Six years on and no end in sight

It is now six years since the start of the banking crisis.   This week RBS has announced that the bank’s pre-tax loss for 2013 was £8.2bn, compared with £5.2bn in 2012.   Chief Executive Ross McEwan tells us that it will take a further three to five years for the bank to recover.

This from a bank 81 percent owned by British taxpayers after its 46 billion pound government bailout in 2008.  And one that has set aside £576m for staff bonuses in 2013, a modest drop of 15% on 2012.  Of that sum, £237m went to investment bankers.

Had we been told back in 2008 this this would be the picture in 2014, what would have been public reaction?   As of now, there is a wearied indifference, or numbed incomprehension, from the public.   It is as if what happened to RBS was an Act of God, like this year’s floods, rather than the result of a systemic culture of  greed coupled with incompetence.

Ross McEwan has also announced that the radical new approach from RBS will be to stop using teaser rates and special deals that penalise existing customers (his words).  The aim will be to rebuild trust in the brand.

He did not explain why the bank, virtually fully nationalised by the bailout, did not adopt such a ‘radical’ option the minute it accepted 46 billion of public funds to stay alive.  Or why neither the previous nor this Government simply instructed RBS to move away from rip-off retail banking practices, if this is now seen as the route to the bank’s commercial salvation.

Several inquiries into the activities of the RBS Global Restructuring Group (GRG) -the “turnaround” unit on which there is growing evidence of serious malpractice – are now in progress.

The reality of the culture and behaviour of UK banks (not that they are alone) continues gradually to be exposed.   It remains a mystery to me why this process has to be so slow, and so lacking in robust confrontation.

Why do we have governments so reluctant to explore and acknowledge what happened, hold those responsible to account, stop bending to lobbyists and apologists from the financial sector, and regulate our banking system to greater effect?

Instead we now have a younger generation  disillusioned with our political class, deeply cynical of the financial sector and all its dealings, and aware that it will never attain the assets and lifestyle that a previous generation enjoyed.  Yet it is also a generation understandably too exhausted by the rigours of life to do much to change the situation.   Not an optimistic prospect.




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