HOOD ROBIN
Below is an article from the Independent:
http://www.independent.co.uk/opinion/commentators/dominic-lawson/dominic-lawson-a-sorry-tale-of-scottish-shame-ndash-and-english-tolerance-1623819.html
Dominic Lawson: A sorry tale of Scottish shame – and English tolerance
Gargantuan folly has occurred North of the Border. And who is paying the costs?
Sometimes I wonder if hubris is a Gaelic word, rather than ancient Greek. It seems only yesterday that all of Scotland was in uproar over the takeover of HBOS by Lloyds TSB.
The leader of the Scottish National Party, Alex Salmond, sought to find ways to block the deal, in an attempt to avoid the humiliating capture by an English firm of a Scottish institution whose incorporation predated the Act of Union. The former bosses of the Royal Bank of Scotland and the Bank of Scotland attempted to mount a counter-bid, claiming that the English were getting the business on the cheap, with the connivance of the Government in London. Their argument looked ridiculous then – and now it looks positively insane.
As the full horror of HBOS's balance sheet gradually emerges, like the beast from 20,000 fathoms, the proper fury is entirely that of the Lloyds TSB shareholders, who now realise that the deal could end up forcing their own – hitherto perfectly sound and well-managed bank – into nationalisation. Gordon Brown took a lot of credit for the rushed merger – it would never have gone ahead if he had not personally guaranteed Lloyds TSB's chairman, Sir Victor Blank, that he would prevent the competition authorities from blocking the deal, as they assuredly would have done in normal circumstances. Now the more cynical among Lloyds TSB shareholders see the deal as a cunning way for a Scottish Prime Minister to get largely English private investors to pay the costs of more gargantuan financial folly from North of the Border.
Gordon Brown can protest in vain that he – and indeed his equally Scottish Chancellor, Alistair Darling – was denounced as "a traitor" by the Scottish Nationalists when he pushed the deal through. It is now his sorry fate to be despised by English and Scots alike. Note, by the way, that there was no such uproar in Scotland when the Westminster Government took a majority stake in RBS, thus saving the other of Edinburgh's banking behemoths from immediate liquidation.
Since over half of the Scottish economy is bankrolled directly by Westminster – amounting to a gigantic subsidy by English taxpayers – this arrangement could be seen as entirely normal, exciting neither outrage nor gratitude. It certainly helps to explain why Alex Salmond, himself a former chief economist of RBS, made no fuss about that particular bail-out. I think we can rule out embarrassment as a factor, although given that Mr Salmond declared a year ago, "The Scottish banks are among the most stable in the world", it would have been the natural human emotion in such circumstances.
Not the least of the ironies of the Caledonian debacle is that it was the takeover of the National Westminster Bank by RBS a decade ago which lies behind so much of what subsequently unfolded. RBS had in fact to fight a bitter battle with the Bank of Scotland for the control of NatWest. Both Scottish banks were much smaller than the English financial institution they wanted to buy, and both were openly dismissive of the fuddy-duddy "Captain Mainwaring" London management of NatWest who did not understand the modern style of banking, which believed in a much more 'dynamic' use of capital.
In the end Sir Fred Goodwin of RBS made a more convincing example of ruthlessly aggressive Scottish management – hence his nickname of Fred the Shred – and he took control of NatWest. The deal, in terms of its ability to generate maximum income from a relatively narrow capital base, was the model for the later disastrous bid for ABN Amro, which as we now know, was the final hubristic act resulting in Sir Fred's – and Edinburgh's – nemesis.
I say Edinburgh, because it was Scotland's financial establishment which backed Sir Fred Goodwin to the bitter end. None more so than the once cautious and reliable Standard Life, which, when questions were raised by some London-based investing institutions about the sanity of taking over the deeply troubled ABN Amro, put its entire corporate publicity machine behind Sir Fred. This – which may be no coincidence – is the same Standard Life which this week has reimbursed £100m to policy-holders whose pensions it had invested in so called "cash deposits" (supposedly the safest of all investments) which actually turned out to include toxic mortgage-backed securities.
