• First establish a monster retail bank by amalgamating several banks across the United Kingdom. You call it the Royal Bank of Scotland. Sounds so wonderfully stable. Three magnificent words, all heralding financial probity. Even the dark blue logo gave the impression your money would be safe for a thousand years. Every main street in every town had a branch. In every branch smart young girls waiting to pounce on you with financial advice. For they had ‘done the course’. They had a diploma. Of course, closer examination would reveal there was no Captain Mainwairing figure in the background; they had been ‘shredded’ long ago with their out-of-date banking exam qualifications and old world approach to money.
The grande fromage at the top was good old Fred. Top dude in the banking world, working lad made good, sharp suited and polished booted, he was the face of modern banking. So popular was he with his political cronies, they persuaded her Majesty to dub this confidence trickster ‘Sir’ Fred.
All went well as Sir Fred expanded his ‘book’ by lending to all and sundry under the fractional reserve banking system money his bank did not have. So when people wanted their deposits back, surprise surprise, he had, dare we say, shredded it.
Does he go to prison? No, his political chums bail out his bank with tax payers’ money. So he retires to France on a pension of half a million per year courtesy of poor old Mrs Snooks in Acacia Avenue, who is trying to struggle by on a £100 per week pension.
Now the politicians own a knackered bank at the cost of billions. They have to find another banker (or ?anker) to fill the slot. Of course he is brilliant and the international going rate is £2 million per year -- chicken feed actually in the world of banking. The politicians of course are all dismayed. This does not look good on telly. Terror struck. The bankers forego their million pound bonus -- well at least this time around.
Mrs Snooks cannot even imagine a million pounds. Her son in law cannot get a loan for his small business, and those rock solid shares she had in RBS have gone down by 40%. Perhaps because the bank is now only lending to the government with money printed by the government. Where are the regulators who presided over this shambles? Step forward, Hector Sants. What have you to say Hector? “Very very sorry”. Oh, ok then, time to promote you to deputy governor at the Bank of England.
So what is the private word at White’s club amongst the great and the good? Knighthoods all round.