[…] Despite all his populist slogans, Trump was born with a golden spoon in his mouth. He understands having money because he never had to understand not having money. He understands bending the rules because he’s made money doing that. He became president doing that. He boasted about it during the election.
He gravitates to people similar to him, billionaires and up and coming millionaires. His cabinet choices are pedigreed and skilled at using the government to their profit advantage. We are supposed to believe that because they know how that game is played, that as public officials they will divert those talents on our behalf. The only fly in that ointment is that they have no reason to do so.
We have Steven Mnuchin, the Treasury secretary nominee, whose hedge fund took over a California bank in 2009 on the cheap, got the government to back the risk of the deal and proceeded to foreclose on 36,000 homes between 2009-2015, reaping a profit for him and his group of around $1.5bn. He’s not going to regulate the industry that handed him that windfall. Then, there’s Commerce secretary nominee Wilbur Ross who made billions taking over flailing steel and other industrial companies, pushing costs like pension payments onto the government and firing people in the process. He’s not about to advocate for unions or higher minimum wages or equal pay for women in the workplace.
As a theoretical physicist based in Cambridge, I have lived my life in an extraordinarily privileged bubble. Cambridge is an unusual town, centred around one of the world’s great universities. Within that town, the scientific community that I became part of in my 20s is even more rarefied.
And within that scientific community, the small group of international theoretical physicists with whom I have spent my working life might sometimes be tempted to regard themselves as the pinnacle. In addition to this, with the celebrity that has come with my books, and the isolation imposed by my illness, I feel as though my ivory tower is getting taller.
So the recent apparent rejection of the elites in both America and Britain is surely aimed at me, as much as anyone. Whatever we might think about the decision by the British electorate to reject membership of the European Union and by the American public to embrace Donald Trump as their next president, there is no doubt in the minds of commentators that this was a cry of anger by people who felt they had been abandoned by their leaders.
It was, everyone seems to agree, the moment when the forgotten spoke, finding their voices to reject the advice and guidance of experts and the elite everywhere.
Bankers Behind ‘Great Foreclosure Machine’ Join Trump’s Cabinet as Treasury and Commerce Secretaries
Amy Goodman speaks to David Dayen, journalist and author of Chain of Title, about two of Donald Trump’s Cabinet picks: Steven Mnuchin for treasury secretary and Wilbur Ross for commerce secretary. Dayen’s most recent for The Nation is ‘Wilbur Ross and Steve Mnuchin—Profiteers of the Great Foreclosure Machine—Go to Washington‘. (Democracy Now!)
President-elect Donald Trump is considering offering the post of Treasury secretary to JPMorgan CEO Jamie Dimon, CNBC’s Kate Kelly is reporting.
A lifelong Democrat, Dimon supported Barack Obama in 2008 and during the aftermath of the financial crisis.
As post-financial-crisis Dodd-Frank regulation started to make an impact on the American financial system, however, he became much more critical.
On Wednesday, after Trump won Tuesday’s presidential election, Dimon sent a memo to JPMorgan employees calling them to come together for the nation. He also made a subtle dig at Trump’s stances on immigration and race.
[…] JPMorgan declined comment to Business Insider about Trump’s possible interest in Dimon as Treasury secretary. Steven Mnuchin, a former Goldman Sachs official, is also reportedly in the running for the position.
Behold the bonfire of the certainties. In combination with June’s Brexit vote, the political reaction that many assumed would hit in 2009 has finally come to pass. The US wants to reverse globalisation, as does the UK, while France, Germany and Italy all have a chance to upend the status quo at the ballot box in the coming months.
The certainties that had reassured investors and financiers since the era of Thatcher and Reagan, and that are now in question, include a global commitment to free trade, independent central banks, a financialised version of capitalism, and relatively limited social safety nets. Although many of those voting for British exit from the EU, and for a Donald Trump presidency, have a deep distrust of governments, the likely result is more interventionist governments.
Mr Trump’s character adds a layer of uncertainty. As President Barack Obama argued, to no avail, it is worrying when someone who will now have control of the nuclear codes cannot be trusted with their own Twitter account. This uncertainty will itself damage securities prices and shake confidence.
Putting Mr Trump’s personal character to one side, in the broader picture the result should not have been a surprise. Back in 2008, as the financial crisis broke, many thought a political crisis would ensue within months. Capitalism appeared broken, and some form of populist reaction an inevitability. The surprise is that the denouement has been so long delayed.
[…] This is not some two-dimensional revolt against poverty and wage stagnation. It is a three-dimensional revolt against the impacts of neoliberalism – both positive and negative.
