I have been watching recent events with great interest. The Libor matter is difficult to understand and follow, but almost everything else is straightforward.
So, Libor first. It is quite obvious that there has been collusion between banks in fiddling the interest rate to their own advantage. Within hours of this becoming public the bankers are trying to pin the blame on government. Whether ministers or civil servants were involved is a total red herring. What the banks did was possibly illegal and definitely immoral.
Bob Diamond and other CEOs say that they were not aware of what was happening, yet it had been going on since 2009. These guys, with their multi-million pound salaries and even larger bonuses are supposed to be running the banks. Of course you don’t micromanage everything, that is why you delegate.
So these incompetent, cheating captains of banking did not properly delegate.
Whoever was fiddling the rates must have been someone’s responsibility. Why did he/she not stop it and report it upwards? The chain of command is there for just such eventualities and, in today’s world of unfair dismissal, no one is going to get dismissed for a single mistake, but where it involves the corruption of the system as outlined here, there should be a whole raft of dismissals and, hopefully, prosecutions too. I fear we will get neither and those who have fallen on their swords have spent the last several years building up reserves for themselves equivalent to multiple lottery wins. How good of them to resign and live the rest of their lives in luxury. Chance would be a fine thing.
So, executive pay. How did it get to this state? We all know, expect and probably don’t object to CEOs earning a lot of money, but it is the differential which seems to have gone mad. These guys seem to just vote themselves whatever figure they pluck out of the sky.
A consultant surgeon earns around £120k. Would we object to someone running a 10,000 person business earning double or treble or even quadruple that amount? Probably not if he/she did a great job, but that is not close to the £3,000,000 per annum being paid to these guys. It is silly money and also often linked to millions in extra bonuses and share options. OBSCENE is the only word.
So who will replace Bob Diamond? Someone currently earning 200k? So why not pay him 500k? Why offer millions? It does not make sense. They are playing with shareholders’ and clients’ money in setting these remuneration packages.
How does someone become a Bob Diamond? They are only ordinary guys who have a talent for performing well, but the difference between his ability and also-rans abilities are probably only marginal.
Somehow, executive pay must be capped and Britain should lead the way.
The NatWest saga: well this is just incompetence. When introducing a new or updated computer system what do you and I do? Unless we’re stupid we set up a restore point. So why did these idiots at the bank not set up a restore point.
Then all inputs and outputs are in their own individual files and, with storage costs could be kept for years, separate from the balances. That is how it is done. It means you can go back to the restore point and start again, adding in all the inputs and outputs after the system has been corrected.
Yes banks are big and yes, they have large numbers of customers and millions of transactions, but input and output files are always manageable. They are only data lists and should be independent of any account balances. That is the WHOLE idea!
Somewhere, someone installed that update without taking the precaution of ensuring the system was backed up and could be reinstated. There is no excuse for this and any CEO earning millions of pounds should be tearing heads off the incompetent idiots who allowed all of this to happen.
Frankly, of course, nothing any of us say or do is going to improve the banks attitude to their customers, that they are just statistics and not real people.