Archive

Posts Tagged ‘pension fund managers’

Until Bankers and those within in the City regain some sense of what is right and wrong, Government must intervene so that the many in the world outside do not continue to suffer because of the profit hungry few left within

March 21, 2013 Leave a comment

images (52)The Banking Sector has become an object of hate for many. The accepted perception is that it equates to a world of greed; that it represents all of the bad things that we associate with money in its worst form and that the Sector is immune from the impact of its own actions; a fact demonstrated only too well when private Banks are bailed out with Public Money and bankers get bonuses even when the businesses under their control are failing.

Recent headlines and the role of bankers in the financial crisis and Libor scandal demonstrate a clear need for real and meaningful reform, even before the impact from the domino-effect of unethical practices is considered upon our lives elsewhere.

With Finance and the role that Banks play being so important within our lives, bankers can no longer consider banking services to be ‘products’, as it has never been a ‘product’ that they are providing.

Services are themselves measured by the direct and indirect impact of customer ‘experience’ and the physical risk to all others, and the Banks must now begin considering this in the same way that any other service industry is by its nature required to do so.

There is nothing truer than the phrase ‘money talks’. But the Banks and Financial Sector have failed to take a long view of their actions and now Government must legislate to provide a Regulatory Framework which allows profitability, but does not do so without consideration of unnecessary impacts and the unacknowledged consequences for businesses and individuals within the wider economy.

Here are a few thoughts:

RBS (Royal Bank of Scotland)

In response to the Banking Collapse, the Government at the time provided money to a number of the well-known Banks to prevent their closure, primarily because of the risk to the money that we all have invested in them.

One of the Banks which was ‘bailed out’ was RBS and this Bank is now effectively ‘public owned’.

Recent talk in the media suggests that the Government is now looking to sell off the Bank. However, with a significant need for a Bank which is not profit, but rather service-led, and can therefore take a more altruistic approach to lending and the provision of the banking services that it provides, Government should now take the opportunity it has to provide a ‘peoples bank’.

By doing so, they can provide the options for everyone that other Banks and Financiers are not prepared to provide such as ‘payday loans’ and higher risk start-up lending without unreasonable levels of interest or surety being required.

This will surely help the economy to progress forward by providing lending and support to small business in a way that other Government-backed schemes simply fail to provide.

A publicly-owned, people-centric bank would provide a cornerstone to people, to business and to Public Services alike when run only with the end-user and sustainability in mind. This is what Britain needs.

Credit Rating Agencies

In a recent blog, I talked about the unrealistic level of influence that Credit Rating Agencies now have upon us all.

Ironically, the UK had its Triple A Rating downgraded soon afterwards and Politicians really must now consider the influence that 3rd parties have in dictating the levels of interest that people pay to borrow from lenders, or indeed if they will be considered ‘credit worthy’ in the first place.

Government lending aside, nobody would sensibly deny that different levels of lending risk exist depending upon the financial history of an individual or business.

But it is often poorly managed lending which contributes to higher risks in the first place and improved regulation must therefore be used to restrict this process.

Through the Bank of England, the Government currently defers the setting of the base interest rate in a way which reflects needs in the wider market. All lending should reflect this rate; be realistic; be proportional and Government should drive Regulation to support this.

Pension Fund Management

Pension Funds are significant Shareholders of well known PLC’s across the Globe.

In the UK, their influence is felt by many of us each and every day through the profits we provide to Companies such as the big Supermarkets and Utility Companies, which is reflected in what few would disagree is a continual and disproportionate rise in the Cost of Living.

Businesses are of course created and managed for profit. But it is not normal for profit to be guaranteed within any business, and neither should the circumstances exist where any business can manipulate a market in order that it can be so.

It is therefore essential that Government Legislate to limit the influence of Pension Funds (owners) on the Management of Businesses which provide essential goods and/or services.

Prices of such goods and services should reflect their true value and not a level of profit that businesses of smaller size and with less influence through market share would not be able to reasonably sustain.

Futures

Buying, selling or speculating on products which do not exist would sound like madness to anyone but those who are actually doing it.

Gambling in its most basic form, futures offer a guaranteed level of income for producers, and the promise of significant profits for those who are prepared to invest in what is little more than thin air over a period of time.

However, they also extend the number of links in each ‘virtual’ supply chain along with the number of businesses or agents looking for a profit. Basic prices for commodities and food are inflated way beyond their true market value as a result and the end-using customer suffers most.

Government must legislate against the misuse of Futures in goods which are essential to daily life such as crops which have not even yet been grown, or energy which has yet even to be created.

Doing so will remove speculation of this type, which always has an adverse affect upon the end users who inevitably pay the most. It will also protect producers and the markets from unforeseen circumstances that nobody can control.

***

As with many other industries, the Finance and Banking Sector has simply lost its way. Growing distance from the customer leaves decision makers without any true master other than profit, and this situation can only get worse if it is left unchecked.

Bankers must ultimately be left to make their own decisions. But until they regain ethics; a sense of what is right and wrong and the responsibility not to abuse their position, Government must lead by example and intervene where necessary so that the many in the world outside Banking do not continue to suffer because of the profit hungry few within.

image thanks to http://www.thisismoney.co.uk

The commonalities between bankers, blame-based lawyers and union bosses that touch us all and can only be dealt with by a change in the mind-set of Government first and the policies which will then follow afterwards

February 22, 2013 Leave a comment

Crazy as it may seem, many of the problems and fears facing society as a whole are inextricably linked and propagated by us all through a mesh of similar behaviours and actions. These are marked apart only by simple interpretation, knowledge, and the differences of public perspective that are all too often profitable for politicians and activists to retain.

