This was happening as recently as last September while the banks were busy apologising for cheating small businesses over Libor fixing.
Over the past 25 years or so our banks have been rocked by one scandal after another. If you drill down, one thing lies at the heart of it – the bonus culture.
Top bankers – and sadly others from the financial world – berate us with the dogma that huge salaries and big bonuses are necessary to attract the top talent.
But it would be more accurate to say that big bonuses and mega salaries merely attract the greediest; those most motivated by financial gain. So should we be surprised when they also turn out to be so easily corruptible?
The top talent in our society are not working in banks. They are performing life-saving operations, building businesses, investigating the origins of the universe or spending hours in laboratories searching for the cures to diseases.
Some work for a pittance or for charities helping the sick and impoverished in faraway countries or war zones.
Most will never earn as much as the bankers who cheat us on exchange rates.
And none will be motivated by the sniff of a bonus or the opportunity to make a financial gain by cheating their clients.
Look at the type of ‘talent’ the bonus culture has attracted, whether it be in investment banking or in high street branches.
It is the sort that cheats on interest rates, fiddles small businesses on Libor lending, mis-sells insurance, flogs inappropriate investments to elderly people or sells premium bank accounts to those who do not need them.
While having the gall to tell us to ‘stop focusing on the past, move on,’ they continued to rip off customers.
I think it is safe to say that there is not an adult in the country who has not at some stage suffered from the underhand practices of our banks and the corrupt culture that has festered within them.
A generation of bankers has been indoctrinated by a creed of greed, and they and we are still reaping the consequences.
Are our banks inherently corrupt? On the evidence it would be hard to argue against it.
Are our banks our banks inherently corrupt? On the evidence it would be hard to argue against it._________________________________________________________________________________
A tax on aspiration
As Baroness Altmann sits in her pension minister’s office she might like to consider that the thing investors need is confidence that the government will never again change the rules to their disadvantage.
Peter Emery of Emery (IFA) has reminded me of pension mortgages which were briefly fashionable about 25 years ago chiefly because of the potential tax benefits.
He has a client who took one expecting to use tax-free cash to pay off his mortgage at age 50. At a stroke the age was raised to 55 and he faced paying another five years’ interest.
Then there is the lifetime limit on pensions.
When Isas were announced, millionaire paymaster general Geoffrey Robinson planned to hobble them with a £50,000 lifetime investment limit.
I recall Margaret Stone, then editor of Money Mail, storming into the office declaring: “We have to get rid of that limit.” She spearheaded a campaign which resulted in rapid back-tracking and the lifetime limit was buried, never to be resurrected.
Yet on pensions, which are a more fundamental component of long-term saving, we are saddled with a lifetime limit.
This is a tax on aspiration and on intelligent investment. It should not just be raised, it should be abolished.
And this could be done hand in hand with the likely limitations in inbound tax relief, which is one further change I really cannot see us avoiding.
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When will FCA get tough on banks?
The £290,344 fine handed down to Paul Reynolds for his behaviour while at Aspire Personal Finance shows that the FCA is willing to come down heavily on individuals who cheat or mislead their clients.
So how, in the light of this, should we view the £285m fine imposed by the City watchdog on Barclays for exchange rate manipulation? It is dwarfed by the £1.25bn imposed by the US regulator.
And it is around a tenth of its £2.26bn 2014 pre-tax profits.
I am in no way defending Reynolds or suggesting his fine should have been smaller, but it is hard to avoid the feeling that the FCA remains reluctant to impose agonisingly painful fines on banks.
Tony Hazell writes for the Daily Mail’s Money Mail section. He can be contacted at t.hazell@gmail.com.
