So RBS, HBOS and Lloyds are falling into partial sate control today: give it a week or two and they will be nationalised. I don't believe Barclays will succeed with its plans.
But the really important news is that the government is taking powers to appoint non-execs. They have to. More than that: those non-execs have to be tough enough not to observe, but to impose strategy. If they are ignored then nationalisation has to follow. The era of the banker as we have known it is over, which is what worries me about the possible appointment of Stephen Hester to RBS: the man embodies all the wrong messages about banking and cannot carry public confidence with him as a result.
But the right moves have begun, the markets have reacted positively (although I place little store in that for now) but what we really need to know is that a new era in banking has begun. On that the jury is still out, and the public are going to want a lot of reassurance before they decide this is money properly spent.
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Richard,
Three cheers for Barclays at least attempting to stay off the public teet.
I saw on CNBC this morning the gents talking about the possibility of more “directed lending” being a consequence of state ownership. Isn’t “directed lending” what helped kick all this off (Fannie & Freddie)?
As with most state-ownership of commerce, this will ultimately be a failure years down the road.
It’s Barclays that will fail
Barclays was and is the big UK bank that is most involved in structured finance – complex financing schemes, often cross border and often exploitative in taxpaying (or more correctly tax-not-paying) terms. The cynics amongst you might be wondering if the reason Barclays is not seeking public finance is the fear that its activities in this area (and the associated stratospheric bonuses for its senior employees) might have been subject to unwelcome state scrutiny and curtailment?
Or could these facts be, in some way, connected?
or perhaps Barclays is able to sort out its own future – whatever the doommongers might think!