One such example of this within this libertarian age is the ‘feel-good’ which comes from targeting those who most openly profit through the exploitation of others, and the apparent greed and avarice of high-level bankers and wealthy tax-dodgers has captivated ill-feeling within many. But is it really possible for just those few to ride off the backs of many others within a society which paints itself as being considerate of all others; or is this just the one end of a predominantly passive chain slowly strangling the UK as part of an evolving something-for-nothing and therefore self-before-all culture?

As unpalatable as it may seem, there is a distinct thread of commonality which runs from the profiteering of the hated fat-cats, through the behaviour of politicians, the influence of those promoting and making blame-based-claims, to the actions of union leaders and their seemingly strike-happy members to beyond in a way that very few would outwardly wish to knowingly associate. The sad reality is that each and every one of the self-beneficial acts that we probably at some point will have all pursued, goes on to have a negative impact upon others and usually so in a much greater number than just ourselves.

At one end of the spectrum, bankers and pension fund managers sat in plush London offices think little of the impact that pressure on retailers or energy providers to raise profits will have on end users – a point which may turn out to have been very well illustrated by the horse meat scandal and the continuing issues surrounding milk prices for farmers where margins are squeezed to unsustainable levels.

A few miles down the road, ‘career’ politicians make decisions which will affect 60 Million people based upon their chances of getting re-elected or promoted, whilst the oversold age of austerity does little to deliver any real reduction in deficit but leaves the very same people paying a higher price just the same.

Meanwhile clever animations with manipulated pop-songs and actors posing as glamorous lawyers promote the resignation of any self responsibility in accidents and the idea that somebody else is always fully to blame and must therefore pay in a very easy way, whilst the prices of almost every insurance policy in the land rises as a result.

Then in the papers, public sector union barons tell us that the Government is to blame for the slashing of services up and down the Country, when it is actually the unrealistically beneficial working conditions, wages and the limitation of responsibilities they have ransomed for their members over the course of many years which have contributed most to the destruction of a once enviable system which is sadly no longer able to sustain itself.

It is indeed ironic that it is the rise of ‘rights’ for the individual in the workplace and in just about every other part of life thereafter that strangle the rights and lives of others at every turn, and then come back full circle to a point where it is the jobs of those who sought those rights in the first place which are no longer sustainable because of the costs of the legislation and conditions that those very same enhanced rights have come to impose – generally because they have long since surpassed the point of doing good.

In every case, the public and customers at large end up paying through higher prices for food, fuel, taxes, insurances, lessening standards and losses within public services which are destroying quality of life and in some cases will probably lead to deaths if they have not already done so.

The true impact of the rising cost of living itself and the growing impact it will have upon low-income families and those in middle England who end up subsidising just about every other part of life has yet to truly manifest itself. But without change in each and every part of life and the way that every one of us approaches it, what we consider to be painful now, may soon become truly horrific.

Most of us do of course read every situation we face in life in terms of how it makes us feel and how it will impact upon us personally, rather than how it will affect the others involved, irrespective of how near or how far from us through a chain of resulting reactions they may actually be.

So in the same way that the banker raises profits by indirectly pushing the price of food up by continually pushing for better margins from the retailers that they own, union bosses demand higher wages for members so that they can afford to keep ahead of cost of living rises, with the ultimate effects being pretty much the same whichever way you choose to look at it.

Getting to a point where the balance is redressed in every sense is not a journey that any of us can toy with lightly, even though it would be politically expedient for any one of the groups discussed or their libertarian or profit-hungry apologists to do so.

The complexities brought into being when people prioritise themselves or manipulate others to do the same are enormous and much easier to embrace than they are to replace. Sadly, those who have become emotionally tied only to themselves without due regard to the result of their actions upon others are caught in a spiralling trap. One which is increasingly negative and encourages the growth of the ever evolving paranoia which accompanies the concept that all problems are of someone else’s making and that others must be made to pick up the tab.

Tackling a problem which is now cultural and has become so through many years of conditioning via the self-serving leadership of successive Governments is no easy task. Fundamentally, this is a problem which does not discern between demographics or social class and is defined only by the medium in which it is applied by the individual. It has been enhanced by the perception of close proximity, delivered by ease of communication through distance and propagated by the ease of buy-in which has itself been empowered by the two-edged-sword which is the media age.

Ultimately, self awareness and therefore responsibility of the individual has to be the aim of real Government as it will prove to be far more liberating and beneficial to everyone than the fleeting benefits any impractical plot cooked up by politicians as an easy and profitable crowd-pleaser.

It is the responsibility of those who led us here and are most likely to be happy with the status quo to lead us away from it and that is where the greatest difficulty arises.

Politicians can not only make the necessary policy changes to bring about a change which is much bigger than being about policy itself; they can also lead us in a way that advertisers, union reps and bankers simply cannot or never will be able to.

The real question here is where a change of this magnitude is going to come from when it is the political system itself which is responsible and politicians themselves who attain most benefit from maintaining the status quo.

After all, it is only politicians who have a genuine and meaningful mandate who will be selfless enough to take the risks to make those long overdue changes which nobody in Government today seems willing to outwardly contemplate. And these are indeed changes that are needed as a beacon for all to demonstrate a better way of living where a thought for all on the part of one is seen for its benefits to the one as a consequence of its benefits for us all, rather than for us continuing to live a life where the self must always come first and it seems ok for us to do so.

%d bloggers like this: