OK, it’s time to build a new way of measuring anger with the banks, so today sees the launch of the Finanser’s Rage Gauge.
Why do this today?
Because the heat of anger on the industry varies day-by-day, month-by-month.
There was shock and awe back in September 2008, then shock and anger in January 2009 as TARP and bailouts began. This increased to pure livid rage when bonuses were being paid at the end of 2009, on the back of these losses.
That rage stayed for much of early 2010, but then dissipated as other things took over ... such as the 2010 World Cup.
However, it’s back up to fever pitch again as the FSA publishes a report blaming no-one for the disastrous takeover of ABN AMRO by Royal Bank of Scotland.
According to journalist Ian Fraser, this is down to the FSA’s own self-interests and their use of Pricewaterhouse Coopers (PwC) to sham up in the investigation:
I was gobsmacked this morning to discover that the Financial Services Authority, following a supposedly independent inquiry by accountancy firm PricewaterhouseCoopers, has “closed” its inquiry into Royal Bank of Scotland and exonerated the bank’s entire board. I think that the regulator — which is living on borrowed time following its abject failure to regulate the finance sector in 2000-08 — will come to regret this feeble and wholly unconvincing attempt at a cover up.
I take Ian's comments seriously as he's just spent over a year investigating the demise of RBS and Sir Fred's reputation for a BBC programme to be aired in the near future.
On the other side of the pond, the Fed has just said how bailout funds were used, and that has kicked up a storm over there, especially as billions went straight into the pockets of several hedge funds:
The US Federal Reserve lent billions of dollars to hedge funds as part of its emergency liquidity programme during the financial crisis, data released by the central bank show. According to Fed data, $71bn of loans were made through its term asset-backed securities loan facility (Talf) mostly to non-bank institutions. They included hedge funds run by managers including FrontPoint, Magnetar, and Tricadia, many of which reaped handsome rewards from the collapse of the housing market.
Behind all of this is the rage over bonuses that never goes away as illustrated by a fascinating report published this week by the Council of International Investors on Wall Street pay and compensation (35 page pdf).
According to Paul Hodgson, the report’s author: “More vigorous federal oversight of Wall Street does not appear to have changed compensation on the Street for the better.”
Is that a problem?
Absolutely, as “the lack of long-term performance measurement on Wall Street and high absolute levels of compensation likely helped to fuel excessive risk-taking.”
And that is still the case today.
To top it all off, in terms of antibank sentiments, someone sent me a link to this song today [NSFW]...
... not nice.
So, in order to gauge the rage, feel free to add your vote below:
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...