Wheatley Lambasts Outrageous PPI Mis-selling

Martin Wheatley, the CEO of the Financial Conduct Authority (FCA), is currently appearing before the Treasury Select Committee. He is less than impressed with the fallout from the PPI mis-selling scandal and the way that the banks are handling complaints.

Currently the FOS is upholding 90% of PPI mis-selling cases referred to it after they had been rejected by the banks.

Wheatley says it is "absolutely not acceptable" and that it is "outrageous" that the number upheld by the FOS is so high. He stated that the FCA has been looking into how banks handle complaints, as per the Telegraph:

"We have taken action and we will take more action and we will continue to look at how banks handle complaints. 

We've got two large investigations underway and have two cases where we have issued strong fines."

Sadly PPI mis-selling is but one of many areas where Britain's financial services industry mired itself in its own shit.

LIEBOR - The Essential Truth

There is much hoopla going on in the media about this afternoon's bunfight at the Treasury Select Committee hearing, where Bob Diamond will be the guest star.

All attention and focus (thanks to deft media manipulation by Barclays) is on the alleged phone call from Paul Tucker (Deputy Governor of The Bank of England) on 29 October 2008:

"Bob Diamond received a call from Paul Tucker, the Deputy Governor of the Bank of England. The substance of that call was captured by Bob Diamond via a note prepared at the time. A copy of that note is appended to this document; it was circulated to John Varley, then Barclays Chief Executive, and Jerry del Missier, then President of Barclays Capital.

Subsequent to the call, Bob Diamond relayed the contents of the conversation to Jerry del Missier. Bob Diamond did not believe he received an instruction from Paul Tucker or that he gave an instruction to Jerry del Missier. However Jerry del Missier concluded that an instruction had been passed down from the Bank of England not to keep LIBORs so high and he therefore passed down a direction to that effect to the submitters ."

This is all very well, and has given Barclays the veneer of an "excuse"; wherein it can imply that it was asked to fiddle the rates. It has also given the Tories an opportunity to unleash the hounds, and castigate various Labour ministers of the day.

However, let us not forget the essential truth, Barclays were fiddling the LIBOR rates long before the alleged phone call took place.

For why?

To make a profit for their own greedy ends, not to save the country or the bank from financial ruin.

Let us not forget that!

NatWest's Death March To Self Destruction

As we enter day 7 of NatWest's technical meltdown and its death march to self destruction, the hapless and hopeless bank has warned its 17 million customers that the problems may well last for a few more days.

Neither the customers nor the financial regulators are particularity impressed with NatWest's handling of this. Andrew Tyrie, the chairman of the Commons Treasury select committee, is quoted by the Telegraph:

 “It seems scarcely credible that something like this, which has caused problems for hundreds of thousands of people, could have gone on for so long. No doubt the committee will want a full explanation.” 

Still there is good news for the shareholders. The glitch has meant that the capital reserves of NatWest have been boosted and, even better, the bank made some short term profits by providing customers with an 0845 number (ie one that costs the customers money) to ring to complain (NatWest have relented and now provide a free number and will reimburse the costs of the calls).

All in all a shambles by anyone's standards!

King Rewrites History

Sir Mervyn King, Governor of The Bank of England, has stirred up a hornets nest after his recent BBC radio lecture in which he rewrote history and his/the Bank's role in the financial crisis.

Amongst other things, King said that the Bank would be very happy to co-operate with another inquiry into the collapse of Northern Rock (the bank that the Bank of England refused to bailout).

This willingness to co-operate rather took the breath away of Andew Tyrie, chairman of the Treasury Select Committee, who said that the Bank "should get on with it at the first available opportunity".

Others on the Select Committee expressed astonishment at the Governor's comments, given that the Committee has asked the Bank on numerous occasions to co-operate with an inquiry only to have their requests refused. The Bank remains the only member of the tri-partite system not to have published a review into its role in the crisis.