Wednesday, October 22, 2008

Darling performs U-turn, bank bail -out money to be used to pay shareholders dividends

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I reported last week that many of the large banks, bailed out to the tune of billions of dollars and pounds, are still accruing bonus funds to give to their staff instead of using the money to shore up their precarious capital position. Eg:

"If you think about it, the first restriction was not to pay bonuses. Well Lloyds TSB is in fact going to pay bonuses. I think our staff have done a terrific job this year. There is no reason why we shouldn't,"
-Eric Daniels, CEO of Lloyds TSB

This week we see that UK banks appear to be forcing the government into a U-turn on its policy of prohibiting dividend pay-outs in favour of paying the government back the money it had to invest to keep the banks from collapsing. So much for the return of regulation to the financial sector. The big guns seem to have engaged in a couple of month's false contrition to lull the stampede impulse of the bewildered herd before returning to business-as-usual arm twisting of the government. They really must believe that they are untouchable. And while people continue to vote for the grey parties they will be.

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