As The Guardian has noted this morning:
NatWest Group has agreed to buy back shares worth £1.2bn from the UK government, in a transaction that will mean the bank is majority private-owned for the first time since it was bailed out during the financial crisis.
The bank, formerly known as Royal Bank of Scotland (RBS), said it had agreed to make an off-market purchase of 550m shares, or 4.91% of its share capital, from HM Treasury at Friday's closing price of 220.5p.
I cannot help but reflect on the wasted opportunity implicit in this report.
The Royal Bank of Scotland (as NatWest was) could have been the UK's regional green bank of reconstruction. The gains would have been enormous.
It could have been the Covid bank, tasked with minimising fraud rather than maximising banker gain.
It could have been a green savings bank.
It could have helped deliver an integrated economic strategy.
Instead the only plan was to give it back to bankers to play with as they will, whatever the cost to society, so that the Tories could pretend everything was ‘back to normal'.
The Tories really are the masters of wasted opportunities, all in pursuit of private gain for a few.
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The disaster that befell RBS began in 1986: with Big Bang. It destroyed the three hundred year history of a highly respected, dependable, independent banking system in Scotland, free of the predatory practices in London; and, overnight destroyed the Scottish banking system, and turned the great Scottish banks over to the City of London, and immediate targets for takeover. There were only two ways for the Scottish banks to respond, and neither were palatable. They could sell themselves off fast, or – no better – become predators themselves. Bank of Scotland audaciously bid for NatWest, but was trumped by RBS outbidding it. Bank of Scotland immediately became prey rather than predator, and RBS-NatWest grew like topsy.
It all ended very, very badly; but it was all a perfectly natural outcome of the folly that was Big Bang. The Crash in 2007-8 reflected the same deep folly of 1986. What is astonishing is that Scottish Conservatives have never owned up to their utter folly and incompetence in failing to stand up for Scottish Banking. It was all to much for the parochial nonentities that have consistently failed Scotland; and are still doing so today.
In Germany there is a huge system of local banks and they understand that their role is to serve the needs of the real economy. These two features (local and service oriented) are linked and have delivered stable financing for small and medium sized businesses all across the country.
I am unfamiliar with how things were in Scotland prior to the grand ambitions of Fred Goodwin but in Germany I do see a system that is derided as inefficient, fragmented etc. – criticisms that have some truth – but delivering what banks are supposed to deliver.
We should take note.
Indeed.
It may be difficult and slow (and meet opposition) to create of a new bank/institution for any of the single things that you list…. but it is amazing how handy it is to have a bank/institution ready and able to be re-purposed to suit current needs.
Indeed, it is that “handiness” that is so dangerous to existing private sector players – heaven forbid that a state actor should elbow their snouts out the trough.
To your list I would add a hook up with the Post Office to recreate Giro Bank that would help large sections of the country that are becoming “un-banked”.
Agreed – I knew I forgot something
In the Scottish Currency Group proposals we advocate the adoption of a Canadian banking / regulation model for Scotland. The Canadian model is in fact the 19th century Scottish model, so this would just bring things home. For example, takeovers and mergers of large banks would be prohibited. Senior management would have to be ‘professional’ in that they would need to be chartered bankers. Indemnities would be outlawed. For example all new Directors of RBS Group were immediately given an indemnity against everything by the company. So even if they had been prosecuted in 2008 the fines would have been paid by the bank (and thus the state). So Directors could be held personally liable for misbehaviour and incompetence. They might be required to lodge performance bonds (as happened in the 19th c in Scotland) which would be forfeit in the event of financial loss or failure of the bank. We want to use the Post Office to provide basic banking services to all those that want them (and don’t get them from the current banks). We want more regionally based / community or mutually owned institutions such as credit unions or on the German Sparkasse model. The SNIB needs to be expanded hugely, linking to these local institutions, to support investment in business, local infrastructure and the Green New Deal.
The Post Office is not a good model for corporate governance in Scotland, for reasons too obvious, surely to rehearse here. I understand the logic, and the appeal of the reputation of the old Post Office (long gone), to which I assume your case appeals: but NOT this Post Office; not now, not ever.
I may have missed something, but what happened to this?
Just another Tory lie?
https://www.theguardian.com/environment/2020/jul/15/uk-government-planning-new-green-investment-bank
UK government planning new green investment bank.
The government sold the UK’s original Green Investment Bank to Australian bank Macquarie in 2017, only five years after it was formed, in a controversial deal dubbed “deeply regrettable” and “politically dubious” by critics of the sale.
Same old Tories.