Banking

Royal Bank of Scotland is at last about to dump the ‘RBS’ logotype promoted by its fallen chieftain Fred Goodwin, who thought ‘Scotland’ too parochial for a bank with global ambitions, though he was famously keen on royal connections. The wonder is that this decision has taken seven-and-a-half years since the bank was saved by £46 billion of taxpayers’ money.I suppose Goodwin’s successors, now led by Ross McEwan, have had too many other fires to fight, what with losses piling upon losses (first-quarter results twice as bad as last year’s), delays in the spin-off of the Williams & Glyn subsidiary, computer problems, and a looming scandal in the Swiss branch of Coutts, the group’s wealth arm.

All this talk of a new financial apocalypse, so soon after the last one, is starting to annoy me. Partly because investors as a crowd are so irrational; -partly because so much that governments and central banks have done to contribute to the current market mayhem seems to work against the sensible efforts of ordinary folk to build a bottom-up recovery. Markets first. We’ve had hissy fits about China, even though connections between the Chinese and UK economies are so marginal. We’ve had near-hysteria about the prospect of (and in the US, the start of) rising interest rates.

A new European banking crisis. Seriously? Starting at Deutsche Bank? That’s the way markets were pointing on Tuesday as Deutsche’s shares plunged, inter-bank liquidity shrivelled, would-be investors in bank bonds hid in the toilets and speculative short-sellers did the work of the devil. And we all know there’s no smoke without fire, right? Let’s pause for thought here. The clue to whether Deutsche is ‘rock-solid’ (as its British chief executive John Cryan asserts) or tottering is in its name. Can anyone seriously imagine the German state and corporate establishment allowing the bank that bears their country’s name to go down? Of course they won’t.

Amid all the turmoil in global energy markets, we should not lose sight of the UK power programme that we’re praying will keep our lights on a decade hence: it is, as you know, a hobbyhorse of mine. So how’s it going down at Hinkley Point in Somerset? My man with big binoculars in the Bridgwater Bay nature reserve tells me he’s seeing plenty of lorry movements on the nuclear site, but signals from EDF of France — which has a two-thirds interest in this £18 billion project, alongside Chinese investors — are very worrying. Having already spent £2 billion, the French state utility has deferred until at least the middle of this month a final commitment that was expected last week.

Was the Financial Conduct Authority leaned on by the Chancellor to scrap its ‘review of banking culture’? Or did it decide pragmatically that its resources would be better devoted to pursuing individual cases of cheating and criminality? I suspect the answer is a bit of both. Acting FCA chief Tracey McDermott — a no-nonsense northerner and former litigation lawyer — is reputed to be just as tough as her predecessor Martin Wheatley, who was ousted by Osborne last year, apparently for being too much the turbulent priest. Tracey became a regulator because she was interested in seeing ‘if human behaviour could be improved’ — in particular, the behaviour of people who are not dishonest by nature but are swept along by the tide.

Last year was a bumper year for mergers and acquisitions. Recovering prospects and relatively low price-earnings ratios made the takeover arena alluring: the global volume of deals looks certain to have passed the $4.3 trillion record of 2007. Among the new giants are Shell-BG, Heinz-Kraft, Pfizer-Allergan and monster brewer AB InBev-SAB Miller; bonuses reaped by London M&A bankers will fund basement diggings bigger than Crossrail. So you might expect me to name my deal of the year: but no.

The high street flopperoo that was ‘Black Friday’ may have something to do with terrorism fears, or even the downturn of the Chinese economy: in last year’s ugly scenes of bargain-hunters wrestling over televisions, Chinese tiger--shoppers seemed to win most of the spoils. But this year you could have held a picnic in the entrance of an Oxford Street store without fear of being trampled; trade had migrated massively online, where total UK sales are estimated to have passed £1 billion in a day for the first time and to have peaked (how sad is this?) between midnight and one in the morning. Amazon alone processed 7.4 million purchases in 24 hours.

‘Everyone remembers the names of Applegarth of Northern Rock and Goodwin of RBS, but history may judge the HBOS men to have been the worst of the lot,’ I wrote four years ago. Judgment has arrived at last in a Bank of England report on the 2008 HBOS collapse — plus a second report, by Andrew Green QC, on the adequacy of investigations by the now-defunct Financial Services Authority. The Bank does not go as far as I did with ‘worst of the lot’.

The NHS and politicians Sir: The NHS is indeed in need of fundamental reform, but Max Pemberton’s excellent article (‘The wrong cuts’, 14 November) exemplifies why politicians are least well qualified to conduct it. The public loves the NHS and has every reason to distrust political meddling. NHS England should become a public corporation with a five-year charter similar to that applying to the BBC. Of course politicians must decide the total budget and agree the strategic goals, but that is a far cry from deciding the pay and hours of every category of staff. Politicians have no managerial skills and should leave that to the professionals.

Like the Christmas pudding sampled by Hercule Poirot at Kings Lacey — but six weeks early — our Spectator Money supplement contains a little treasure in every portion, and perhaps even a priceless gem. I particularly commend the essays by Warwick Lightfoot and Subitha Subramaniam on interest rates, and why central banks have become so hesitant to raise them. In recent days we’ve had an indication from Mark Carney of the Bank of England that UK rates will stay at their current low well into next year, maybe until 2017; in the US, strong job numbers have pumped expectations that the first rate rise for nine years will be delivered by Fed chairman Janet Yellen in December.

I confess to being an out-and-out Luddite when it comes to bitcoin and other so-called crypto-currencies. To the extent that I think about them at all, I think that they are an ephemeral by-product of those creepy ‘virtual worlds’ in which obsessed gamers eventually go mad; that only such lost souls could seriously believe unregulated online money might eventually supplant the state-backed real thing; and that fashionable belief in them can only lead to fraud and loss. In short, I concluded some time ago, they are probably the work of Satan.

I’m not a customer of TalkTalk, the phone company which revealed last week that a hacker had potentially compromised the personal data of four million users. But I feel I’m on the front line of the cyberwar nevertheless. In August, someone unknown to me tried to spend £1,200 at House of Fraser on my credit card account. The bank, to its credit, sniffed a fraud, rejected the transaction, cancelled the card and invited me to speak to a nice young man in India who talked me through the corrective procedure, including deleting a false email address inserted by the fraudster and setting up a new password to add extra security for future contacts.