Questions for the current RBS management

It is a sign of times disfigured by spin that the former heads of banks make headlines, whilst the current heads who could solve our problems or make them worse will doubtless attract far less interest.

The questions we need the current management of RBS to answer include:

1. Will you trade at a profit this year, after last year’s huge losses?
2. What action are you taking to cut the costs of your expensive bank?
3. Will you cancel all descretionary bonuses for 2008 given the large losses?
4. Will you ask all senior executives to forgo contractual bonuses for 2008 given the large losses, to instil some sense of collective responsibility?
5. Which assets and trading businesses are you planning to sell this year, to reduce risks to the taxpayer and bring in some cash?
6. How long will it take you to net out your positions in sophisticated financial instruments, and reduce the capital at risk in such activities?
7.What interest rates are you going to offer savers to encourage more UK deposits?
8. What are your plans for new UK lending in 2009?

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12 Comments

  1. Andrew Withers
    Posted February 11, 2009 at 8:22 am | Permalink

    Do you really know know what the extent of your liabilities are

    What stance are you going to take on the unfair charges test case brought by the Office of Fair Trading

  2. Amanda
    Posted February 11, 2009 at 8:57 am | Permalink

    Quite right. I felt very uneasy watching the bankers yesterday – then I realised why ‘show trials’, which we probably last saw in this country in the seventeenth century witch trials. (Of course Stalin and McCarthy also made use of them.)

    The people who have led us to ruin are the Labour party and may I also say a weak opposition. Labour have not even addmitted they made a mistake, let alone wrong doing, whilst the daily relevations of their ‘black arts’ carries on virtually unquestioned.

    How do we stop this dreadful state of affairs?

    • APL
      Posted February 12, 2009 at 8:15 am | Permalink

      Amanda: “The people who have led us to ruin are the Labour party …”

      True, why do we rarely hear it repeated that Gordon Brown was the finance minister for a decade, and can’t pretend he knows nothing about the state of affairs just because he has moved next door.

      Amanda: “.. and may I also say a weak opposition. ”

      Yes, The Tory party has spent the last ten years in a state of civil war, (thanks Ken Clarke) and self criticism (we are the ‘nasty party” – Theresa May). Both back in the cabinet.

      Surely, some new talent must have emerged on the Tory back benches during ten years in opposition?

  3. Nick
    Posted February 11, 2009 at 9:48 am | Permalink

    Questions for government

    1. When are you going to publish an accurate set of accounts including all future liabilities?

    2. When are you going to cut back on your pork?

    3. When are you going to refund your overpaid expenses, forgo your pensions?

    4. When are you going to stop running ponzi schemes?

    5. When are you going to tell people that a PAYG pension scheme means people missed out on compound interest on their pension contributions, and would have been up to 5 times richer in their retirement if you hadn’t spent the cash

    6. When are you going to admit to failures in banking regulation

    7. When are you going to stop threatening nationalisation, because that means no private money will come forward for investment in a threatended bank?

    8. When are you going to pay off the government debts?

    9. When are you going to stop spending more than your tax revenues?

    Forget the banks, the real problem is politicians and government

  4. Lola
    Posted February 11, 2009 at 10:16 am | Permalink

    and also…

    9. Are you going to sort out your fundamental business model that uses penalty charges to subsidise your business, whilst not properly charging and rewarding all customers that use your services? (The chimera of ‘free banking’).
    10. Are you going to change the culture of arrogance that permeates every bank in the UK, and which is totally undeserved?
    11. Will you stop working in areas that you know very little about but have been dabbling in without any success since 1986, like insurance and investment, where the evidence in my files is of unremitting client exploitation and appalling advice and service.
    12. Are you doing to learn how to differentiate between the added value and wealth creating opportunities, not without risk, that will accrue by suppprting enterprise, to the mad moeny go round of domestic mortgage lending that purely drives bubbles?

    etc etc etc…

  5. StevenL
    Posted February 11, 2009 at 11:20 am | Permalink

    Perhaps it would be more interesting to get some experts to frame quiz style questions about their banks, their annual reports and about banking in general and find out if they actually know what they are talking about?

  6. Simon D
    Posted February 11, 2009 at 12:04 pm | Permalink

    MP’s also need to ask an important to the Government as follows:

    “The taxpayer is the largest shareholder in RBS. Have both the Government and the FSA seen the RBS business plan for 2008? Have they made any input to it? Are they satisfied that the interests of the UK taxpayer, who will bear any losses, have been fully taken into account in the plan.”

  7. Neil Craig
    Posted February 11, 2009 at 12:55 pm | Permalink

    The thing had the air of Stalin requiring erring members of the Preasidium to ritually apologise for everything that had gone wrong before, if lucky, being sent to be ambasador to outer mongolia.

    Of course the real responsibility for mismanging the economy lies with government with a massive side order of blame for the 4th estate who were all whoop de whoop at the time. However the bankers don’t control the media so that doesn’t get discussed – see Prescott’s refusal today to acknowledge that Labour were even in the room at the time.

  8. DBC Reed
    Posted February 11, 2009 at 5:19 pm | Permalink

    Is n’t anybody a bit concerned that a bank like RBS has such huge liabilities in comparison with the GDP? People go on about the overmighty State but the State looks like any number of British monarchs who,in the past,were actually poorer and less powerful than the big landed families.

    • APL
      Posted February 13, 2009 at 12:07 am | Permalink

      DBC Reed: “Isn’t anybody a bit concerned that a bank like RBS has such huge liabilities in comparison with the GDP?”

      I wouldn’t be, if we weren’t infested with Socialists trying to nationalize everything and bring those liabilities onto the books of the United Kingdom. Along with, it is worth saying, Gordon Browns ‘public private’ partnership liabilities accrued over a decade of reckless spending.

      Gordon Brown and Alistair Darling have done exactly the wrong thing, they have exposed the British public to practically unlimited liabilities.

      Right back at the beginning, they should have said, the general public who have deposits with Northern Rock, will be protected. Northern Rock will be declared bankrupt and wound up.

      The public liability would have been capped, the shareholders, the bond holders taken the rap!

      Bingo, a salutary lesson to RBS, HBOS, Bradford & Bingley to get their house in order, or the same thing will happen.

      Instead, Brown saw NR as a vote buying exercise in Northern constituencies. As a result the UK plc is practically bankrupt.

  9. THE ESSEX BOYS
    Posted February 11, 2009 at 9:11 pm | Permalink

    2 banks were fingered at today’s Select Committee for tax avoidance – a sickening slap in the taxpayer’s face when our funds are keeping them afloat and in jobs. How much executive time and consultancy costs go into all that?

    And a couple of interesting comments on today’s blog sites…

    “…..the “bonus” is usually a very much larger part of the package, often individually negotiated, in order to minimise the taxation liabilities of both parties, and where the entitlement targets criteria are often deliberately lenient or ambiguous.”

    *********

    “….as directors of major public companies, many, if not most of these individuals have been in breach of their statutory duties, as directors, under the provisions (both civil and criminal) of the Companies Acts, compliance with which would be an essential part of their own contracts of employment of their banks.”
    **************

    Reply:If you have evidence then bring it forward for such bad conduct. I have deleted allegaitons about an individual for legal reasons.

  10. mike stallard
    Posted February 11, 2009 at 11:24 pm | Permalink

    I am absolutely staggered by the inefficiency of a government which has (I presume) no answer to your commonsense questions above. Have they even seen the importance of these (to me) very obvious ideas?
    I am also staggered by the way the bankers are behaving: talk about turkeys voting for Christmas!
    Meanwhile we head for a seemingly inevitable disaster like Iceland.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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