I was regretting having such a busy day today as it meant light blogging so I was suitably pleased to see a welcome three-way onslaught of hits from different directions:
The New Statesman's blog roundup, the Telegraph's blog section and Slugger O'Toole's regrettably sensible conclusion that Scotland faces a long hard squeeze.
It's on that last point that I myself am squeezing in 15 minutes of blogging action to lament the passing of Dunfermline Building Society. It is a very sad situation, particularly given the history and the apparently poor conduct on the part of the Treasury who did not engage with the troubled building society until they deemed it to be far too late.
Of course, when the Chairman himself (Jim Faulds) is flatly contradicting the Chancellor that the society could be a going concern with the SNP's £20m, that it doesn't have any sub prime debt exposure and that KPMG had decided in an independent audit that no takeover of the building society was necessary, then one can only be concerned. Discussions between the Government and Dunfermline should have been such that they were both singing from the same hymn sheet having hammered out a deal long before now. The Treasury, quite simply, dropped the ball.
The quick sale to Nationwide, although a welcome safe haven of capital and a safeguarder of jobs, seems rather shabby and the suggestion from Jim Faulds that it is the result of political retribution seems to have some weight to it given the doors were opened to the SNP injecting the money required to save the institution and keep it independent.
But the overall picture in Scotland is gloomy, there is no doubt about that. Once the dust from the HBOS, RBS, SWIP and Dunfermline debacles settles, we will have to cross our fingers and hold our thumbs that Edinburgh is anywhere close to the 5th strongest financial centre in all of Europe as it was a mere few years ago.
With the classic Scottish traits of stoicism, prudence, pragmatism and hard work, not to mention a healthy dose of gallows humour, I suspect our banking sector will emerge stronger and fairer in the not too distant future.
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11 comments:
Why did it not change its name to Northern Rock( Scotland) and wait for the squillions?
Anyone know?
They only do that if the head office is south of the border.
"With the classic Scottish traits of stoicism, prudence, pragmatism and hard work, not to mention a healthy dose of gallows humour, I suspect our banking sector will emerge stronger and fairer in the not too distant future."
Let us indeed hope that is the case, but lets us also hope that the less attractive trait of Scottish self pity doesn't return.
Alex Salmond's knee jerk 'it was the Spivs and Speculators wot done it' response after the downfall of HBOS was as pathetic in its appeal to Scottish self pity at it was a refection of his judgement and fitness to govern.
Anyone who thinks The Dunfermline could have been saved with £20m frankly needs to get their head out their arse and smell the coffee. Of course Jim Faulds isn't going to say "I made a complete cunt of it", but he did! The Dunfermline was riddled with toxic debts due to bad loans. Nobody but the dumbest Cybernat doubts that.
A bad day for the Scottish financial sector, but no excuse for self pity.
Faulds is an out of touch semi- dishonest clown, This the FSA worked out with a month after meeting him. This salmond and co worked out within a month a meeting him
He fooled most of us with his disengenius drivel yesterday
£20 million would have paid the wages and serviced the debt for about three months. Some resuce package. But what do you expect from a clown that sanctioned a £12m investment in an already technically bust Yorkshire based IT company ( and oh how patriot investing Scottish money in this joke venture)
Its that this guy survived in post until the day the society he chaired was abolished from under him that is remarkable.
The traesury told him nothing about imminent Nationwise takeover he complains. Nae wonder!
Think about it
Well done Murphy, well done Salmond
Yep, I was actually sent an email from someone who shall remain anonymous but what they had to say certainly changed my mind somewhat, as did the comments of Van and AWC.
It does seem Jim Faulds might not be telling the whole story but it's still a sad situation and I still think Scotland will come back stronger and with a more balanced, socially minded financial sector once all is done and dusted.
Alex Salmond's knee jerk 'it was the Spivs and Speculators wot done it' response after the downfall of HBOS was as pathetic in its appeal to Scottish self pity at it was a refection of his judgement and fitness to govern.
- Who or what is to blame then?
If the executives who are, or were, in charge of these financial insitutions and were given vast sums of money for taking on their responsibilities weren't to blame, then what were they getting paid for all those years, when they were driving their companies and the economy into the abyss?
Maybe Gordon Brown, the former Iron Chancellor for all those years, is to blame perhaps?
In fact, Gordon done such a good job at the UK Exchequer he got promoted to Prime Minister, no general election required.
I remember when my local Ravenscraig steel works, and the rest of the publicly-owned, British Steel ran into debt. The of howls of pain and anguish were never ending, and those in responsible positions weren't let off the hook.
Now - instead of blaming the Chancellor and the financial instutions, regulators and Thatcherite/New Labour de-regulation and public asset stripping and destruction - they just can't wait to give people the blame who have, and had no power or influence over the ever growing economic recession/depression.
Of course, if we had our own government and Scottish institions weren't being sold by the British government to foreign concerns, then of course, we in an independent Scotland would only have ourselves to blame for messing things up (as in Iceland to take the most (in)famous example).
