Punishing the Bankers: Peter Cummings punished for making loans – oh the irony
OOOOH, the irony, it’s just too exquisite.
So we’ve finally actually punished a banker for the mess that they created. Peter Cummings from HBOS:
Peter Cummings, the HBOS banker whose division lent billions of pounds to property developers, has been given a lifetime ban by the Financial Services Authority for his role in the banking crisis.
Cummings, who has also been fined £500,000, is the only former HBOS banker to be penalised by the City regulator as a result of the near-collapse of the bank which was rescued by Lloyds in September 2008 – and the highest profile banker to be punished since the financial crisis.
So we know what the problem is as the more froth mouthed have been telling us for years. Investment banking, too much trading, markets out of control, CDOs, CDS, not enough relationship banking and…..well, you know the litany. And we should solve this by separating the investment and commercial banks, tax the markets with the Robin Hood Tax and going back to a system where the bankers knew their clients.
You know, where they invested in long term relationships, not just did a deal and walked on to the next one.
All of which makes the punishment of Peter Cummings just too exquisitely ironic. For what he’s being punished for is making loans, not playing with derivatives or leaping about in markets. For making loans to companies that he had long term relationships with. To companies that he invested equity in as well as debt. None of his activities crossed the line between investment and commercial banking: it was all straight commercial stuff. Nothing would have been in the slightest affected by the Robin Hood nonsense.
In effect, Cummings was doing at the bank what all are crying out every bank should be doing. And we’re punishing him for it.
And ain’t that ironic?
Posted: 14th, September 2012 | In: Money Comment | TrackBack | Permalink