Freemarket economics unleashed two forces that have now collided: the rapid rise in inequality, and a route to the top percentile for the talented female, black or gay person. As long as it delivered not just growth but a growth story, a foreseeable better future, those disempowered by neoliberalism could stand it.
But neoliberalism no longer works. It is broken. If it survived it would have delivered at best zombie growth fuelled by central bank money and at worst stagnation. But it will not survive. Last summer I predicted that if we do not break with the economics of high inequality, high debt and low productivity, populations will vote to dismantle the global order. With Brexit and Trump that process is inexorable – and the next wave of the tsunami will hit Italy and Austria in their plebiscites on 4 December.
In the next weeks, our denial reflexes will be in full swing. Like Auden’s generation we will “cling to our average day”. But one set of people now faces a moment where only honesty will suffice. It is the economists, journalists, civil servants, bankers and policy wonks who have rubbished the idea of the existential threat.
Author of ‘All The Presidents Bankers’ Nomi Prins joins Paul Jay and panelists to discuss the economics behind Donald Trump. (The Real News)
On Oct. 29, 2013, Hillary Clinton joined Lloyd Blankfein, the CEO of Goldman Sachs, for a discussion at its Builders and Innovators Summit, at the Ritz-Carlton Dove Mountain resort, near Tucson. During the discussion — one of more than 50 appearances for which Clinton received $225,000 since leaving the State Department — she lamented that the public’s wariness of Wall Street had made it difficult for top people in finance to move into government. For one thing, in order to avoid conflicts of interest, they often faced demands to relinquish financial holdings. “There is such a bias against people who have led successful and/or complicated lives. You know, the divestment of assets, the stripping of all kinds of positions, the sale of stocks — it just becomes very onerous and unnecessary,” she said, according to a transcript released last month by WikiLeaks.
That is not the kind of thing that Sen. Elizabeth Warren, of Massachusetts, likes to hear. Warren supports Clinton, and has been one of her most effective advocates during the current campaign, but she has also made it clear that, if Clinton is elected, she will closely monitor the people she names to key posts. On Sept. 21, in a speech at the Center for American Progress, a left-of-center think tank based in Washington, Warren said, “Personnel is policy. When we talk about personnel, we don’t mean advisers who just pay lip service to Hillary’s bold agenda, coupled with a sigh, a knowing glance, and the twiddling of thumbs until it’s time for the next swing through the revolving door — serving government, then going back to the very same industries they regulate. We don’t mean Citigroup or Morgan Stanley or BlackRock getting to choose who runs the economy in this country so that they can capture our government.”
People with experience in business or finance are a necessity in Washington, but the specter of a privileged executive elite circulating in and out of government and the private sector — especially Wall Street — has shadowed the American political system for more than half a century. The financial industry still favors the Republican Party, but, since the 1990s, it has become more closely affiliated with the Democrats, and that has provoked a resurgent left, led by Warren and by Sen. Bernie Sanders, of Vermont.
Sharmini Peries speaks to former Goldman Sachs managing director, author and journalist Nomi Prins. She says just one example of Wall Street influence in running the government is Jack Lew, Secretary of the Treasury, who was the former Citigroup COO and a former Deputy Secretary of State under Clinton and Chief of Staff at the White House. Her latest piece is titled Waking Up In Hillary’s America. (The Real News Network)
As this endless election limps toward its last days, while spiraling into a bizarre duel over vote-rigging accusations, a deep sigh is undoubtedly in order. The entire process has been an emotionally draining, frustration-inducing, rage-inflaming spectacle of repellent form over shallow substance. For many, the third debate evoked fatigue. More worrying, there was again no discussion of how to prevent another financial crisis, an ominous possibility in the next presidency, whether Donald Trump or Hillary Clinton enters the Oval Office—given that nothing fundamental has been altered when it comes to Wall Street’s practices and predation.
At the heart of American political consciousness right now lies a soul-crushing reality for millions of distraught Americans: the choices for president couldn’t be feebler or more disappointing. On the one hand, we have a petulant, vocabulary-challenged man-boar of a billionaire, who hasn’t paid his taxes, has regularly left those supporting him holding the bag, and seems like a ludicrous composite of every bad trait in every bad date any woman has ever had. On the other hand, we’re offered a walking photo-op for and well-paid speechmaker to Wall-Street CEOs, a one-woman money-raising machine from the 1% of the 1%, who, despite a folksiness that couldn’t look more rehearsed, has methodically outplayed her opponent.
With less than two weeks to go before E-day—despite the Trumptilian upheaval of the last year—the high probability of a Clinton win means the establishment remains intact. When we awaken on November 9th, it will undoubtedly be dawn in Hillary Clinton’s America and that potentially means four years of an economic dystopia that will (as would Donald Trump’s version of the same) leave many Americans rightfully anxious about their economic futures.
