Socially Useless Banking Regulation

Ardent socialist, co-founder of the London School of economics, novelist and playwright George Bernard Shaw once said, “Until the men of action clear out the talkers, we who have social consciences are at the mercy of those who have none” and true to form, the talkers would have us believe austerity measures along with the reform of banking regulation have put both the heartache and the economic implications of the banking scandal firmly behind us.

Keen to keep us all abreast of the good news we are told;

•       “Britain is holding its nerve...the British economy is on the mend...[and]... we are going to make sure that everyone benefits from this recovery.” Chancellor George Osborne
•          “People need clarity over interest rates... to remove any uncertainty and to allow them to make economic decisions.” Governor of the Bank of England, Mark Carney
•        “Britain is seeing the green shoots of recovery...it is healing...and it is out of intensive care,"David Cameron’s spokesman to Reuters (on a daily basis) 
•      "Investors from around the world [are] investing in a British bank [and it] is a sign the British economy is turning a corner", George Osbourne after the sale of 6% of Lloyds bank to overseas investors.

However, for the  99% of us who occupy the real world, the picture remains significantly less rosy;

• The long overdue FSA/FCA investigative report into the collapse of HBOS is to be delayed until next year.
• “Economic recovery has been restricted to those at the top...it is not recovery for most people” Labour spokesman to Reuters 
• “A significant cohort of UK borrowers could experience financial difficulties if interest rates were to rise during a period of subdued income growth,” Financial Stability Report
•  Living standards in the UK are lower than they have been for a decade because inflation is still outstripping wage increases Reuters
•  Barclays and Lloyds have set aside a further 450 million to compensate people they have defrauded and Lloyds have used delaying tactics to encourage complainants to give up on their claims. 

In addition to these far from comforting social truths,  

• The recently published bi-annual Financial Stability Report states, the banks Financial Policy Committee relaxed the regulations for the UK’s big four lenders to allow them to "reduce their capital requirements by 20%"  and in so doing has provided them with a further 70 billion of cunningly disguised bailout.

Meanwhile, trapped between the legacy of widespread and hitherto unpunished banking avarice and the greed of my landlord, my family and I wait, without patience, for;

• HBOS to supply me with information I require to progress my case of complaint to the FOS
• The FOS to respond to my 1 August request that they ask HBOS to supply me with the information I have been awaiting for eight long months
• My landlord's builders to finish their noisy decimation of the Grade 2 listed property I have called home for the past five years

 And,

•  A letter from my landlord’s solicitor to advise me he wishes to increase my rent by a staggering 50% as a result of the installation of an extremely expensive, entirely unsolicited, sustainably fuelled heating system.

In October 2012, Any Haldene, Executive Director of Financial Stability and member of the Financial Policy Committee, made a speech to Occupy Economics to advocate socially useful banking. He said “concrete, practical proposals for change” would be delivered by way of banking reforms which addressed the five “c’s” (culture, capital, compensation, credit and competition) and further stated, “We know too that the costs of crises are felt disproportionately by the worst-off in society whose living standards tend to fall not just relatively but absolutely”. Yet, five arduous years on since my family and I lost our home, our livelihood and our financial futures, the talk continues while, for the 99%, the painful consequences of the crisis remain unchanged.

Stoic philosopher, inspirational master of equanimity and the last of the five good emperors of Rome, Marcus Aurelius, once said, “The guest at the lower end of the middle couch...who is digging in his big mouth with a toothpick is a fraud. He has no teeth” and while I wait, without mercy for the toothless Financial Ombudsman Service, to progress my miss selling complaint against HBOS, I can only conclude both the talkers, the bankers and the regulators are precisely the same.

Duty of Care

US business school graduate, National Security Agency potential recruit, governmental consultant and author of The Economic Hitman, John Perkins, once said, “This Empire, unlike any other in the history of the world, has been built primarily through economic manipulation, through cheating, though fraud...” and although he was speaking of the way in which the US miss sold debt to under developed countries to acquire political leverage and economic gain, endless investigations into the banking crisis would suggest the US  was not the only Empire to profit from economic manipulation, cheating and fraud.

However, despite revelations that widespread manipulation, cheating and fraud has been at home within the UK’s banking culture for many a year, not one high ranking executive or board member has faced criminal charges. Like the Economic Hit Men in Perkins book, highly-paid professionals have cheated the nation out of trillions while the Parliamentary Banking Commission’s outrage has endorsed the public face of our government. However, behind closed doors, evidence suggests the leverage of the all powerful banskters has neutralized political and regulatory muscle and in so doing created an untouchable elite who still enjoy the benefits of the obscene and exceptionally lucrative carrot without fear for the consequence of the stick.

 As a result of this unspoken rule of thumb it is clear a miss selling complaint such as mine represents little more than a minor irritant to the minions of the corporate con-men who remain practiced in the art of denial.

It has been,

• Five years since I first learned my mortgage was in arrears,
• Five months since I received HBOS' response to my claim that our mortgage was miss sold,
• Five weeks since I first asked for, and listed in detail, the information I require from HBOS to progress my complaint and
• Five days since I received what they tell me is their best attempt at providing me with all I have asked for.

