I wonder what is going through the mind of Fred the Shred these days. Having led a bank into meltdown at great personal reward, he has walked away with his knighthood intact and a pension of around £650,000 per year every year until he dies.
I think I need to sit down and reflect on what that amount buys each year. I guess Fred thinks it will buy him security as he probably won’t work again. It has also bought him a poor reputation. And, yet, I feel a certain sympathy for him – suprisingly.
Fred played the banking system according to the rules of the day and nobody stopped him. If he should hand back his pension, then so also should other bankers, the entire leadership of the FSA and everybody who colluded in the fantasy that if a lot of money is being made, it must all be going OK – don’t rock the boat. Fred has negotiated a settlement for early departure from the bank and is only getting what was agreed.
But this is where we see a fundamental difference between justice and grace. Justice is about getting what is deserved; grace goes beyond justice and is, in one sense, scandalous. The similarity here is that Fred has got his just desserts (justice), but ought to recognise the consequences of his leadership (and personal responsibility for those he was highly paid to employ, etc) and go beyond justice – and hand back a considerable part of the pension package.
After all, if he gave back 75% of it, he would still be far wealthier than most of his former employees put together. And, he would look generous – which he won’t if it gets legally extracted from him.
He has declined to return it so far (and he is right to say that justice has been done), but would be wise to do so now (so that mercy can be shown). He is still a human being who could not have done what he did without the massive collusion of the rest of the business and the unbelievable negligence of the FSA who only had one job to do and failed comprehensively.
February 27, 2009 at 10:12 am
I agree on the stance of grace towards everybody I can’t help but wonder if the media aren’t leading us on a blame game (which if we follow leads us away from God’s grace).
The simple fact is that the western economic model (and western civilisation in general) has resulted in more poverty for the ‘lowest’ (especially in developing countries), more pollution and a breakdown of the more fundamental ethical and moral values.
All a result of a materialistic, consumerist culture which fosters and actively encourages greed and disregards any of the big questions as being superfluous.
The challenge of overcoming the crisis’ we face is that simple ‘workarounds’ that will keep us in the lives we are used to are not going to work. We need to change our whole way of living, it takes courage, skill and determination, we will need to learn new skill sets (or rather relearn old ones) and start to live something more akin the the TV series ‘The Good Life’.
Without this we will only be trying to put a plaster on a gunshot wound.
February 27, 2009 at 12:33 pm
Given that The Shred described getting the first tranche of our money to prop his bank up as “not so much a negotiation, more a drive-by shooting,” I’m not so sanguine about what’s in his mind right now. I’m using the term “his bank” as he surrounded himself with yes-men during his time there, to an extent unusual in an ego-driven megalomaniac industry (and there were even fewer yes-women than the abysmally low industry standard, BTW).
As Gareth says, though, the continued focus on a few people who were caught out in malfeasance or failure to control risk properly at the moment the system jammed up is a very handy way for the powers that be to deflect attention from their own mismanagement.
March 1, 2009 at 12:42 am
Good point about justice and grace! Hadn’t thought about it like that. Such a fine, balanced and thoughtful post.
But one thing is nagging at my mind, and has been for a few days now. Especially in the light of the film ‘the Corporation’ which I saw at the height of corporate craziness and made me think very critically about shareholdings.
What I want to know is: all the people who are criticising the banks, who are complaining about the fat cat payouts: have you switched your mortgage, your current account and your savings away from a bank whose policy you disagree with? Do the world a favour and put your money where your mouth is. (Pick any building society you like, or the perhaps the Co-Operative or Troidos banks.) If you stop shoring up the system, banks will no longer be able to get away with stuff like this.
March 1, 2009 at 10:02 pm
Rachel, your question about critics of the banks is a good one, but misses out some important observations. For example, what would be the implications/consequences of scrapping (or letting implode) the current banking system? Given that banking is based on confidence which arises from trust, it is not just the ‘fat cat’ bankers who will suffer if the entire global financial system collapses. If everyone tried to dump the bad banks, it wouldn’t actually help anybody. But the shamed banks do need now to be held more closely to account. It is always the poor who suffer from the successes and failures of the rich who also happen to be corrupt or negligent (and not all rich people are).
But I do agree with your suggestion that we need to support any moves towards recovering the distinctive identities and functions of building societies and banks. The mutuals should never have been floated and the banks’ hubris should have been challenged. This whole debacle looks to me like the final gasp of Thatcherite deregulatory dogma and what emerges must be established ona more just and intelligent division of competences (among other things).