Us and them

We now have apologies from four of the country’s top former bankers for the disaster they inflicted on the nation. Let us be gracious and accept that they genuinely accept they did wrong and regret doing so.

However, I doubt very much if they have any idea what it is they are supposed to have done wrong or why there is such an uproar over the banking sector. They just did what everyone did and were unlucky it all unravelled in circumstances that were beyond their control.

The trouble with bankers is that, like politicians, they live in their own world, one that has little relationship to the lives of ordinary people.

Thus we should not be surprised that they see no reason for giving up their unearned and undeserved bonuses. While the rest of us in the real world are amazed that anyone should consider that bringing an entire banking system to its knees merits a bonus, bankers think that doing the decent thing is to take the bonus in banking shares rather than in cash.

That simply will not do. No bonuses are due for what happened in 2008 with the possible exception of those who were on the lowest wages, such as office cleaners and counter staff, who soldiered on with their jobs under threat and no ill-gotten loot from previous years to fall back on.

Certainly bonuses should not be paid in bank shares. These now have a very low value, so it would take a lot of shares to make up the monetary value of a bonus of banking proportions. If, as is likely, these shares gain in value when the crisis is over then the bankers who lost billions will still get an undeserved bonus by selling their shares at a profit.

The argument from the higher echelons of banking executives is that they have to pay the going rate. Wrong! Huge bonuses are the going rate for the very people we do not want to have running our banks, the people who ran the sector into the ground in the first place.

Why would you want to have executives who bankrupt your business?

We need to be recruiting solid, boring bankers who do the job for a living wage and don’t need huge bribes just to get out of bed. Because that is what bonuses are: a bribe, an extra payment for doing what you are already paid to do. If banking executives cannot do the job they are paid for, then they should not be employed in the first place.

More significant than the apologies of bankers is the resignation of Sir James Crosby as deputy chairman of the Financial Services Authority. At last we have someone among those responsible for the financial debacle getting his comeuppance.

The former chief executive of HBoS has been accused of sacking a whistleblower, Paul Moore, who lost his job as the bank’s head of risk because he warned HBoS that it was taking risks. I hope someone offers Moore a top job in banking as he is obviously knows a risk when he sees one.

Moore warned of ‘a serious risk to financial stability’ as long ago as 2005, way before 99.99% of the population, including me and probably most of the banking fraternity, realised how serious the situation was.The FSA, which has looked increasingly toothless, incompetent and naïve the longer it has remained in existence, is now digging itself into a deeper hole. It claims that Moore’s allegations were taken seriously at the time and were ‘properly and professionally investigated’.

Oh no they weren’t. For Moore’s claims were found to have no merit, according the FSA, when we now know he was absolutely right. To make matters worse, the FSA admits in the same breath that a year after Moore was shown the door the regulator told HBoS that its growth strategy ‘posed risks to the whole group and these risks must be managed and mitigated’.

By this argument, the unjustified problem that Moore had fabricated was spotted belatedly but quite independently by the FSA. It doesn’t add up. Moore was completely wrong but was entirely justified.

Moore alleged that Jo Dawson, the senior HBoS executive who replaced him, had never been a risk manager. She received a rather dubious clean bill of health from the FSA, which ‘did not believe that the candidate was not fit and proper’.

It hardly sounds like a ringing endorsement. She was not actually ruled to be fit for the job, just not found to be unfit.

It’s a gas

No wonder Life of Mars is such a popular TV programme. It is no more surreal than modern life. A woman is suing British Gas for allegedly harassing her with bills issued after she changed to another supplier.

British Gas has tried to get the action struck out before it comes to trial on the grounds that the bills were computer generated and should not have been taken as seriously as if they had come from an actual person.

One can today feel a little more confidence in British justice because the judge threw out this ludicrous argument. If British Gas has such contempt for the public, it is hardly surprising that it should show equal contempt for the courts.

Someone in British Gas should now play at being a banker and say sorry before its customers realise that the hefty bills for the winter quarter are not to be taken seriously.