IT WOULD appear there is no banking rock under which there is not something deeply unpleasant lurking. What other conclusion can one reach after yesterday’s £391 million fine on RBS over its role in the Libor rate-fixing scandal?
This is an industry where lessons, it seems, are hard to learn.
The fine on RBS is £100m more than the one that last year led to the resignation of Bob Diamond as chief executive of Barclays, and it has resulted in the departure of RBS head of investment banking John Hourican in what industry insiders are describing as “a sacrificial offering”.
This raises a number of issues. Was such an obviously manipulative and self-serving practice as rate-fixing simply the responsibility of one man, or did others at a senior level in the bank condone or even encourage this behaviour? RBS says more than 20 staff have been disciplined or have left the business. Which begs the question – which ones remain, and in what positions?
RBS chairman Sir Philip Hampton yesterday said it was a “sad day” for the bank. There have been a number such sad days over the past six years of the RBS’s history, and the cumulative effect has been to stretch the public’s patience to breaking point.
Yet again the banking profession has shown itself bereft of an understanding of the mess it has left the country in, and lacking an appreciation of what change of attitude – and behaviour – is required to begin to regain the trust of the public.
Rarely a month goes by without a new indication of the sector’s failure to grasp the new realities. The recent attempt by Goldman Sachs to avoid its senior staff paying the highest rate of income tax was a particularly egregious example, and the lack of contrition by its senior managers is instructive.
The taxpayer still owns more than 80 per cent of RBS, and it is not unreasonable to expect that the bank operates to a level that its public shareholders can find acceptable. It is only right that this fine will come from RBS bankers’ bonuses – Chancellor George Osborne made great play of this yesterday, and rightly so.
If that leads to a flight of some RBS staff to other financial organisations, so be it, however regrettable any departures might be, and however much they may temporarily dent the bank’s performance. The moral peril of doing otherwise – letting the taxpayer foot the bill while bankers continue to collect their bonuses – is unthinkable. There is no alternative to this course of action – something that seems to be recognised by chief executive Stephen Hester.
He said yesterday that such moral blindness must be “a part of RBS’s past and not its future”. And he added: “We must be absolutely clear – this is not acceptable. The journey of recovering from its past legacy is not finished.”
That there is still a job of work to do on this front is remarkable, but that work must now redouble.
Fishing reform deserves support
IN SCOTLAND’S fishing communities, the EU’s Common Fisheries Policy has long been a source of anger and resentment. When tight limits were imposed on catches to preserve stocks, the impact on the Scottish fleet was deep, with many boats decommissioned. Fishermen frequently complained that other countries flouted the rules with impunity, and they condemned regulations that meant they had to throw dead fish back into the water .
So the first reaction to yesterday’s news that MEPs had voted in the European Parliament in favour of a wholesale reform of the CFP is that it is long overdue, after much irretrievable damage has been done. It remains to be seen if any reform, no matter how sensible, can dent the europhobia that past mistakes have engendered in Scotland’s fishing communities – especially in the North-east and the Northern Isles.
But the reform is welcome nonetheless. It is to be hoped the changes away from quotas and towards “maximum sustainable yield” will pan out, and the ending of the practice of “discards” – throwing dead fish back into the sea – is an eminently sensible start.
What any system needs is flexibility and adaptability, allowing the broad aims of conservation to be served while not tying up fishermen in mountains of red tape and forcing them into actions that served neither conservation nor fairness. The aim is that depleted fish stocks recover by 2020.
It makes sense for Scotland and the UK to give this reform full support, and to press other European Union partners to comply.
Only by preserving stocks can future generations benefit from the valuable bounty from our seas.