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- Banks, S&L's, Credit Unions
BANK ON THEM TURNING GOOD TO BAD
THE BANKER AND HIS BONUSES
Let me state at the outset that as a generic group, I dislike and mistrust BANKERS. This is a long held and deep seated view, having seen the less intelligent members of my class at Grammar School, leave to join that deity in the later 1950"s. In those days, my knowledge of Banking was severely limited, as I think was that of most ordinary folk. for whom the Bank was a place to put in your cash as a safer way of securing it than stuffing it under the floorboards. I recall my parents visiting the Bank weekly to deposit the takings from their shop and also writing cheques to pay for goods and services required to run the place. At that time, most people in ordinary life, used Banks for that purpose and ,in Business, to occasionally borrow funds to purchase Capital equipment etc. That was the only time that contact was made with the Branch Manager and pretty mundane seemed that role to me. Ideal for those with no adventure in them to work out their lives in the small Northern town of their birth, whilst establishing a comfortable, if not extravagant lifestyle. No wonder so many grew to replicate the jumped up pipsqueak of a specimen of human kind that was portrayed in that wonderful sit com, "DAD"S ARMY" Iin the 1980"s.
By that time I had developed my own relations with Banks, and to be fair they were not the norm at the outset. Graduating as a Teacher in 1962, I went straight to the school were I had secured a post to commence in September ,to work as a Supply Teacher for the part of June and then July, that ended the Academic year. I had worked out my financial requirements to take me up to the end of September, when my first pay cheque would arrive, but also needed a home for the supply money which would be paid at the end of June and July. A Bank account was an essential necessity. Accordingly, I presented myself at the main National Westminster Bank Branch in Gravesend Kent. At the Information Desk, I told the young Assistant, who turned out to be a Trainee Manager, that I wished to open an account. This was greeted with warm appreciation by the young chap who rushed to produce the required forms and began the formal process. All went swimmingly till he asked me how much I initially wished to DEPOSIT! I replied, "NIL BUT DO WANT TO BORROW SOME FROM YOU TILL THE END OF THE MONTH" As he took in what I had said, the colour drained from his face and he began to splutter incoherently, as he ventured to explain that this was not possible. At this point, I realised that a higher authority was needed and asked to see the Manager. The Trainee sped away, glad to be relieved of a tricky problem. Enter, Stage left said Manager and a tense conversation ensued with me presenting him with my income/expenditure for the remainder of the month and that I needed £11 to survive to be able to deposit my pay cheque. I further showed him my expected income till 65 years of age as AA Teacher and that I would be Banking somewhere for that length of time, but not with Nat West if the advance was not forthcoming. Eventually, I won the day and walked out with £11. As promised then on 6 June 1962, I repaid that loan on July 4 1962 and have never since, borrowed again from any Bank. Brought up in austere times, I had learned to save for the things I wished and avoided like the plague all forms of borrowing, save eventually for a mortgage. Maybe modern society, in these Banking created times of austerity, would do well to follow a similar model but Hades will freeze over before it does methinks.
Now the above is purely to describe the way in which I, and no doubt many others have regarded our High Street Banks, chiefly as rather dull and staid as well as frustrating at times. The old adage which refers to Banks as organisations that will lend you an umbrella as long as it is not raining, exemplifies the view that these are stable and trustworthy institutions, albeit dull and boring and administered by 5th year school leavers devoid of advanced Education. Then came the events, especially since 2008 that reveals that view is totally incorrect. It is simply the acceptable facade of Businesses that have3 turned their work into virtual Casinos and encouraged some of the worst aspects of human nature in their execution of activities. At the top of these trees the monkeys are totally different. A picture of the now British Prime Minister and his mates at Oxford tells a different story. Not for most of these guys careers in meaningful activity to benefit from their Oxford degrees. No sir! A load of these chaps and others like them appear now as "Investment Bankers", which basically means they gamble with the cash we deposit.
NOW GAMBLING HAS A FRISSON FOR SOME AND TO ADD TO THAT SENSE OF EXCITEMENT, THEY HAVE ADDED A FURTHER LEVEL TO ASSIST THEIR NEEDS.
Performance related pay is a good system, but all that is good can be turned and our brave boys have manipulated this to their own benefit. Demanding and receiving extreme salaries for working in the Casino, they also get a "BONUS" annually if they actually win. No problem with that subject to, if they lose they have their salaries cut! In a pigs eye they are. The bright boys in Casino Banking, who have brought the world it seems to its economic knees, play only in a "WIN, WIN" situation for themselves and thus turn a good principle to bad, whilst cocking a snook at the rest of us saddled with repaying for the problems they have created for us all.
Now, lest anyone thinks this is just an unfair and biased rant against Bankers, let me state here that I fully understand that a key principle of Banking is to invest monies deposited to generate further sums to be lent at proper interest rates to people with proper business plans etc. I was taught in Business that a Banker has but 2 concerns when considerig making a loan to a client.1. How is my interest to be paid. 2. How is my Capital to be repaid. Simply, even 5th year leavers can understand that surely ! However, those rules go by the board when the Banker has incentives to take unreasonable risks without be necessarily affected personally, save to make substantial bonuse if the gamble comes off. No problem if they were to use their own money, but not with that belonging rightfully to others.
Across the world, Bankers have abused the principles of Performance related pay to feather their own arrogant nests and those above them smile on benignly, for they too have to have exorbitant salaries to watch over them. Do we need these people. The City of London Bankers say it is essential, for otherwise, the best brains will go overseas. Well, if those brains are the ones who have created the current mess, them maybe we should help them to move as soon as possible and replace them with some of those dull 5th form leavers. They would understand that Performance related pay starts with a decent living salary, not one that funds a Champagne lifestyle. To get that, you have to perform wisely and understand that the job is Banking not Casino playing.
OF COURSETHIS WILL NOT HAPPEN FOR FROM THE BANK OF ENGLAND DOWN THEY CLOSE RANKS SUPPORTED BY THEIR ERSTWHILE CRONIES ON THE OTHER GRAVY TRAIN, NAMELY POLITICS.
The current crisis will be overcome, but not because of these people, though as quick as they were to seek to avoid blame for it, they will rise as one to claim the credit and even larger bonuses for doing what they should have done all along, simply treating the people who have deposited the funds they play with with respect and not the current contempt they have for anyone with a salary package of less than £250.000 per annum. Till then, all the rest of us can do is to wait for the next foul up to reveal itself and again require the ordinary people to pay for it as ever. Not the most encouraging thought on which to end is it?