Thursday, 13 September 2012

Ego unbounded and unbent- Peter Cummings

It is very lucky today that I am going to work early enough to avoid breakfast; otherwise on reading the paper I may have choked this from the Telegraph:

"In a statement Mr Cummings said he rejected the FSA's findings but would not be appealing the fine.
He said: "Many people must bear collective responsibility for what happened, including governments and regulators as well as the boards of the banks themselves. But the fact that I am the only individual from HBOS to face investigation defies comprehension.
"The decision to single me out for investigation is even more grotesque given that even the FSA has to admit in its notice that other senior people were involved in the critical decisions for which I am taken to task. This is tokenism at its most sinister, and has made it feel throughout like institutional oppression."

Poor Mr Cummings, responsible in the main for signing off dodgy loans with markers like 'approved for business development purposes' when the Credit teams at HBOS had come back saying not to make the loans as they were too risky. Mr Cummings, who indulged in the ultimate 'pig and pork' banking whereby you lend equity and debt (senior and mezzanine) to a client who if they go belly up you will be guaranteed to be over-exposed and take a massive loss. Real banking 101 stuff. Lo and behold, HBOS lost so much money in 2008 a Government rescue via Lloyds was the only way out. Lloyds has not recovered, still writing off billions in losses on real estate loans, of which almost the whole book came from HBOS Corporate Banking wherein Mr Cummings was the boss.   Of course, he wants to blame regulators (who could have sacked him) or Politicians (who could have given backbone to the regulator) - but no one made him sign-off on these loans.   By my guesstimation he has ended up costing taxpayers a bailout of around £20 billion. A ban from working in the City and a fine is getting of lightly - in the US he would be looking at a long stretch, in China possibly the death penalty.   I generally am happy with the Government proposed reforms to the banking system, they will make it safer - but Mr Cummings did not do anything criminal under current or proposed laws. This should change, if it were me he would be done for treason.


measured said...

But My Cummings is not without a brain*, claiming the FSA draft the Charges, present the evidence and preside over conviction.

The ECHR would have none of this, especially if he claims he has been hounded by the FSA for years and was persecuted. That would shame the government.

* You might think so in the decisions he made and clearances he gave, but that was pure self interest talking. Let's hope he doesn't now qualify for legal aid.

CityUnslicker said...

he could at least accept his punishment with a bit of humility and disappear, al la Goodwin.

Graeme said...

the only thing is that we are now waiting for the next round of bank stu[pidity - enowment policies, payment protection insurance, insane real estate lending.....I reckon it will be equity release schemes. All those oldies waiting ever-longer to claim their pensions and the man from the bank comes round to offer a nice tidy equity release scheme on their over-valued house.

dearieme said...

I always enjoy the way that, in their pomp, such creeps argue that they must be paid gazillions because of the very heavy burden of responsibilty they carry, and then, poof!, when the shit-fan collision occurs, it turns out that they weren't really responsible after all. Poor babies.

Sebastian Weetabix said...

If there was any justice he'd be arraigned before the bar of the House and banged up for life, all his assets forfeit. That would concentrate what passes for bankster's minds.

Anonymous said...

CU I whole heartedly agree with you. He was supposed to be senior management not a lowly clerk at the counter, he was responsible for the lending policy of HBOS, therefore the blame should stop there, the trick in banking is to lend to trustworthy customers who will eventually pay back the capital and paying the interest on the loan at intervals. This guy probably thought we will lend to any likely lad/lass who comes through the door. Lending can go bad with a well managed company, demand falls, customers not paying on time or demanding that their period of credit should be extended, list goes on, but this man while obeying the rules of the law did not obey the spirit of the law.

Mark In Mayenne said...

Mr Cummings' comments seem to me to be along the lines of "there were plenty of other people involved in this and they should all take the rap" Sentiments with which, if true, I heartily concur.