Kate Steiner-Dicks
“Corporation: An ingenious device for obtaining profit without individual responsibility”--Ambrose Bierce, American journalist and author of the Devil’s Dictionary
It’s one of those quotes that resurfaces to your memory when you are scanning through the latest news reports of the recent $550m Goldman Sachs settlement (in connection with losses created by the collateralised debt obligation, Abacus 2007-ACI, created by Goldman on behalf of hedge fund Paulson & Co.).
As you can learn from our news section on page 3, RBS has won a large chunk of change through the Goldman settlement. But is RBS entitled to more?
Unlike many large financial scandals that serve as entertainment for FT and WSJ readers, this settlement involves the public interest taking into account that RBS is 87% state owned. Any settlement could have an impact on “our investment”.
Months before would RBS have easily paid over $841m to Goldman to settle a credit insurance claim (in this case credit insurance provided by partially RBS-owned bank ABN), and then have that amount handed over to the very hedge fund that would wipe out even more millions on its books? Some may argue that it’s comparing rotten apples to oranges, but in the end it would seem that the questionable veg man still pocketed the cash.
I guess I am frustrated that “corporations” at the best of times do not question who they do business with when they are dealing with other people’s money. Could you imagine if the tables were turned and British banks had to make such settlements? My stomach just turns at the thought.
Let’s endeavour for Britain to learn from the mistakes (every nation makes them) so that we can create the most efficient, transparent, robust and ultimately emulated banking system in the world.
Until then, I hope you get to put your feet up this summer with this month’s edition and consider some tips ranging from how to legally stop your credit card rate from going up (pg 1) to becoming a DIY pension investor (pg 18). |
