Of course I am dead keen to write about football again, but I will leave it for a while. Suffice to say that firing Capello may feel good but is about as stupid as it was to take Green out of goal. It will not solve the problem. In business like in sports it is key to deal with the cause of the problem, not the result. It is a bit like shooting the messenger – may feel good but it is ultimately not constructive.
As I have resisted commenting on our bankers for a while, and I feel the urge to do so now. There is a lot I like about our new government, but I am very disappointed how they sold out to the banks.
With pride and joy they said they were putting some kind of levy on the banks which will raise £2 billion. Wow you say – that sounds like a nice big, juicy number!
Let me put that number into perspective – all the banks together in the UK will pay, if we are very lucky, a levy to help repair the economy they collectively killed, which is equal to ………… are you ready …………. 40% less than Goldman Sachs paid in bonuses this year.
Goldman Sachs – the king maker of the banking industry, the bank in the middle of a fraud case in which they are accused of taking an amount of money not dissimilar to the amount Osbank hopes to collect from the banks, the bank which is considering appearing on Oprah’s show to repair its image. They will not even remember the tiny amount of the levy when they need to calculate their next bonus pot.
I lost count how many billions we had to put into the banks to save them, but the £2billion is closer to the legal fees paid by us for the support than the investment itself. The amount put into Enterprise Britain was a rounder number – zero! So much for claiming to support the engine of our future economy!
The banks must be laughing themselves silly as they mentally bank their next bonuses. They know as we do that they got away with something akin to murder.
In the meantime I went out to try to get some asset finance for a small business I am working with. This company is cash rich, has been profitable since it was founded dozens of years ago, has no debts, lots of unencumbered assets, so in terms of credit risk it is as good as you get. So the bank generously offered 5 year funding at 14%.
Now I know the banks will tell you they have to recoup this Osbank tax and of course their much, much larger bonus packs, but 14% at a time when the base rate is 1%? Someone is having a laugh!
So whilst I was almost convinced banks might help fund Enterprise Britain, I now know it does not work. Osbank – start thinking constructively about the revival of Enterprise Britain please!