Rewarding Failure
Seee previous post dated 12 December 2011.
Yesterday the financial watchdog revealed that the head of the FSA at the time - Hector Sants - was handed a £144,000 bonus in the same year that RBS was allowed to buy the Dutch bank ABN AMRO.
A disastrous decision that brought RBS to its knees - a decision that was reviewed but not blocked by the FSA - and which triggered a £45 billion bail-out by the UK taxpayer.
Turns out that Hector Sants received the 'bonus' as part of his salary package - which also rose by 37% to £662,000 in 2007-2008 - the same year Northern Rock collapsed.
The cost of buying ABN AMRO was an eye-watering £50 billion - slightly more than the £45.5 billion required to save RBS from collapse - and prevent a run on other UK banks.
The FSA was set up by Gordon Brown - who had been acting as Labour chancellor for almost 10 years at that point - and was given the task of regulating all UK financial institutions including the banks.
So is it any wonder that the public is scathing - because no matter what went wrong - the people at the very top could not lose.
The reality is that the people who were supposed to be protecting the public interest - were stuffing their mouths with gold.
While the politicians who were running the whole show - took no responsibility for the fact that the FSA was asleep on the job - the watchdog didn't even bark never mind bite anyone!
Years later the truth comes out - but by that time people involved have scarpered - leaving the rest of us to pick up the pieces.
