Tax Payers lose £900M as investors fear political interference with RBS

[NorthernStar]

https://atsv7.wcn.co.uk/search_engine/jobs.cgi?b3duZXI9NTA1NTAyNyZvd25lcnR5cGU9ZmFpciZwb3N0aW5nX2NvZGU9NDkwJnVzZXJjb2RlPTAmJnVybF9rZXk9MGIwYTBiMGExNzBiMDgwMzAzMDIwZTBjMGEwZjAyMTc1ZTAyMGQwYTVjMGUwZTU5MDIwYzAyNTkwMzU4MDk1YzBlMDg1YjViNWMwMzAzMDM1ZjBmMGM1OTA5MGQ1ODU5MGEwODBmMDIwYTViNWM1ZjNh=&owner=5055027&ownertype=fair&posting_code=490&usercode=0

 

Interestingly, your list of jobs link shows that most of them are in china, I see from this link that the most ambitious western style bankers are rewarded appropriately in China.

[L00b]

I know they like their physics / maths / computer nerds to devise and understand ever more complicated trading models but many of the big bonuses go to what are effectively salesman.

Need I remind you that it was your argument, that "banking isn't rocket science"

 

The size of their bonus (or not) wasn't an issue/considered at all.

 

I'd love nothing more than for talented traders (no, that's not those old boys running FTSE100 Co's...which probably number a few thousand in the country, if that) to leave.

 

After all, it's not as if we need to keep a super-performing financial sector to keep UK plc's nose above water right now, is it? We could instead have an average "equalitarian" financial sector, based on the same lowest-common-denominator model as, mmm, the education system?

 

BTW, that's not an argument for giving the financiers a free get-out-of-jail card (they've got one already anyway ), it is an argument for attracting and keeping the best financiers on a global scale. In the current economic circumstances, they're a national economy asset. After we're clear out of that, and if by that time you still want some scalps to pay for the debacle of the last 10 years (or the green monster still tickles you), by all means go forth and have at them.

[andyofborg]

Let's not go on too much about the 'for profit' angle, as it's only ever going to be a "what if" until we get the benefit of hindsight (), and (IMHO) the Gvt would not have invested, had it considered that it would never recoup its investment (it would have bailed relevant creditors under UK bank default garantee provisions instead - much cheaper option).

 

I'm not sure if it would have been a cheaper option to have allowed the bank to fail. As I recall there was a genuine that if a big bank failed then that would cause a number of others to fail as a general panic took hold.

 

I fully agree with the second bold bit (ensuring survival), however I disagree with the first bold bit (different basis to a private investor), because of the above, reinforced by the fact that, in the absence of an actual nationalisation (effecting Gvt control) of RBS and Lloyds (as a counterpart for the life-sustaining cash injection at the time), these 2 concerns remained private organisations existing in a free (hitherto "non-interfered with") market, free of political shackles.

 

This isn't a free market though, there is an expectation that for the large banks, at least, then the government would save any which were on the brink. The free market option would have been to allow RBS and HBOS to fail.

 

Noone is going to advise a buy on RBS shares/invest in RBS (which is what's needed and has been slowly happening/worked towards),

 

As the government isn't going to sell its shares anytime soon then it doesn't matter if anyone buys or sells any shares. When the government does decide to sell then i'm guessing they will do it in a similar way as they did with the great 80's asset stripping rather than trying to sell them on the open market in which case government involvement will cease and no one will care what they say.

 

The other point, of course, is that the bank is being shrunk so can a bank which is half the size as the one which was taken over ever be sold at the same price?

 

The other thing about the banking market is that it is almost impossible for a new entrant to enter it. we have a cartel of half a dozen big banks who can do pretty much what they like. Rather than worrying about making a profit the governement could split RBS (and Lloyds) into a number of smaller solvent banks which aren't to big to fail and float them off as separate institutions, force the other big banks to either break up or at the very least properly separate their retail and other operations and use regulation to prevent consolidation back into "to big to fail" banks.

[L00b]

I'm not sure if it would have been a cheaper option to have allowed the bank to fail. As I recall there was a genuine that if a big bank failed then that would cause a number of others to fail as a general panic took hold.

Depends if it would have caused a run or not. Rule of thumb, considering the general level of personal endebtment at the time and -precisely- your argument about the remaining dominant players (HSBC, Natwest) - there wouldn't have been...but what do I know.

This isn't a free market though, there is an expectation that for the large banks, at least, then the government would save any which were on the brink. The free market option would have been to allow RBS and HBOS to fail.

Goes without saying (and I was all for it at the time ), but considering most Gvts (of major economies, at any rate) bailed their majors just the same, the UK bailout had a nil net effect on global markets.

<...>Rather than worrying about making a profit the governement could split RBS (and Lloyds) into a number of smaller solvent banks which aren't to big to fail and float them off as separate institutions, force the other big banks to either break up or at the very least properly separate their retail and other operations and use regulation to prevent consolidation back into "to big to fail" banks.

Eminently sensible. Far too much so, to have any chance of seeing the light of day

[T 42]

Interestingly, your list of jobs link shows that most of them are in china, I see from this link that the most ambitious western style bankers are rewarded appropriately in China.

 

I'm not sure that you have an understanding of banking if you think looting is part and parcel of it.

 

But jobs in finance and investment are available all over the world. Thats because the rest of the world would love to pinch the business from the City of London.