Part of the problem of the current economic depression is that important decisions were getting made, affecting communities, who had no power to influence those decisions. Removing local buisnesses and institutions abroad is part of the reasons for the currrent economic problems, and selling off the Dunfermline is merely repeating the mistakes which has brought us all to the current sorry state.
Just to note -
- borrowing money you don't have the wherewithal to pay back is what started the current economic depression. So no surprises that the banks and financial institutions have just off-loaded their horrific toxic debts onto the taxpayer. Gordon Brown is quite happy to join in the pyramid selling scheme started by Thatcher.
Again the UK government is merely repeating the neoliberal/Washington Consensus mistakes that got us all into this sorry mess in the first place.
Anyone who thinks The Dunfermline could have been saved with £20m frankly needs to get their head out their arse and smell the coffee.
- Compared to the taxpayers subsidies already poured into the bottomless coffers of private finance to keep their shareholders solvent, the money needed to keep the Dunfermline going can't even be described as pin money.
'Aye We Can!' quotes the figure of £20 million needed every 3 months to keep the Dunfermline going - is that all. That sounds like a bargian these days.
all the best!
Who or what is to blame then?
Salmond blamed the "Spivs and Speculators" and not those actually in charge of RBS, i.e. the ones who were actually resonsible and whose incompetence and failure caused the bank's downfall. If Salmond had stood up in Parliament and said "Sir Fred Goodwin is an utter tool of the highest magnitude" I would certainly have respected his bluntness as much as his accuracy.
Trying to blame others was dishonest, it wasn't spivs and speculators who bought ABN Amro.
"Maybe Gordon Brown, the former Iron Chancellor for all those years, is to blame perhaps?"
He must take a significant share of the blame, he was enthralled to the bankers and did not see to it that they were regulated severely enough, he also failed to put anything aside for a rainy day and hence we have monstourous public debt.
"'Aye We Can!' quotes the figure of £20 million needed every 3 months to keep the Dunfermline going - is that all. That sounds like a bargian these days."
Aye We Can said "£20 million would have paid the wages and serviced the debt for about three months", I don't think he was suggesting all it needed was £20m every 3 months and everything would be fine. It had £900 million in toxic assets that are being stripped out as part of the deal.
The Dunfermline was in far more serious trouble than Faulds has been prepared to admit, but their problem was - like many others - they got greedy and overstreched themselves. They wanted to play out of their league, they looked around at other institutions making shed loads of money and thought they could to.
Buying debts from Lehman Brothers probably seemed like a good idea at the time, but there main problem was excessive lending in the commercial property sector and it's that which has fucked them.
"Of course, if we had our own government and Scottish institions weren't being sold by the British government to foreign concerns, then of course, we in an independent Scotland would only have ourselves to blame for messing things up (as in Iceland to take the most (in)famous example)."
In view of the unholy mess Eire has got itself into, a large part of that due to the property and construction boom, I found myself wondering whether Scotland might have done the same sort of thing if her circumstances had been different. I suspect yes is the answer to that, and perhaps it may prove a valuable lesson of how we should conduct ourselves in the future.
Salmond blamed the "Spivs and Speculators" and not those actually in charge of RBS
- That's fair enough, but I just took it he meant those inside the banks and financial institutions as the spivs and speculators.
After all, what was going on inside banks was no different from what was going on outside them.
Indeed, as 'banks' have became more than just banks, it is gets a little difficult to distiguish a 'banks' from other financial institutions, given the nature of Thatcherite-New Labour de-regulation and neoliberal so-called 'reforms'.
In view of the unholy mess Eire has got itself into...
- Why pick on Ireland to compare with Scotland?
There's plenty more countries in the world.
He must take a significant share of the blame...
- Yes I know, that's what I just said.
Not only was Gordon Brown Chancellor, for quite some considerable time, he was so good at his old job, he was given the post of Prime Minister.
The Dunfermline was in far more serious trouble than Faulds has been prepared to admit,
- But still pin money compared to the hundreds of billions getting thrown at other similar problems.
I suspect yes is the answer to that, and perhaps it may prove a valuable lesson of how we should conduct ourselves in the future.
- But the problems to do with neoliberalism and the Washington Consensus have been known for some time, so ignorance on the part of government is no excuse.
Only when problems started to affect the rich did the British government start to interfere in the free-market, in order to cushion rich shareholders from the effects of neoliberal reforms they were once so enthusiatic about, until they became its victims too.
After decades of making hundreds of billions from de-regulation and market 'reforms', these financial institution, and their shareholders, have now lumbered the taxpayer with about a trillion pounds of debt with only a bunch of failed banks to show for it.
Actually re Ireland, I was there a couple of weeks ago.
Now they do have problems including in their banking sector but at least they will come out of this with a banking sector, unlike Scotland. This is because they have an Irish government rather than an English one with a different agenda.
On what I saw and heard, I would rather go through an Irish recesssion than a British one.
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