For months we have been discussing the impending fine that RBS was facing from the US DoJ with regards to their behaviour in the lead-up to the Financial Crisis, and today RBS learned its fate. In this third and final brief post today, we shall look at the details of that fine and examine both the sentiment it creates, and any potential effect it may have upon RBS as it continues its attempt to drag itself from a scandal-ridden decade. The issue of RBS being fined by the DoJ has been on the table for quite some time, with a number of elements coming in to play as RBS and investors struggled to predict the outcome. We spoke recently about how even the British government had inserted itself into the dynamic (lest we forget, the UK Government is the majority shareholder in the bank), and it seems that for all parties concerned, apart from the victims and the public of course, today’s announcement will be being toasted in the offices of the bank (and likely the Government) at the ti...

The Financial Conduct Authority (FCA), one of Britain’s primary financial regulators, has featured heavily within Financial Regulation Matters , for obvious reasons. However, a lot of the recent posts focusing on the regulator have been concerned with its approach to the unfolding scandal at RBS, with its role in the publication of a damning report drawing attention most recently. However, recently there have been suggestions that the regulator has ‘ gone soft ’ in its approach to the regulated, with the RBS debacle being cited as the most compelling evidence for the regulator’s approach. In this post, these accusations will be assessed against the evidence, with a larger question being asked with regards to both the role of the regulator in the larger picture, and its willingness to take action. The decision by the FCA to commission, and then refuse to release a damning report into the operations of RBS and its treatment of small and medium enterprises (SMEs), has caused outra...

This very short post aims to take a brief look at the recent news that Credit Suisse, the large banking entity that has a substantial presence in a number of key markets, have recently increased the amount that it will pay in bonuses, increasing its bonus pool by 6% which is represented by a total figure of £2.5 billion . However, for a firm carrying the negative reputation that Credit Suisse is currently carrying, this seems to be an exorbitant increase at a time when its competitors, who are similarly experiencing incredible amounts of negative publicity, have cut their bonus pools significantly – Deutsche Bank cut its 2016 bonus pool by almost 80% . This move by Credit Suisse represents either one of two things; either it shows the need to retain talent by way of increasing the remunerative package being offered, or it shows the disregard to those affected by Credit Suisse’s poor practices. Once again, the notion of ‘perception’ proves to be central here. Credit Suisse, like ...

This short post today is concerned with the issue of banking penalties, particularly as it is was revealed today by the Boston Consulting Group (BCG) that banks have, globally, paid $321 billion in fines since the Financial Crisis of 2007/08. The majority of those fines have been levied by U.S. Regulators – The U.S. Department of Justice (DoJ) – especially. So, for this post the issue will be whether this rate of punishment will continue and at what level, and then to look at the issues facing the E.U. as the spotlight turns to them and how they will punish the financial elites. As we will see, the E.U. has a specific set of circumstances which must be considered which, in the grand scheme of things, heavily impacts upon its ability to punish financial elites. The report by BCG was forthright in its assessment that the heightened level of fines and regulation is not to be considered as a reaction that will regress any time soon, which is quite an assessment in light of recent p...

Continuing the coverage of the U.K.’s largest banking institutions revealing their financial positions, which has included RBS , HSBC , and Lloyds so far, this short post will use the financial report from Barclays, which was released today , to make a point about a theme that is developing amongst the most important banks around the world. During a report on the release of the figures, Barclays’ Chairman, John McFarlane, stated that although the results were very good for the bank, it still faced challenges because ‘ a number of potentially material legacy conduct matters need to be resolved at acceptable cost ’, by which he is referring to a number of investigations by regulatory bodies in to the bank’s conduct surrounding the Crisis. For this post, the focus will be on this continued use of the word ‘legacy’, which denotes a different era to the current era of banking – the issue for this post is that the era in question was only 10 years ago, and multiple infractions continue ...