This morning I posted about eurobanks lying to the auditors about their degree of exposure to ClubMed toxic debt. The letter sent by the IASB to the Sprouts (Which I’ve now read in more detail) contains a number of classic euphemisms, my favourite of which is ‘accounts chiefly remarkable for the inconsistency of reporting criteria’. How we laughed.
Now this morning from the US comes a loan sector report from Experian Automotive, a subsidiary of credit bureau and research group Experian Plc. It shows that lenders providing loans for car purchases have reverted pretty smartly to the strategy of lending to folks who probably won’t pay them back: as of last week, the proportion of car loans made to subprime borrowers rose to 40.8% – or 2 in 5 to you and me. (It hit 46.2% just before the 2008 fiasco).
“They need to make their loan books look good,” said one experienced old hand in the sector, who didn’t want to be named and (I’m afraid) failed to explain to me why or how a toxic loan book could look ‘good’. Perhaps nearer the mark as an explanation is the rapid return of sales motivation through targets. “That will never return,” said a middle-ranking personal loans agent in late 2009. Hmm.
Just so we’re clear as to how life mirrors blog gags by the way, last night’s Slogpost about blame apportionment was made flesh this morning when the Telegraph ran a piece showing that around 30-35% of the UK’s slump could be put down directly to banking incompetence, insanity, incontinence, insubordination, inane stupidity, and lots of other words beginning with ‘in’. Also this morning, the FSA reported that a whopping £215Million was paid out by UK financial institutions to customers mis-sold assurance products.
But the UK banking industry is still fighting a rearguard action against the ring-fencing of retail banking arms. And bankers generally remain implacably opposed to regulation….which, let’s face it, is all they need to be, because their opposition will be enough to have Cameron on his back and wagging his tail.
A regulatory system is a set of rules for lowlife who don’t know how to behave. Were they decent citizens, bankers would not need to be regulated. But as we have seen for over a decade now throughout the Western world, banks lie, cheat, steal, embezzle, exaggerate, underplay, bribe, threaten, blackmail and break whole nations with their overpriced, childish, perverted paper and sleazily offered advice.
But heh, nobody’s perfect.