You cannot make this up. It is hard to believe but it is true. The industry is in distress. Many banks could have died. They gutted themselves and the economy in the process. Nearly so, in some countries and actually so in others. In Britain, banks are thrown a lifeline and there is a cost to the lifeline. A bank manipulates the charge on that lifeline so that it pays less! This is what Lloyd’s Bank did!! Some chutzpah!!! Read about it here.
I am really wondering – lest some think I am throwing mud – how this is thought of, approved (or executed without approval?) and reported? Or, does it go completely unreported and untraced? Hard to believe. What is really going on in the people’s minds who come up with such brilliant ideas? To bite the hand that feeds them and revives them from death? That must be an extraordinary moral fibre, so to speak.
Today, I received links to two blog posts from a person who knows a thing or two about banks and their conduct. The Posner blog post was embedded in the NY Times blog post. But, it is worth highlighting the Posner blog post separately as the sender did. You can read them here and here.
This news-item in FT on the New York Fed pressing banks hard on ethics has a line that says it all:
Fed officials were surprised that some of that reported behaviour occurred after the 2008 crisis, leading them to believe bankers had not curbed their poor conduct.
Included in the article is the link to another article that notes New York Fed’s displeasure at Deutsche Bank’s regulatory filings [Link]
There is another article that carries a pithy comment from the Head of the ‘Financial Conduct Authority’ in the UK:
Martin Wheatley, the head of the Financial Conduct Authority, said the sector’s capacity to “constantly surprise with bad conduct” was alarming, ………..[Link]
Banks were sending letters to clients who were in arrears on fake letter-heads of law firms.