Recent News

Out Of The Industry

RBS bankers joked about destroying the US housing market

Transcripts of pre-financial crisis conversations show senior bankers’ disregard for customers

RBS bankers joked about destroying the US housing market after making millions by trading loans that staff described as “total fucking garbage”, according to transcripts released as part of a $4.9bn (£3.8bn) settlement with US prosecutors.

Details of internal conversations at the bank emerged just weeks before the 10-year anniversary of the financial crisis, which saw RBS rescued with a £45bn bailout from the UK government.

Continue reading…
Source: The Guardian

Colonial First State admits​ super fees result in vastly different returns

Trail commissions are banned for new accounts, but Productivity Commission believes 636,000 super members are still subject to them

Colonial First State has admitted the entire reason some of its super funds generate vastly different returns for members has to do with the fees it charges.

The banking royal commission heard on Wednesday that executives from Colonial and Commonwealth Bank were “unhappy” earlier this year when the Australian published an article explaining why the returns of retail super funds linked to the big four banks were so low, compared to the returns of not-for-profit and union-linked industry funds.

Related: Colonial committed 15,000 offences by failing to move members to MySuper

Related: Underemployment is growing, and there is no easy policy fix | Greg Jericho

Continue reading…
Source: The Guardian

Lord Thomas of Macclesfield obituary

Chief executive of the Co-operative Bank who caught the mood of its ethically minded customers

Terry Thomas, Lord Thomas of Macclesfield, who has died aged 80, brought vision, change and empathy into the dry world of the British bank, proclaiming that banking was too important to be left to bankers.

He joined the Co-operative Bank in 1973 and became its managing director in 1988, at which point he seized the reins decisively. Terry caught the mood of the bank’s ethically minded and often well-heeled customers. He democratised the gold card – making it available to a far wider range of customers and guaranteeing that it would be free for life.

Continue reading…
Source: The Guardian

Former Co-op director says she was sacked after equal pay claim

Exclusive: Sam Walker tells tribunal she warned of possible company-wide salary gap

A former executive at the Co-operative Group has alleged that she was sacked after raising an equal pay claim and warning the company could be paying men and women differently for the same roles.

Sam Walker, who was in charge of HR, brought a claim of equal pay, discrimination and unfair dismissal against the Co-op, which will be heard over the next two weeks.

Continue reading…
Source: The Guardian

Crashed: How a Decade of Financial Crises Changed the World – review

Ten years after the 2008 financial crash comes a compelling analysis of what really happened. Both appalled and captivated, the former Greek finance minister and co-founder of political movement DiEM25 fears we have reached a 1930 moment…

Every so often, humanity manages genuinely to surprise itself. Events to which we had previously assigned zero probability push us into what the ancient Greeks referred to as aporia: intense bafflement urgently demanding a new model of the world we live in. The financial crash of 2008 was such a moment. Suddenly the world ceased to make sense in terms of what, a few weeks before, passed as conventional wisdom – even McDonald’s, for goodness sake, could not secure an overdraft from Bank of America!

Moments of aporia produce collective efforts to respond to our bewilderment. In the late 18th century, the pains of the Industrial Revolution begat free-market economics. The crisis of 1848 brought us the Marxist tradition. The great depression produced both Keynes’s General Theory and Friedman’s monetarism. Over the past decade, the 2008 crash has given rise to a cottage industry of books, articles, documentaries, even films but not, so far, an overarching theory. Now, a compelling new book has arrived which deserves to be at the top of the reading list of anyone interested in the events of 2008 and eager to make sense of the aftermath .

George Osborne’s austerity meant treating a large section of the population as cattle whose market value had tanked

Continue reading…
Source: The Guardian

Banking royal commission: the week the inquiry turned its sights on super

Australians hold $2.6 trillion in super but the industry has seen years of scandals and who should administer these funds is hotly contested

The banking royal commission turned its attention to the superannuation industry this week.

Why? Because the super industry has endured years of scandals, and who should administer the massive pool of retirement savings is hotly contested in Australian politics.

Related: NAB issues public apology after week of damning evidence at royal commission

Related: National Australia Bank charged fees to dead superannuation customers, inquiry told

Continue reading…
Source: The Guardian

Gambling in a theatre-casino won't help us understand the banking crisis

The Almeida’s show £¥€$ (Lies) is so taken by the shiny technicalities in the world of finance that it misses the fundamentally political nature of the crash

I’m sorry for what I’m about to say, I truly am. I can see the sweat that’s gone into the show £¥€$ (Lies). I appreciate the blood sacrifice, the potential lost thousands of pounds, of turning the 325-seat Almeida theatre into an immersive drama set for 60-odd people. And I applaud the aim of putting on a play notionally about the banking system that, according to the programme notes by the Belgian theatre company Ontroerend Goed’s artistic director, Alexander Devriendt, is “just one tiny step to hopefully, one day, make a revolution happen”. Because who doesn’t want one of those to sweep aside our rotten economic system?

But despite the rapturous applause from theatre critics, including m’learned colleague Mark Lawson, I can’t join in. I did try. Like the rest of the audience filing in, I oohed over how a theatre had been turned into a casino, and aahhed as we were arranged around a table and handed our chips by our croupier-cum-market maker.

Continue reading…
Source: The Guardian

Time running short for deal on financial contracts before Brexit

Financial markets will be left in the dark if the UK makes a cliff-edge exit from the EU

Currency markets are taking the possibility of a no-deal Brexit seriously. The pound, at $1.28 against the US dollar and €1.11 versus the euro, is at its lowest level for almost a year and we shouldn’t be surprised. Even Brexiters who imagine sunny uplands in the long term usually concede that a no-deal Brexit would mean a thump for the UK economy on the way out.

But there is a crucial short-term question about a “no deal” outcome. How literally should it be interpreted? If it were to mean nothing whatsoever being agreed about the continuity of financial contracts on day one of Brexit, that’s alarming. There would be a real risk of mayhem in the markets.

Continue reading…
Source: The Guardian

NAB issues public apology after week of damning evidence at royal commission

Bank tried to prevent publication of correspondence showing more than 100 potentially criminal licence breaches

National Australia Bank has issued a public apology after a horror week of evidence at the banking royal commission.

The NAB chief executive, Andrew Thorburn, posted a video apology on Twitter on Thursday afternoon saying he was committed to learning from the experience “so we can once again be a bank you respect and trust”.

Related: Greens want Australia’s banks broken up over ‘shocking degree of rot’

This week we’ve been confronted at the Royal Commission with examples of where we have failed to serve our customers with honour. I’m sorry. And my commitment is that we will learn and get better, so we can once again be a bank you respect and trust.

Related: Industry super funds are thrashing those run by banks – and business is crying foul | Greg Jericho

Continue reading…
Source: The Guardian

Low exposure risk seems way forward wise investor

Lord Rothschild sounds an almost alarmist note citing concern for the post-war economic order

Lord Rothschild’s remarks on markets are always worth reading. First, he knows how to make money. RIT Capital Partners, the £3.2bn investment trust he chairs, has returned an average of 12.6% a year since flotation in 1988, which is excellent going for a defensively managed fund. Second, a substantial chunk of his personal wealth is held in RIT. His 18% stake is worth a cool £575m. Third, he gets to the point.

Rothschild has sounded progressively bearish since late 2015 but he took caution to new extremes in Tuesday’s report to shareholders. “This is not an appropriate time to add to risk,” he wrote, citing high stock market valuations, the length of the bull run (10 years, a record), and the end of the era of quantitative easing.

Continue reading…
Source: The Guardian