A labourer is worthy of his hire

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The Royal Bank of Scotland recently planned to reward its chief incompetents with grossly obscene bonuses. The Government stepped in to block the idea. Now they’ll have to content themselves with averagely obscene bonuses.

There was an outcry, of course. The predictable claims were made that, if they were not sufficiently bribed, these high-flyers would take their expertise elsewhere. It’s a frightening thought. It cost me several sleepless nights.

They could desert us, and take their skills and knowledge to another country. How would we manage? We could only descend into chaos, while their new hosts would stride forward onto the sunlit uplands of peace and prosperity.

There’s a contradiction at the heart of all this self-serving nonsense. The bankers insist that they need vast remuneration because of their invaluable contribution to the well-being of the nation. They try to persuade us that they have rare and special skills.

On the other hand, they are insulated from any backlash against their shady and immoral behaviour by making the diametrically opposite claim. It’s almost impossible for individuals who have been damaged by banks to get any redress. Why? Because the Law considers that bankers have no special skills at all. For this reason, they are no more answerable to you for giving bad advice than the man down the pub. Bankers readily embrace this insult to their financial acumen.

The Law considers that you give your money to a bank at your own risk. The same applies to acting on your bank’s advice. This isn’t just my jaundiced view. You can read the judgement in ‘Foley vs Hill’ in the related articles below.

If an Independent Financial Adviser gives you bad advice, the FCA will make sure that you are reimbursed, even if it bankrupts the Adviser. This does not apply to banks. They can give dreadful advice, even combined with threats and coercion to compel you to act on it. Any damage that you suffer as a result is nothing to do with them. It’s your own fault for trusting them.

Now you can see why it’s such an uphill battle to persuade your bank, or the Ombudsman, that you have had a product mis-sold to you, or that the bank has caused you a loss in any other way.

I understand that these problems mainly apply to retail banking, and the truly eye-watering bonuses are paid to investment bankers, but the principle still holds. The same sense of entitlement, and lack of accountability, perfuses every part of these organisations.

It’s a paradox. We must allow bankers to put themselves before customers and shareholders. If we don’t, they will take their esoteric abilities elsewhere, the banks will fail and we will all starve. At the same time, if anyone should try to hold them to account for their actions they will shelter behind the fact that the Law sees them as no more than spivs.

Where’s Lewis Carroll when you need him?

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