I understand that Shell were taken to Court in a class action last year in th US about understating their Oil reseves to shareholders.
I belive that Compensation of hundreds of millions looks like it is being, or is going to be awarded to Shareholders.

If this case is successful or not it may not be the last action, as RBS shareholders are Worldwide, and the US is keen on litigation.

We feel that it’s one of the most fierce and ruthless but measured summaries of a British politician that we’ve ever seen from an overseas commentator. It contains the very sentiments that this blog – and those of other thinking Conservatives – have been expressing for a long long time!

The summary of the article is as follows…

Irwin Stelzer: BRITAIN CAN BE FIXED – BUT NOT BY A PM WHO WANTS TO SAVE THE WORLD

“It is a pity that Gordon Brown has decided to substitute truculence for calm reason when confronted by his critics. For my guess is that when the history of the Brown era is written, he will realise that his defensiveness; his unwillingness to admit a single error; his dishonest effort to paint the Tories as a do-nothing party, despite the fact that some of their ideas were so sound that he filched them, detracted from his real accomplishments.” – Irwin Stelzer writing in the Daily Telegraph

A. The small shareholder who is to make a claim on RBS in the small business court for his losses incurred from misrepresentation of the bank’s financial position prior to, we think the news said, the rights issue last year.

B. The U-turn by the Parliamentary Ombudsman who is now to investigate the Home Secretary’s housing arrangements and claim…all because her neighbours made a complaint in the public interest. Mumbling by MPs and the media didn’t do the trick but ordinary voters’ voices did!

In response to John’s blog this week, and without getting too carried away, is this further encouragement to us all that we CAN have our say and make a difference?

We shouldn’t be suprised that people have forgotten these lessons.

To para-quote Maggie: “You can never stop winning the argument!”

http://www.bloomberg.com/apps/news?pid=20601068&sid=a_YrfCU4wkN4&refer=home

mean that the Bank of England is about to start printing money?

“Feb. 18 (Bloomberg) — Bank of England policy makers unanimously agreed to ask the government for authority to create money in an effort to kick start the economy, saying further interest rate cuts may hurt the profitability of banks.”

If so does this really mean we are about to “go Weimar” and end up buying loaves of bread with wheelbarrows of worthless pounds?

As that rare man who is both a politician and in possession of an economic clue, I would appreciate your thoughts on what appears to be a very serious matter.

Reply: yes it does, and yes it could become serious if they do too much of it.

On one hand your assertions are completely correct and yet at the same time I wonder if there is a single Government who would be willing politically to allow thousands of business to go to the wall and millions of voters to lose thier jobs if they thought they could prevent that.

So I am torn between being mortified at the volume of Government borrowing (deferred taxes) which are now being thrown with increasing regularity by our Government at ‘cases which can’t be allowed to fail’ and wondering what the landscape of our economy would look like today if the Government had allowed Northern Rock, HBOS and possibly a number of other banks to collapse 16 months ago.

I suspect that the answer to the question lies in the approach being taken. A Government which chose to (as you often suggest) try and tighten it’s spending commitments and eliminate waste, whilst committing support to businesses and individuals in the form of significant (albeit temporary) tax reductions would attack the problem from the other direction – of reducing everyone’s outgoings and freeing up cash which would then find it’s way back into the economy.

Unfortunately we are where we are, and Brown the Controller wants to have his tax/spend cake untouched, and seems unwilling to trash the complex edifices of his tax credits system with such measures. The state sector continues to grow whilst taxes and Government borrowing increase unabated as the private sector faces the full brunt of a recession and a future of paying for it all.

Clearly the electorate is displaying very clear intentions of removing Brown and his cohorts from office at the next election. My sympathies go out to whoever will inherit this shocking mess. It’s not a job I would relish solving, and more so because it seems fairly clear to me it will take more than the lifetime of a single Parliament (or even two) to balance the balance sheet that Gordon is going to leave us with.

Perhaps we need to extend the bankruptcy code, to deal with this situation. If a strategic company becomes insolvent, the government could be given the right to make directions about the way the bankruptcy proceeds.

For example, suppose Railtrack had called in administrators. With my scheme, the government would then decide what happened next. If it wanted to set up Network Rail, it could direct that the bankrupt company’s assets be transferred to the government.

This would not disadvantage shareholders; they have already lost their money, because the company is bankrupt. It would, however, disadvantage creditors, and they would have to be compensated. To begin with, the government could negotiate compensation with the administrators. If they were unable to agree the amount, the matter could be decided by the judge who made the bankruptcy order.

I used Railtrack as an example because it is simpler than the banks. This system could also be used with a bankrupt bank, though. The government could, for example: direct that the bank wind up its derivatives book; direct that the bank continue making loans to its commercial clients; not pay bonuses; or whatever is felt to be most helpful for the wider financial system.

Because the bank is bust, the government can choose which creditors it will support. Currently, bust banks owe money to their depositors, their commercial creditors, and they owe money to their traders in the form of contractually agreed bonuses. As a matter of law, the bank must pay all these people while it has the money to do so, even if that money comes from the taxpayer. On the other hand, if the bank is bust, the government could direct that it continue making payments to retail depositors. This would involve the payment of compensation, because other creditors would otherwise be disadvantaged. However, the government need not provide money for contractual bonuses if it didn’t want to. If it chose not to, people entitled to those bonuses would be unsecured creditors, entitled to a share of the money when the administrators eventually sold or refloated the bank.

Have we learnt nothing in the last 100 years or so? Ronald Reagan – a man of keen common sense if not academic learning – famously said the following. Read and wonder at the insight contained:
“The 9 most dangerous words in the English language are ‘We’re from the Government and we’re here to help’”!