Sack The Bankers And Clean Up The Debt Industry
In my travels across the web today a couple of articles attracted my attention. The first, from the BBC website which is reporting how Lorn Myners reacted to the board of RBS reporting that they might all resign en mass if the government, as the largest shareholder, insists they should not pay out £1.5 billion in bonus payments to their investment banking staff.
RBS are claiming it is their legal duty to act in the best interests of their shareholders and failing to pay out all these bonus payments might cause some of their staff to leave for better paid jobs. Vince Cable, the Liberal Democrat treasury spokesman was typically on the button when he said we should call their bluff.
It’s a shame the government didn’t let RBS go bust and simply buy the remnants for a penny. New contracts could have been put in place and all these bankers who expect to get million pound bonuses should have been grateful to keep a job at a minimum wage.
If the bank staff want to go then good, clear off. We will be better off without you. There are plenty of more than capable people who would be happy to do as good, if not better, a job at half the salary these people are on and not expect to get bonuses for doing the job they are paid for.
Let’s be honest. If we had dragged anyone off the street to run the banks over recent years they could not have done a worse job than these so called, masters of the universe.
The bonus culture in banking was a very significant cause, if not the main reason, the bankers nearly bankrupted the country. They still don’t get it. They still do not understand that they are lucky to have any job let alone a well paid one. They appear to think they are better than everyone else and should be given massive amounts of money because they are so superior. They are not.
You can argue that top rated footballers merit their massive rewards because they are the exception. They have skills that others could never match. There may be some bankers who have talents that are very rare but the majority of their work could be done by any number of bright people. The laws of supply and demand, the very laws of the market that these investment bankers rely on to make all their money, suggest that these people are seriously overvaluing themselves so they should resign and see what life is really like in the real world.
The Cruel And Heartless World Of Debt Collections
The second article I would draw your attention to was in the Independent and it was all about the debt industry, an industry only slightly removed from these same bankers who expect to get millions of pounds a year for doing a job.
The debt industry is booming as other industries and ordinary people struggle with the financial mess we find ourselves in. Most of the banks spent the last ten years trying to encourage everyone to take on more debt and now people are struggling those bankers, who earned so many bonuses for getting us into debt, are now crying because people are struggling to repay the money owed.
We all have a responsibility to repay our debts. We may well want to do everything we can to repay those debts but there are limits to anyones ability to do so and the people who encouraged us to use our credit cards, take out additional loans and remortgage our homes have a responsibility too.
Some would argue that what the banks did was akin to a publican encouraging an alcoholic to have a drink. It is not so far from the truth. The banks were eager to suggest we should visit them for a financial advice meeting and many people did. Many of those people were then treated to a sales pitch and ended up walking out of the bank having taken on a credit card they didn’t want or a loan they felt they hadn’t needed all thanks to the pressure selling of banks and bonuses paid to sales staff for signing customers up for loans and credit cards.
The banks behaved in a totally irresponsible way towards their customers and, as it turns out, to their shareholders and to the taxpayers. We all have to pay the price of their stupidity and greed and yet they still expect to receive million pound bonuses. They should be thankful they are not hanging from lamp posts after their treasonous behaviour. Fortunately we live in a moderate and fair society but they are taking advantage of our fairness and show no sign of losing their greedy self interested approach to life.
So we are now in a situation where there are many thousands, perhaps millions, of people who are seriously struggling with debts. The banks did the selling but we took on the loans and the credit cards and having enjoyed a spending spree lasting perhaps ten years we now have to find a way to pay our debts.
If you have the extra money to pay back the debts there is no problem. Pay them off and move on having, hopefully, learned some financial lessons. But, what about all the others who want to pay their debts but simply can’t afford to repay them at the present time.
The whole debt industry depends on making people who cannot afford to repay what they owe pay even more than the debt they already have. Banks, credit card companies, telephone companies and all types of other businesses sell on outstanding debts to debt collecting companies for pennies in the pound.
How can it be in the best interests of shareholders to sell a debt of perhaps £100 to another company for £30 when the customer wants to repay the full amount of the debt but needs time to spread the cost?
Once the debt has been sold on the debt collections company will demand the full outstanding debt from the original customer and will almost certainly add on additional charges and costs making the situation even more difficult for the customer to resolve.
Problems with one debt lead to difficulties with another and before long the situation is spiralling out of control and it then becomes a fight between different debt collection companies to get their money before anyone else does and before the customer goes bankrupt.
How can this scenario be good for anyone? It doesn’t help anyone except the debt collection agency who manage to successfully collect money for nothing. It isn’t money they were owed for goods or services they provided and it isn’t money they earned. They are the vultures circling the dying man in the desert.
The whole financial industry has become overgrown and sickly. It needs serious pruning right back to it’s roots and then careful training and guidance so it takes shape that is beneficial to society, to customers and to shareholders. It needs to show some appreciation for the taxpayers who have, unwillingly, become the host this parasitic industry required to enable them to survive.
In the meantime it would be in everyone’s interests if there was more support for individuals who are struggling with debt. Whatever the reasons behind the debt, it helps no-one, except the debt collection agencies, for them to be thrown out of their homes and become dependent on the state for housing and goodness knows what else. What they need is support in a way that allows them time to pay and a way of renegotiating ther debt burden.
Most people who are struggling with their debts do want to repay them in full. Honesty isn’t the problem here. The problem is the practical one of finding a way to pay and when the collections company adds an additional charge of maybe £200 on top of an outstanding debt and then demanding immediate payment, it is not going to help someone, who is already struggling to feed their family, pay their bills.
The financial industry would make more profit from helping struggling customers by renegotiating debts rather then selling debts on to debt collection agensices for pennies in the pound. It makes no sense, it is bad for shareholders.
If the government can bail out banks with billions of pounds because they were selfish, greedy and stupid, how come the struggling taxpayer is offered no support, no help and no assistance when that could be done for a few million pounds and save the country hundreds of millions in benefits and support in the future?
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