Morning:
10°c
HEY, what's £100 billion between friends? We've entered a mad parallel universe where in our daily lives we're confronted with the fallout of recession, of people close to us losing their jobs, familiar shops putting up the shutters, of supermarkets advertising “credit crunch discounts”.
As we go about our struggle, a group of bankers bowls up to the Treasury, talks about £500 billion and walks off with a chit for £600 billion. Oh, and one of those who got us into this mess is picking up a pension of £650,000 a year aged 50.
When I last met Sir Fred Goodwin he was a whippet of a man, keen on his fitness and cautious about what he ate and drank (if only he'd been more careful with Royal Bank of Scotland's cash). He might have a good 40 years left in him. So you do the maths — and weep and gnash your teeth.
While Fred “the Shred” is left to wander the fairways of Eastern Scotland, the rest of us are left with the detritus he and his colleagues have left behind.
There, as with his retirement pot (I make it £26 million if he gets to 90), the numbers are mind-boggling. Time was when £1 million meant something. Then it was £100 million, then £1 billion. Now, Alistair Darling and his Treasury team are signing off a rescue package worth £600 billion. It was £500 billion but that was a few days ago. Just to make sure he's got the bases covered, the Chancellor has raised the taxpayers' potential liability by another £100 billion.
What should have happened, it is now all too obvious, is that RBS and its badly-behaved Scottish pal, HBOS, were taken over by the state. That way we would have been left with a reasonably healthy bank on the High Street, Lloyds TSB, operating alongside the still functioning Barclays and HSBC.
We would have also avoided this nationalisation by stealth and the horrible thought that even now we're not at the end. We started off, don't forget, with the Prime Minister saving the world with an injection of £37 billion. He was only 95 per cent wrong, give or take, and what is required today is a guarantee of £600 billion. In return for our generosity, the two banks, RBS and Lloyds Banking Group that now includes HBOS, have agreed to provide extra loans worth
£40 billion.
That's the figure that matters to us now — the one that might begin to restore confidence, to enable the paralysed property market and businesses to move forward.
There is another one. Goodwin's pension. Side by side they stand: £600 billion and £650,000. They're almost symmetrical. They both cause intense anguish. Hopefully, they both represent the end, in their different ways: the final possible bill for the taxpayer and the conclusive proof of the personal greed at the heart of a system that had gone terribly wrong.
Reader views (1)
Of course it is not the final bill and what has hope got to do with it?
The bank is bust.
Even dodgy bankers are talking a 5 year turnaround, so its hardly profits next year.
Its business model is a failure, the same managers on the same contracts are still there.
- Alan, Llandrindod Wells, 26/02/2009 11:52
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