{"id":5044,"date":"2009-10-09T09:25:42","date_gmt":"2009-10-09T07:25:42","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=5044"},"modified":"2009-10-09T09:28:34","modified_gmt":"2009-10-09T07:28:34","slug":"banks-dont-give-a-toss-about-shareholders","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2009\/10\/09\/banks-dont-give-a-toss-about-shareholders\/","title":{"rendered":"Banks don’t give a toss about shareholders"},"content":{"rendered":"

FT.com \/ Companies \/ Banks - RBS and Lloyds loan levels probed<\/a>.<\/p>\n

The government is probing whether Royal Bank of Scotland<\/a><\/strong> and Lloyds<\/a><\/strong> are failing to meet officially mandated lending targets by deliberately pricing loans to small and medium-sized businesses at artificially high levels.<\/p>\n

“We don’t want them to make uneconomic loans but our research suggests they may be pricing credit at unrealistic levels,” said one person close to the government. In a sign Whitehall is tightening the screws on the two banks it part owns, the government has been scrutinising the banks’ loan pricing mechanisms over the past two weeks.<\/p>\n

“They are giving us a bloody hard time,” said one banker.<\/p><\/blockquote>\n

These things to say:<\/p>\n

a) I suspect this is happening<\/p>\n

b) It shows why passive ownership is the wrong model for these banks<\/p>\n

c) It shows why they should not be returned to full private ownership but be forced to come into line under state ownership<\/p>\n

d) This blows apart the theory that companies act in the interests of their shareholders: here they are specifically acting against them<\/p>\n

e) This is why the directors of UKFI <\/a> need to be changed - bankers can't deliver the required changes<\/p>\n

f) This is why we need a new 'People's Bank'<\/p>\n

To put it another way: the banking model remains broken and unfit for purpose. When will we learn that, and take action?<\/p>\n","protected":false},"excerpt":{"rendered":"

FT.com \/ Companies \/ Banks – RBS and Lloyds loan levels probed. The government is probing whether Royal Bank of Scotland and Lloyds are failing
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