You might think I am exaggerating the element of specifically Scottish swagger in all of this; I offer as partial evidence the fact that at RBS's annual shareholders meeting in 2007, the directors took their seats to the pumped-in sound of the theme music from Braveheart. By the time of the last annual general meeting, this nationalistic tub-thumping was suddenly omitted – just as well, since some of the disillusioned investors had begun to challenge the board over its tradition of being dominated by Scots: Sir Tom McKillop, RBS's chairman, mounted what was described by a reporter at that AGM as "a heroic defence". Very Braveheart, although some tax-payers might now be wishing that Sir Tom had been given the same treatment that William Wallace endured at the hands of the vengeful English, rather than allowed to resign without a scratch on his body.
The same people might have imagined that Sir Tom would receive the parliamentary equivalent of ceremonial disembowelment when last week he faced the inquisitors of the House of Commons Treasury Select Committee. The tone, however, was set at the outset when the Committee's chairman, John McFall, looked warmly at McKillop and asked him for a straight answer to his first question, in the following way: "Sir Tom, a straight answer – you come from Irvine!" McKillop answered happily: "Dreghorn actually, but near enough!" I can't have been the only Englishman watching this live on television to feel a spasm of profound irritation at this cosy moment of Scottish bonding.
Or perhaps I was: one of the more interesting aspects of this whole affair is that there has been no public anger directly addressing the fact that it precisely the two Scottish banks which taxpayers have had to prop up at a cost to date of £35bn. It is not Scottish bankers who are being subjected to abuse on all sides, but all bankers, regardless of whether they have required the taxpayers' support to remain in business.
Perhaps it is simply because Royal Bank of Scotland had some time ago rebranded itself as RBS and the Bank of Scotland as HBOS. These new corporate identities were achingly fashionable – following British Airways' adoption of "BA" and British Petroleum's renaming itself "BP" – and in dire circumstances their meaninglessness conveys a suddenly most useful obscurity. Or perhaps it is because the English – which is to their credit – have no particular animus against the Scots, and certainly nothing approaching the almost pathological suspicion which a very large number of Scots have of the English.
Imagine, for example, what might have been the case if the banks which had needed to be bailed out with the taxpayers' billions were not those run by Scots of fiercely meritocratic mien, but London-based concerns dominated by boards consisting entirely of pin-striped English ex-public schoolboys. I wonder if Gordon Brown, Alistair Darling and John McFall – or indeed the British public as a whole – would have been quite as understanding.
http://www.independent.co.uk/opinion/commentators/dominic-lawson/dominic-lawson-a-sorry-tale-of-scottish-shame-ndash-and-english-tolerance-1623819.html
Dominic Lawson: A sorry tale of Scottish shame – and English tolerance
Gargantuan folly has occurred North of the Border. And who is paying the costs?
Sometimes I wonder if hubris is a Gaelic word, rather than ancient Greek. It seems only yesterday that all of Scotland was in uproar over the takeover of HBOS by Lloyds TSB.
The leader of the Scottish National Party, Alex Salmond, sought to find ways to block the deal, in an attempt to avoid the humiliating capture by an English firm of a Scottish institution whose incorporation predated the Act of Union. The former bosses of the Royal Bank of Scotland and the Bank of Scotland attempted to mount a counter-bid, claiming that the English were getting the business on the cheap, with the connivance of the Government in London. Their argument looked ridiculous then – and now it looks positively insane.
As the full horror of HBOS's balance sheet gradually emerges, like the beast from 20,000 fathoms, the proper fury is entirely that of the Lloyds TSB shareholders, who now realise that the deal could end up forcing their own – hitherto perfectly sound and well-managed bank – into nationalisation. Gordon Brown took a lot of credit for the rushed merger – it would never have gone ahead if he had not personally guaranteed Lloyds TSB's chairman, Sir Victor Blank, that he would prevent the competition authorities from blocking the deal, as they assuredly would have done in normal circumstances. Now the more cynical among Lloyds TSB shareholders see the deal as a cunning way for a Scottish Prime Minister to get largely English private investors to pay the costs of more gargantuan financial folly from North of the Border.
Gordon Brown can protest in vain that he – and indeed his equally Scottish Chancellor, Alistair Darling – was denounced as "a traitor" by the Scottish Nationalists when he pushed the deal through. It is now his sorry fate to be despised by English and Scots alike. Note, by the way, that there was no such uproar in Scotland when the Westminster Government took a majority stake in RBS, thus saving the other of Edinburgh's banking behemoths from immediate liquidation.