 

http://jobs.efinancialcareers.com/singapore.htm

 

http://jobsearch.monsterindia.com/searchresult.html?jbr=874&cat=2

 

http://jobs.efinancialcareers.com/japan.htm

[Lockjaw]

The taxpayer has lost almost £900million on the value of its shares in Royal Bank of Scotland and Lloyds Banking Group amid fears that the backlash against bonuses would damage their performance.

 

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9050671/Taxpayers-lose-900m-as-RBS-shares-fall.html

 

Stephen Hester, the chief executive of the Royal Bank of Scotland, gave up his bonus after sustained political pressure that culminated in Labour calling for a parliamentary vote.

 

The share price of RBS dropped by 3.5 per cent yesterday, wiping £580 million off its value. Lloyds, where the chief executive has also turned down his bonus, saw its share price fall by 4.1 per cent, stripping £921 million off its value.

 

With the taxpayer owning 83 per cent of RBS and 41 per cent of Lloyds, that equates to a fall of almost £900 million in holdings — equivalent to £36 for every British family.

 

It makes the prospect of recouping the £45 billion used to prop up the banks in 2008 even more distant.

 

 

But on the plus side we've saved nearly a £million by recouping his bonus.

 

*Chuckle* ... I didn't have to wait as long as I expected to make this post!

 

Hello again, T.

 

As I write, the RBS share price is as high as it was before the Hester bonus announcement and, today, RBS is worth 618 million more than yesterday.

 

Does this mean it was a good idea after all? Or, is it because poor Fred is not a sir any more? Or, is it because of the Icap trading statement? Or, is it because I had a curry last night which always increases the general amount of happiness in the world?

 

Or, does it simply demonstrate that somebody using two days worth of share price movements to make a point is either being disingenuous or simply doesn't understand share price movements?

 

What do you think?

[T 42]

*Chuckle* ... I didn't have to wait as long as I expected to make this post!

 

Hello again, T.

 

As I write, the RBS share price is as high as it was before the Hester bonus announcement and, today, RBS is worth 618 million more than yesterday.

 

Does this mean it was a good idea after all? Or, is it because poor Fred is not a sir any more? Or, is it because of the Icap trading statement? Or, is it because I had a curry last night which always increases the general amount of happiness in the world?

 

Or, does it simply demonstrate that somebody using two days worth of share price movements to make a point is either being disingenuous or simply doesn't understand share price movements?

 

What do you think?

 

Well not quite. The market fell over 2 days by twice what it bounced back but that is hardly the point. The fact that you've had to pick a moment, shows that you know the damage has been done.

 

The point is that traders, ratings agencies and financial publications are now marking RBS as a company that is likely to suffer from increased political interference. The damage is done. It is like Gordon Brown announcing to the world that he was going to sell our gold reserves. The market took note and we lost billions.

If it makes you happy to think that no damage has been done that's OK. But the fact is that we've all lost a lot of money this week.

[ricgem2002]

Well not quite. The market fell over 2 days by twice what it bounced back but that is hardly the point. The fact that you've had to pick a moment, shows that you know the damage has been done.

 

The point is that traders, ratings agencies and financial publications are now marking RBS as a company that is likely to suffer from increased political interference. The damage is done. It is like Gordon Brown announcing to the world that he was going to sell our gold reserves. The market took note and we lost billions.

If it makes you happy to think that no damage has been done that's OK. But the fact is that we've all lost a lot of money this week.

its time more of the worlds governments pulled the banking sectors rein in, who do them bankers think they are ?

[Lockjaw]

Well not quite. The market fell over 2 days by twice what it bounced back but that is hardly the point. The fact that you've had to pick a moment, shows that you know the damage has been done.

 

The point is that traders, ratings agencies and financial publications are now marking RBS as a company that is likely to suffer from increased political interference. The damage is done. It is like Gordon Brown announcing to the world that he was going to sell our gold reserves. The market took note and we lost billions.

If it makes you happy to think that no damage has been done that's OK. But the fact is that we've all lost a lot of money this week.

 

So, you didn't fancy answering my question then?

 

Fair enough. Since I'm here, though, I'll put right some of your innacuracies for you.

 

Well not quite. The market fell over 2 days by twice what it bounced back.

 

Nope.

 

Before the announcement, the SP was hovering just below 28p, the low after the announcement was around 26.3p, they're now at 27.75p. Todays rise of 1.13 % is larger than the total fall after the Hester thing of 1.12 %. If you are going to draw fallacious conclusions from random fluctuations of share prices, at least get your random fluctuation data correct or your subsequent erroneous claims will have no credibility.

 

The fact that you've had to pick a moment, shows that you know the damage has been done.

 

You miss my point. Even though I knew you were talking nonsense, I wasn't expecting the SP to bounce back so quickly (for other reasons I'm guessing you wouldn't understand - trust me, I follow the RBS SP very closely.) so I was delighted to be able to point out your fallacy much sooner than I'd anticipated.

 

 

The point is that traders, ratings agencies and financial publications are now marking RBS as a company that is likely to suffer from increased political interference.

 

Conceivably.

 

If you'd used this as your evidence in the OP, instead of the SP fall, you would have been more convincing.

 

If it makes you happy to think that no damage has been done that's OK.

 

It never ceases to amaze me that posters, having had the weakness of their evidence pointed out by me suddenly think they know my opinion, even though I haven't stated it. Are you Jim in disguise?

 

But the fact is that we've all lost a lot of money this week.

 

Nope.

 

We haven't lost a bean old boy. That has been explained to you above so I won't elaborate.

[Darth Vader]

So, the banking world are raising merry hell because for once we've not allowed them to take the michael. Excellent. As for the threats to take their 'talents' elsewhere....if only!