teacher, Buddhist monk and patriarch Bodhidharma once said, “The ignorant mind with its infinite afflictions, passions and evils is rooted in three poisons; greed, anger and delusion. Yet despite sixteen centuries of “progress” it is evident from the Parliamentary Banking Commission’s recent and lengthy interrogations these attributes have played a pivotal role in the birth of a UK banking crisis from which the Halifax Bank of Scotland has emerged as one of its most disreputable players.

Teetering on the brink of collapse in 2008, this once well thought of three hundred year old bank’s undisclosed toxic loan book was not only threatening its own survival but, after its Lloyds Banking Group takeover in January 2009, was the reason the tax payer was required to fund a twenty billion pound bailout and shareholders lost forty million pounds in share values. Formerly Britain safest bank, Lloyds is now 41% taxpayer owned while the overall financial impact of the banking crisis has been likened to that of the Second World War and is likely to cost the taxpayer in excess of sixty billion. Some say it will take as much as thirty eight years for the UK to fully recover.

However, despite these catastrophic events, the key HBOS’s players in this economic nightmare remain determined not to shoulder their responsibilities and, aside from some long overdue valueless apologies, remain unprepared to admit a reign of unprecedented greed peppered with unadulterated delusions of grandeur have cost hundreds of thousands of people their homes, their livelihoods and their financial futures. Instead of offerings of truth and transparency the Parliamentary Banking Commission has been subject to a plethora of repetitive and evasive attempts to explain why, despite previously justifying their obscene levels of remuneration on the grounds of their huge burden of responsibility, the blame for HBOS’s failure and the subsequent losses suffered by their shareholders, their customers and the taxpayer, should not rest with them.

Washing his hands of any knowledge of the “innovative” lending products and high risk strategies which brought Halifax Bank of Scotland to its knees, former 2001-2008 Chairman Lord Stevenson told MP’s his £815,000 part time role at HBOS along with his limited knowledge of banking left him ignorant of the “errors” which led to HBOS’s collapse. Conveniently forgetting he had once bragged to the FSA, in writing, that he “regards himself as a knowledgeable and well briefed” chairman who had confidence in HBOS’s “safe” position a matter of months before its near demise, did nothing to encourage this life peer who once said he would be cross if he was ever thought “dim”, to admit his culpability. 

Equally immersed in his own spin, HBOS deputy chairman (2001- 2009) Sir Ron Garrick, who, in exchange for three ten hour meetings annually over nine years, enjoyed fees totaling 1.322 million pounds, told MP's it was "by far and away the best board he had ever sat on". Convinced of both its transparency and integrity he chose to turn either a blind or ignorant eye to the fact that during his chairmanship 69% of the banks corporate loan book should never have been lent.

Repeatedly denying all knowledge of the FSA’s concerns over HBOS’s residential lending while endorsing the ridicule of those trying to abide by regulatory rules and infamously dismissing HBOS whistle blower Paul Moore in 2004, the former HBOS Chief Executive from 1999-2006 Sir James Crosby described the off loading of two thirds of his HBOS shares on his departure from the helm of his toxic sinking ship as simply balancing his portfolio. On top of the profits from this timely manoeuvre Crosby further profited from his failures with eight million pounds in bonuses and a£572,000 a year in pension.

With a general lack of banking experience as his excuse, Andy Hornby, (HBOS’s Chief Executive from 2006-2009) said,“ I bitterly regret that we did not foresee the possibility of wholesale markets closing for one whole year” and offered “his heartfelt apologies for what happen to HBOS”. However, even without the benefit of banking expertise, it is easy to see how empty these apologies are in the light of Paul Moore's warning to Hornby's predecessor James Crosby in 2004, that lending “money to people who have no jobs, no provable income and no assets” and then force feeding them products they don’t need inevitably impacts on the confidence of financial markets. Surely common sense dictated that sanctioning the launch of a another toxic product in the form of a residential mortgage product offering customers a 125% loan to value in November 2006 would be unlikely to aid market confidence or limit exposure to risk.

World renowned chess player, historian and author Henry Thomas Buckle once said, “Society prepares the crime, the criminal commits it. It is no surprised to learn those at HBOS’s helm when it neared collapse are still operating in “cloud cuckoo land”. Their denials only serve to highlight the unanswerable detachment they still enjoy from the billions in losses they socialized, the obscene rewards they were paid for failure and the consequences their delusions and greed have had on their victims. Speaking as one of the many whom HBOS chose to treat as cannon fodder, I can only wholeheartedly hope, one day very soon, the regulatory society which prepared these crimes will finally acquire the courage to regard those who commit them as criminals.

Priceless Principals

Fifteenth century Parisian nobleman and moralist author Francois de la Rochefoucauld, once said, “The glory of great men should always be measured by the means they have used to acquire it” and while the parliamentary commission on banking standards continue to haul HBOS’s infamous Lord Stevenson, Sir James Crosby and Andy Hornby over luke warm coals my own attentions have once again turned  to the lengthy process of compiling my overvaluation case against the Bank of Scotland.

Now in receipt of both the Financial Ombudsman Service's award of compensation for their mishandling of my case and their written assurances that my Bank of Scotland complaint will be, from now on, closely monitored throughout its journey towards a swift and fair conclusion,  I wrongly assumed it would be the Bank of Scotland themselves who would initially respond to my accusations of mis-selling. However, according to their most recent piece of correspondence it is to be Birmingham Midshires who are under instruction to take up the reins of my complaint and it is they who now wish me to outline my concerns and indicate to them what I would consider to be a favorable outcome.

A little shocked to find I am addressing yet another group of individuals in my quest for justice, I am even more surprised to discover that twenty one months after I first appealed to the FOS to investigate my complaint, and almost four years since I  originally complained to HBOS, it is not only my adversaries who have undergone a transformation but my own approach to our circumstances has altered too. Whereas once I would have been elated to receive a mere whisper of compassion and eternally grateful at the suggestion of a stay of execution, after four excruciating years in HBOS induced financial purgatory my broadening education of all things bankster leaves me with no plans to plead for debt forgiveness on compassionate grounds.  Instead I recently wrote the following in reply to Birmingham Midshires' request.

“You have asked me to give you an understanding of what a satisfactory outcome would be for me.  I have lost my home, my livelihood, my financial future and my health and because of HBOS’s actions I have been persecuted by debt collectors for four years.  This has resulted in PSTS for both my husband and I together with long standing depression, threats of suicide on my husband’s part and in my case the complete loss of every hair on my body.  My five children have had no alternative but to stand by and watch my husband and I crumble while HBOS have, for four very long years, showed no empathy, no understanding and would not even allow us to cover our mortgage payments with rental income to preserve our home for the future.  As you will now no doubt understand from what I have said, our losses are huge and have extended far beyond mere financial redress.

Given the above, what would you consider a ‘suitable outcome’?”

                           
Francoise de la Rochefoucauld also said, “The principal point of cleverness is to know how to value things just as they deserve” and with this new found perspective firmly in mind I now await, with interest, Birmingham Midshires’ reply.