One thing that most people probably agree on is that having their instant messages, e-mails, and phone call transcripts end up court would be cause for at least a little embarrassment. Everyone’s thrown in an emoticon they aren’t proud of, some of us have used company time to chat with significant others about undergarments, and the vast majority of workers have spent a not insignificant amount of the workday talking shit about their superiors. Of course, the humiliation gets ratcheted up a notch in the case of people who ‘haha’ (and in extreme circumstances ‘hahahah’) their own jokes* which, just for example, involve habitual Libor manipulation. Tan Chi Min knows what we’re talking about:
“Nice Libor,” Tan said in an April 2, 2008, instant message with traders including Neil Danziger, who also was fired by RBS, and David Pieri. “Our six-month fixing moved the entire fixing, hahahah.”
And while having such an exchange become public would be tremendously awkward for most, you know what’s really ‘hahaha’ about this whole thing? That 1) Tan was the one who wanted people to read the above, which was submitted as part of a 231-page affidavit earlier this month and 2) He’s trying to use it as evidence that he didn’t deserve to be fired. Read more »
Like Bank of America, RBS has some big goals for the coming year, chief among them being the firing of several thousand investment bankers. (For those skeptical they can do it, according to a PowerPoint presentation presented yesterday, re: the “exits,” quite a bit of progress has already been made.) Read more »
It’s hard to see what is news about the latest Libor news but it exists so let’s paste it here:
Royal Bank of Scotland Group Plc managers condoned and participated in the manipulation of global interest rates, indicating that wrongdoing extended beyond the four traders the bank has fired.
In an instant-message conversation in late 2007, Jezri Mohideen, then the bank’s head of yen products in Singapore, instructed colleagues in the U.K. to lower RBS’s submission to the London interbank offered rate that day, according to two people with knowledge of the discussion. No reason was given in the message as to why he wanted a lower bid. The rate-setter agreed, submitting the number Mohideen sought, the people said.
One way to conceptualize Libor is that it’s the interest rate at which banks lend to each other on an unsecured basis. This is fine as far as it goes but late 2007 was farther than it went; by that point banks were skittish about unsecured lending and Mervyn King was already conceptualizing Libor as the interest rate at which banks don’t lend to each other. But of course there are lots of rates at which banks don’t lend to each other; 714.03% per annum is, for example, a perfectly good interest rate at which I will assert banks don’t lend to each other. So King’s formulation insufficiently specifies.
But that means you need a new concept! It just does; you can’t avoid it by saying “well just try harder to say what rate you borrow at when you don’t borrow.” How do you get the new concept? Beats me; the CFTC has listed factors that were kosher to consider and they include prior Libor submissions, actual and expected central bank decisions, and “research documents,” which are all, like, things you can look at, but which are none of them information about rates you can borrow at.1 Read more »
The bad news is that 600 of the Queen’s corgis are being let go. The good news, while it probably comes as little solace to those who will no longer receive birthday chickens, is that 300 or so new ones will be hired in their place. Read more »
Sir Philip Hampton said investors who owned RBS shares before its £45.5bn bailout in October 2008 were likely to be dead before the bank’s value recovered to anything close to its pre-crisis level. “I don’t think shareholders wealth is likely to be restored any time in my lifetime or some lifetimes beyond,” said Sir Philip, who was brought in as the bank’s chairman in January 2009. [Telegraph]
Earlier today the Royal Bank of Scotland reported a loss of £2 billion ($3.13 billion) for last year, which CEO Stephen Hester noted was in line with the estimates he projected in his five-year turnaround plan for the bank. To that end, Hester told reporters that contrary to popular belief, his team is working quite hard, “defusing the biggest-ever time bomb put in a banking balance sheet” and so, looking at it that way, “we are making progress.” Progress which should be rewarded monetarily, which is why bonuses were in fact distributed this year, to the ire of the many, many critics giving Hester guff for keeping his people moderately happy or at least not homicidal. Having said that, those thinking the firm has the money to not only pay bonuses but raise base pay *and* bring in dancing chickens should think again. Read more »
If it makes the canned feel any better, this is harder on them that it is on you. Read more »
Breaking his silence after the furore over his near £1m bonus and Fred Goodwin’s knighthood, Mr. Hester emailed employees admitting that such political and media attention makes the job more difficult. “There is no doubt that our position in the spotlight makes the job harder. But the best way to deal with it is to prove the critics wrong. To be purposeful, calm, and do our jobs to the best of our ability…We can’t control the outside world– whether the economic environment or the political one,” Mr. Hester, who noted RBS was still in a “loss-making phase” said. “That’s not unique to us. But if ever something has been proven over our last three years of history, it’s this – we can successfully overcome great obstacles. [Telegraph]
Why have there been multiple instances of guys dressed up as chickens descending on RBS’s Stamford trading floor, the most recent one being this past Friday? Read more »
The Royal Bank of Scotland Group PLC’s chairman on Friday acknowledged that the bank had miscalculated the public and political reaction to the £963,000 (around $1.5 million) bonus in shares awarded to Chief Executive Stephen Hester, who subsequently turned down the payment…”We knew it would be a difficult reaction, but the speed and scale of it took us by surprise,” Mr. Hampton said in a briefing with reporters. [WSJ]
The past couple years have not been what one might characterize as the best of times for former RBS CEO Fred Goodwin. After retiring from his post in November 2008, he missed out on helping the bank collect the award for biggest loss in British corporate history (£24.1 billion for the year), the windshield of his Mercedes-Benz S600 was smashed by a bunch of hoodlums, a brick was thrown through his window, and the banging of an underling came to light. He’s also had quite a bit of trouble getting a new gig on account of being “overqualified.” No, he’s had it pretty rough but the one thing that kept him going? That made life slightly more bearable? That kept him warm at night? The fact that he could look himself in the mirror and see an official Knight looking back. “Fuck ‘em if they can’t take a joke [vis-à-vis bombing a bank from the inside],” he’d say to himself. “One of us is a Knight and the other? Not so much.” When the neighborhood kids would throw shit throw shit at his house and spray paint “royal bum” on his front walk, he could at least comfort himself by muttering, “That’s Sir Royal Bum to you, thanks very much.” And now? He can’t even do that. Read more »