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.

Debt Sentences

If Albert Einstein once thought our technology exceeded our humanity, I can only imagine what he would say of our banking culture today.  This week alone I have read an open letter of resignation from a Goldman Sachs executive director speaking of toxic investment practises along with an ex banker's declaration stating his “mildly revolting” earnings pale into insignificance when compared with the current “completely obscene” remunerations of his untalented former colleagues.  In these circumstancest is not difficult to conclude a bland, mediocre man at the helm of the FSA has been essential to ensure this unregulated reign of economic terror has continued for as long as it has.

On hearing these revelations from within the financial sector it has been no surprise to also hear the FSA’s lengthy and expensive investigation into the Bank of Scotland has finally confirmed precisely what so many of us already knew via a government commissioned report which exposes gross misconduct on the part of the Bank of Scotland’s board of directors. At long last the way has been paved for a much overdue wave of criminal prosecutions against the too big to fail perpitraitors of these economic crimes.

Yet, despite evidence of banking fraud finally reaching the public domain, I am still facing a fight to obtain a full Financial Ombudsman’s investigation in to my own case because this very same infamous banking giant has chosen to make use of an FSA jurisdiction clause to thwart further assessment of my complaint. This clause dictates an individual has only a six months to bring a case to the Financial Ombudsman’s Service while, in contrast, the Bank of Scotland have jurisdiction for twelve years to pursue me for a debt they have both created and, despite their denials, continued to correspond with me about for three years.

It has also come to light that if I sign to accept their jurasdiction arguement and agree to their “goodwill” offer to remove Merrels Ede solicitors from my case giving me eighteen months respite from their pursuit, I could well be acting to my detriment in more ways than one. Tempting though it is to obtain this guarantee from the Bank of Scotland, it is my belief signing an agreement of this nature will in itself be an admission of my responsibility for a debt I have always believed the Bank of Scotland created and not me. Furthermore, not only will my signature amount to an admission of this liability but it will also re-calibrate the twelve year clock from the day I put my mark on the Bank of Scotland's document and  in so doing extend their jurisdication for my pursuit by another three years. At present I stand three years into this debt sentence.

Equally infuriating is the fact that the Bank of Scotland are to not to receive so much as a slap on the wrist from the FOS for setting their brutish debt collectors  on me, because, in spite of being in receipt of more than twenty letters from myself and the CAB explaining, in detail, my reduced financial circumstances, the FOS are happy to believe the Bank of Scotland were not fully aware of my position. It is said banks who have been the subject of bailouts are continuing to prove the economic theory of moral hazard true in that those who go unpunished because of  government rescue packages continue to make the same mistakes. If my case is anything to go by, the Bank of Scotland are no exception to this rule and are now, more than ever, keen to lay the blame firmly at the door of the individual while using every rouse they can to wriggle out of their moral obligations to the victims of their greedy, self actuating behaviour.

So, as the school holidays approach and my case remains unresolved, I am forced once again, to negotiate with a very disgruntled Financial Ombudsman’s adjudicator who never fails to go to great lengths to be more than fair to my gigantic adversary. Explaining my desperate need for unencumbered child free time to give my case the attention it deserves, I have (thankfully) secured her reluctant consent for an extension to her deadline. This will give me a much needed opportunity to take advice and pursue some FSA technicalities of my own. However, I am told the price I have paid for this opportunity is I will never secure this kind of consideration from her again.

George Bernard Shaw once said, “The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man” and despite recommendations from many who know me, along with a fair few from those who don’t, it seems acting beyond the reason of others is the only way left for me to secure progress towards a debt free life for my family.

But,

Thanks to my FOS extension, I now have four debt fighting free weeks to spend with my children and in the words of the reggae band playing outside the Radio Four Workshop for script writers I went to this weekend, I say to all those who have expressed concern for me this week,

“Don’t worry, be happy, every little thing is going to be alright!”

...and I’m keeping my fingers crossed that Bob Marley is right.