Our BS

I’m sure I wasn’t alone in my annoyance this morning at waking up to news that five banks had been fined more than £1.1bn by the Financial Conduct Authority (FCA) for colluding in foreign exchange markets. 

Breaking down the scores on the doors, Citibank was fined £225.6m, HSBC £216.3m, JPMorgan Chase £222.2m, RBS £217m and UBS £233.8m, with the FCA accusing the banks of "imperilling market integrity".

The self-same institutions were also hit by penalties totalling almost £900m by the US regulator, the Commodity Futures Trading Commission. Negotiations with Barclays are apparently ongoing.

But it was the conduct of RBS which upset me most.

Let me quote you some more figures from the RBS website.  In the immediate aftermath of the 2008 financial crash, the British Government became the majority shareholder of RBS and now owns 63% of ordinary shares. Including an acquisition of B shares the following year, “the total economic ownership of the UK Government is currently 79% of the RBS Group.”

Or to put it another way, we – the British people – now own 79% of RBS.  And that’s why I’m not particularly thrilled that illegal practices have been carried out in our name.

Neither, indeed, am I pleased that the bank’s resources – our resources - have been further depleted by the fines (although the FCA penalties on all five banks will go to the Treasury with Chancellor George Osborne making a welcome commitment this morning that “these fines [will be] used for the wider public good.")

In a statement, RBS Chairman Philip Hampton said the bank was “reviewing the conduct of over 50 current and former members of trading staff around the world as well as dozens of supervisors and senior management responsible and accountable for this business.”  He added: “As part of that process, we have already placed six individuals into a disciplinary process, three of whom are currently suspended, pending further investigation.”

Forgive me for feeling underwhelmed, but I’m not convinced that the all-important 79% bloc of RBS shareholders will feel greatly reassured by that.