Since over half of the Scottish economy is bankrolled directly by Westminster – amounting to a gigantic subsidy by English taxpayers – this arrangement could be seen as entirely normal, exciting neither outrage nor gratitude. It certainly helps to explain why Alex Salmond, himself a former chief economist of RBS, made no fuss about that particular bail-out. I think we can rule out embarrassment as a factor, although given that Mr Salmond declared a year ago, "The Scottish banks are among the most stable in the world", it would have been the natural human emotion in such circumstances.
Not the least of the ironies of the Caledonian debacle is that it was the takeover of the National Westminster Bank by RBS a decade ago which lies behind so much of what subsequently unfolded. RBS had in fact to fight a bitter battle with the Bank of Scotland for the control of NatWest. Both Scottish banks were much smaller than the English financial institution they wanted to buy, and both were openly dismissive of the fuddy-duddy "Captain Mainwaring" London management of NatWest who did not understand the modern style of banking, which believed in a much more 'dynamic' use of capital.
In the end Sir Fred Goodwin of RBS made a more convincing example of ruthlessly aggressive Scottish management – hence his nickname of Fred the Shred – and he took control of NatWest. The deal, in terms of its ability to generate maximum income from a relatively narrow capital base, was the model for the later disastrous bid for ABN Amro, which as we now know, was the final hubristic act resulting in Sir Fred's – and Edinburgh's – nemesis.
I say Edinburgh, because it was Scotland's financial establishment which backed Sir Fred Goodwin to the bitter end. None more so than the once cautious and reliable Standard Life, which, when questions were raised by some London-based investing institutions about the sanity of taking over the deeply troubled ABN Amro, put its entire corporate publicity machine behind Sir Fred. This – which may be no coincidence – is the same Standard Life which this week has reimbursed £100m to policy-holders whose pensions it had invested in so called "cash deposits" (supposedly the safest of all investments) which actually turned out to include toxic mortgage-backed securities.
You might think I am exaggerating the element of specifically Scottish swagger in all of this; I offer as partial evidence the fact that at RBS's annual shareholders meeting in 2007, the directors took their seats to the pumped-in sound of the theme music from Braveheart. By the time of the last annual general meeting, this nationalistic tub-thumping was suddenly omitted – just as well, since some of the disillusioned investors had begun to challenge the board over its tradition of being dominated by Scots: Sir Tom McKillop, RBS's chairman, mounted what was described by a reporter at that AGM as "a heroic defence". Very Braveheart, although some tax-payers might now be wishing that Sir Tom had been given the same treatment that William Wallace endured at the hands of the vengeful English, rather than allowed to resign without a scratch on his body.
The same people might have imagined that Sir Tom would receive the parliamentary equivalent of ceremonial disembowelment when last week he faced the inquisitors of the House of Commons Treasury Select Committee. The tone, however, was set at the outset when the Committee's chairman, John McFall, looked warmly at McKillop and asked him for a straight answer to his first question, in the following way: "Sir Tom, a straight answer – you come from Irvine!" McKillop answered happily: "Dreghorn actually, but near enough!" I can't have been the only Englishman watching this live on television to feel a spasm of profound irritation at this cosy moment of Scottish bonding.
Or perhaps I was: one of the more interesting aspects of this whole affair is that there has been no public anger directly addressing the fact that it precisely the two Scottish banks which taxpayers have had to prop up at a cost to date of £35bn. It is not Scottish bankers who are being subjected to abuse on all sides, but all bankers, regardless of whether they have required the taxpayers' support to remain in business.
Perhaps it is simply because Royal Bank of Scotland had some time ago rebranded itself as RBS and the Bank of Scotland as HBOS. These new corporate identities were achingly fashionable – following British Airways' adoption of "BA" and British Petroleum's renaming itself "BP" – and in dire circumstances their meaninglessness conveys a suddenly most useful obscurity. Or perhaps it is because the English – which is to their credit – have no particular animus against the Scots, and certainly nothing approaching the almost pathological suspicion which a very large number of Scots have of the English.
Imagine, for example, what might have been the case if the banks which had needed to be bailed out with the taxpayers' billions were not those run by Scots of fiercely meritocratic mien, but London-based concerns dominated by boards consisting entirely of pin-striped English ex-public schoolboys. I wonder if Gordon Brown, Alistair Darling and John McFall – or indeed the British public as a whole – would have been quite as understanding.
posted by erc @ 10:52 pm
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