After hours of wading through reams of screen prints and under writing notes, I have now learned (according to HBOS),

• My husband is a professional sportsman
• We are owner/occupiers of a large house without a mortgage

And,

• Neither HBOS or their surveyors owe a Duty of Care to customers with remortgages.

Knowing full well my husband has never been a sportsman (professional or otherwise) and the place I call home has not only been owned by our landlords family for decades but been rented to us for the past four and a half years, I was suspicious HBOS’s claims regarding their obligations to provide Duty of Care might prove equally fictitious.

Further investigations have revealed,

• My conveyance was carried out by HBOS’ in house solicitor as was my survey and this situtaion may well constitute a conflict of interest in both cases
•  A surveyor cannot produce a valuation inspection report without liability, as their code of conduct indemnity insurance does not permit an opinion to be given without responsibility.

And

• A fee free remortgage submitted by a broker does not permit a lender to abdicate from their responsibilities to provide a Duty of Care.

In 2011 Lloyds Banking Group “set out a new vision and strategy to be the best bank for customers...[and promised to be] a more transparent organisation that delivers”. However, if my own case is anything to go by, HBOS, who now reside under the umbrella of Lloyds, have demonstated no plans to deliver anything but hogwash to me and the only strategy they seem to have embraced has been to send me a constant stream of inaccuracies and denials for the past five years.

In the words of American foundling father, principal author of the Declaration of Independence and third President of the United States, Thomas Jefferson, “The eyes of our citizens are not sufficiently open to the true cause of our distress. They ascribe them to everything but their true cause, the banking system” and while this may well have been true of my perceptions before our financial demise, this particular citizen has certainly had her eyes opened to the unscrupulous and negligent business practices of HBOS now.

Here's hoping documenting my battle with HBOS and posting it via my blog on the internet helps open the eyes of a fair few more!

Truth and Punishment

Mahatma Gandhi, preeminent leader of Indian nationalism in British-ruled India once said, "Many people, especially ignorant people, punish you for speaking the truth, for being correct, for being you. Never apologize for being correct, or for being years ahead of your time. If you are right and you know it, speak your mind. Even if you are a minority of one, the truth is still the truth" and after receiving not one, but two heartless letters of HBOS hogwash this week it is clear that ignorance and a complete disregard for the truth is not just the prerogative of Gandhi’s British-ruled India.

It is now four and a half years since the sale fell though on our home and I was prompted to discuss with Halifax Bank of Scotland how best to avoid repossession. Deaf to my proposals to create a tenancy to cover mortgage payments, I embarked upon another fruitless year of communication with HBOS after they forced its sale. During this highly stressful period I enlisted the help of the Citizen’s Advice Bureau’s but, despite their best efforts, no amount of explanation could satisfy this infamous bank that we were in extreme financial difficulties or persuade them to arrest their pursuit of us. It is was only after I consulted a government funded debt management organisation in desperation that I discovered the mortgage on my home may well have been miss sold in the first place.

It has taken me a further three years, via the Financial Ombudsman Service, to persuade HBOS to investigate my complaint only to find their original offer of mortgage was based on both a fictitious purchase price and a fictitious date of purchase at the application stage. I was sure making HBOS aware of this discovery would illustrate, without question, that not only did my compliant have substance but both HBOS’s surveyor and the broker to whom they paid more than £4,000 for placing the mortgage with them, had over-valued my home at outset. Convinced I had finally secured HBOS’s attention, I was relieved to have taken my first, albeit small, step forward after so many unsuccessful years of trying to communicate. Here follows their reply and sadly nothing could have been further from the truth.

In HBOS’s first letter they state,

“The information that was provided in this [mortgage application form] was what was entered into our systems. We took this as being accurate in good faith, and based upon the valuation that took place during the application process, there was never any reason to think this was wrong...Having viewed your comments and our response, my previous letter...has provided you with our final conclusions...As you have reached the end of our internal complaints procedure, any further correspondence received will be placed on file as we do not feel that further communication with you will help resolve your complaint.”

In HBOS’s second letter (which arrived by the very same post) I am told “this matter” has now been put in the hands of their debt collectors.

Because of the scandalous actions of banks such as HBOS, the taxpayer has been saddled with,

•         An £850 billion bill to bail them out,
•     £1.1 trillion of potential liabilities
•     £560 billion of quantitative easing to rebuild balance sheets

Yet I who have lost my home, my livelihood and my financial future at their hands can not only expect to be pursued by them for a £217,000 shortfall for the foreseeable future, while they, in the face of evidence which clearly illustrates there has been serious wrong doing, choose to remain ignorant of the truth and punish me for having the audacity to speak out.

Harvey Fierstein, American actor, playwright, author and champion for gay civil rights once said, “Never be bullied into silence. Never allow yourself to be made a victim and accept no one’s definition of your life,” and because of the way in which HBOS have continued to treat me, it is my plan to turn this day along with each and every other one into an opportunity to follow, without deviation, every single word of Mr Fierstein’s advice.

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.