Had a chance to speak to several people in or close to RBS middle management this weekend. They all told me one thing: that the sole aim of the place is to get back to the way things were pre-August 2007. Humpty Dumpty has to be put back together again.
They hate the idea.
They think it’s mad.
The directive comes from the top.
And the Treasury is doing nothing at all to stop it.
This is neglect of public duty on our politician’s part. And if RBS staff are angry what should the rest of us be?
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You’re absolutely right, it’s insane. So we re-inflate the bubble… and then it bursts again… and then RBS, etc, ask the taxpayer for another few hundred billion subsidy so they can carry on wrecking the economy.
If that happens my guess is that the politicians won’t be able to instigate another bail-out because there will be riots in the streets if they do… the public’s patience is stretched very thin as it is, and it will simply snap in that case. Which means the breakdown of the entire financial system, a new Depression, and then God knows what.
Do RBS really want the complete breakdown of Western civilisation? It’s a scary question to be asking.
“The directive comes from the top. And the Treasury is doing nothing at all to stop it.”
It is the Treasury issuing the directives. The Treasury wants it. In the aftermath of an excessive credit bubble, it was the government which started the calls for increased lending.
Governments tend to like credit bubbles, because governments only tend to think as far as the next election. Credit bubbles bring them short term benefits at the expense of long term costs that don’t fit into the time-frame that concerns them.
Two things, Paul:
1 How do you manage to answer a criticism of RBS with a criticism of the government?
2 What planet are you on?
nick james: “Two things, Paul: 1 How do you manage to answer a criticism of RBS with a criticism of the government?”
Given that the government has effective control of RBS, I don’t think it’s too much of a stretch. Do you?
“2 What planet are you on?”
A planet where there is a country with a Prime Minister who announced that he had, with a wave of his hand, ended the cycle of boom and bust and pushed policies that created a credit bubble which he clearly believed could have no negative consequences, as “bust” had been abolished. So convinced was he of his omnipotence, he continued to push policies to continue inflating the housing bubble (equity loans, shared equity, housing market renewal) even though it was obvious that the bubble was already massively over-inflated. Then, when the bubble inevitably burst, he tried to shirk all responsibility, re-iterated his belief in his own expertise and ordered the bubble to be re-inflated with more lending as quickly as possible.
I know, it sounds like a ridiculous scenario which couldn’t happen in the real world, but unfortunately that’s the planet I occupy.
1. He will have to speak for himself, but I suspect it might be something to do with the fact that the government owns 70% (soon to be 86%) of the share capital of RBS, appointed its senior management, and effectively controls the board and thus broad policies through UKFI.
2. Always an interesting question and worth asking because you never know what you will get as a reply, but probably the same one as you.
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