RBS Bankster's Holding Labour Government to Ransom for £1.5 Billion

By: Nadeem_Walayat

The Board of Directors of RBS Bank, which is 71% UK tax payer owned is using tax payer funds to pay for legal advice to ensure fellow bankster's receive a bonus this year amounting to at least £1.5 billion of tax payer monies as a further reward for failure.

This action is in response to Alistair Darlings intention to block the bankster's from handing out obscene and shameful bonuses in the light of RBS playing its part in bringing Britain to the brink of bankruptcy. The government is by far the majority share holder in the defacto nationalised RBS bank in all but name and thus has the right to block the Board from paying out bonuses which are more than 50% greater than the £900 million skimmed off tax payers last year.

The bonus payments are on the false premise that the RBS has generated profits of £6 billion this year, however these profits are artificially generated business as a consquences of Bank of England Quantitative Easing monetization of UK huge tranches of government debt. Which coupled with the artificially low interest rates has resulted in the bankster's enjoying extremely high profit margins, the intentions of which was for the bankrupt banks to rebuild their balance sheets and NOT to pay out billions in bonuses.

The Banks generally have little incentive to loan money out to the wider economy under the current artificial banking system as a consequence of tax payer bailouts. The bankster abuse of tax payer funds is not just limited to sitting on cash on deposit at the Bank of England meant for the UK economy as when the banks do lend money it is far in excess of the interbank rate of 0.57%. In reality the real interest rate should vary between interbank rate plus 0.5% to 1%, depending on the customers credit rating. However the actual amount being charged to customers on the standard variable rates ranges from interbank rate PLUS 3% to 5%, far beyond that of how a competitive banking system operates as the below graph illustrates.

The RBS Directors have warned of a mass resignation if the Labour Government blocks the payment of the £1.5 billion bonus / ransom money. In my opinion the Labour Government to show that it still has any credibility left in the run up to a general election should call the RBS Boards bluff on the hopes that they do resign on mass as they clearly do not serve in the interests of the shareholders i.e. the British tax payers.

By Nadeem Walayat
http://www.marketoracle.co.uk

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Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 400 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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