“Leadership is a privilege to better the lives of others. It is not an opportunity to satisfy personal greed." - Mwai Kibaki
Rachel Reeves is to encourage banks to “nudge” customers to consider investing their money in stocks and shares rather than safer savings accounts.
“Savers with cash in low-interest bank accounts will be contacted and encouraged to consider more lucrative investments, under Rachel Reeves’ plans to boost the economy and raise wealth." (Independent: 15/07/250
Jolly good. We all trust the banks don’t we? They would never give bad investment advice or do something criminal just to profit themselves would they?
Well, yes they would as it happens.
Although never convicted of criminal intent, Global Restructuring Group (GRG), an arm of the Royal Bank of Scotland, was accused of pushing viable small businesses into financial distress. Once distressed, GRG allegedly acquired assets at discounted rates or imposed punitive fees. Businesses claimed they were misled into restructuring deals that ultimately led to insolvency.
Another example are the senior managers at HBOS (before Lloyds’ acquisition) who were convicted of fraudulently advising businesses to use a consultancy firm that siphoned funds. Some businesses were left bankrupt, and assets were later absorbed or liquidated.
You just would not have wanted to put your life savings in a business that went bust due to the bad advice given by bankers.
Don’t forget the mis-selling of payment protection Insurance for which over £22 billion was paid out in compensation. Then there was Standard Chartered, fined £300 million for laundering money linked to Iran. Tesco Bank was made to pay £382 million in impairment charges due to accounting irregularities and mis-selling.
We all remember the 2008 financial crisis brought about by deregulation of the financial sector and the austerity measures introduced to bail out the greedy banks. Before this crisis, banker’s bonuses were designed to reward short-term gains, often at the expense of long-term stability. In short, the bankers were stuffing their trousers with loot as fast as they could, regardless of the long-term financial consequences for the rest of us.
Re-regulation was introduced after the 2008 financial crash to curb the insatiable greed of bankers. Despite capping banker’s bonuses in the aftermath of the crisis, these caps were removed on October 2023. This marked the end of a decade-long restriction that limited bonuses to 100% of fixed pay, or200% with shareholder approval, for material risk takers in banks, building societies, and PRA-designated investment firms.
Poor bankers! Fancy having your bonus restricted to 100% of final salary! Thank goodness those restrictions have now been lifted and they can get back to making more and more money for themselves.
In 2024 alone, the UK’s top banks paid out £7.1 billion in bonuses. HSBC awarded a single “material risk taker” £16 million. Barclays paid one trader £14 million, with 762 staff earning over £1 million each. These bonuses come out of profits. Put another way, bonuses come out of the pockets of the consumers. And the banks, despite the “cost of living crisis" are making huge profits at the expense of the rest of us.
The top five UK banks made £51.6 billion profit. in 2023 and £45 billion profit in 2024. The expectancy for 2025 is an increase in profits of 14% to a massive £52.4 billion. Given the banks track record of greed, mis-selling, money- laundering and fraud I wouldn’t trust them to invest my savings. Will you?