Documentary by British filmmaker Adam Curtis released on 16th October 2016 exclusively on BBC iPlayer. (BBC)
[…] It’s an existential crisis for former masters of the universe who once prided themselves on their trading prowess. Now they’re questioning their wisdom and their ability to generate profits that made them among the richest in finance.
The $2.9 trillion industry has posted average annual returns of 2 percent over the past three years, well below those of most index funds, according to data compiled by Bloomberg. That meager performance and complaints about high fees from pension plans and other investors led to $51.5 billion being withdrawn from hedge funds in the first nine months of the year, the most since the financial crisis, data compiled by Hedge Fund Research Inc. show. About 530 funds were liquidated in the first half, on pace for the most shutdowns since 2008.
Managers blame a wall of index-fund money and algorithmic trading for warping markets. They bemoan central bank near-zero-rate policies, political and economic decisions made overseas and government regulation for undermining their craft. Add to that global economic uncertainty and an onslaught of technology that’s changing the investing process. It’s enough to have the so-called best and brightest second-guessing themselves.
A group of almost 500 businesses suing the Royal Bank of Scotland for allegedly destroying their firms and seizing their assets is threatening legal action against the Financial Conduct Authority if it does not immediately publish its long-awaited report into the scandal.
The central allegation of the so-called “Dash for Cash” scandal was that firms – in some cases healthy ones – were preyed on by RBS which effectively bankrupted the companies, bought the assets and made a profit from their suffering. RBS denies the allegations. David Stewart, spokesman for the RBS GRG Business Action Group, said:“Unless the FCA gives an immediate commitment to publishing the Section 166 report, we will initiate judicial review proceedings against them.”
The FCA, the financial regulator, launched a probe into the Dash for Cash scandal in January 2014. The report, produced by consultants Promontory and Mazars, was handed to the FCA in late summer but the regulator only confirmed receipt on October 5.
For former Wells Fargo CEO John Stumpf, this will be his first weekend as a wealthy retiree. So it goes in a world where big banks can screw over customers and the public, and the CEO who presided over these practices can slink off into the sunset unencumbered by the kind of real retribution that plagues small-time drug users and petty thieves. They go free. We pay the price.
Two days before the bank’s quarterly earnings announcement, Stumpf announced his immediate resignation. That decision came about a month after the firm was slapped with a $185m settlement for a fee-stealing scam that resulted in the axing of 5,300 low-level employees. He did not resign after settlements for any of the prior wrongdoing that took place under his purview for which the firm paid about $10bn in fines.
Make no mistake. Stumpf was the captain and commander of this $1.9tn empire. Its culture, as in all Wall Street culture, was defined from the top down, not the other way around. For his penance, all Stumpf had to do was forfeit $41m in restricted stock awards (stock he didn’t even fully own yet).
The Presidential election of 2008 was held on November 4, with Barack Obama winning on a promise of delivering “hope” and “change” to a nation in the midst of the worst financial crisis since the Great Depression. At that time, Citigroup was a financial basket-case. It had already received $25 billion from the government’s bailout program known as the Troubled Asset Relief Program (TARP) in October; it was secretly receiving hundreds of billions of dollars more each month in below-market rate, revolving loans from the Federal Reserve — information which the Fed refused to make public despite multiple Freedom of Information Act requests from the media; and Citigroup was just 19 days from more hemorrhaging, requiring an additional government infusion of $20 billion and asset guarantees of more than $300 billion. Citigroup’s stock was at $13.99, a decline of 63 percent in just 12 months and it was on its way to eventually trade as a penny stock, at 99 cents.
Citigroup had been serially charged by its regulators for abusing its customers and targeting the poor and financially uneducated. But key executives at the bank had played major roles in raising funds for the Barack Obama campaign so it was richly rewarded for that.
According to emails released by WikiLeaks yesterday, which came from a hack of the email account of John Podesta, a co-chair of Obama’s 2008 Transition Team, we learn that despite the obvious fact that Citigroup was both corrupt and derelict in handling its own financial affairs, Barack Obama gave executives of that bank an outsized role in shaping and staffing his first term.
Thousands of confidential documents obtained by Newsnight and BuzzFeed News reveal how the bank systematically squeezed struggling businesses with fees and higher interest rates. RBS said it had let some small business customers down in the past but denied it deliberately caused them to fail. Andy Verity reports. (BBC Newsnight)
The Royal Bank of Scotland killed or crippled thousands of businesses during the recession as a result of a deliberate plan to add billions of pounds to its balance sheet, according to a leaked cache of thousands of secret documents.
The RBS Files – revealed today by BuzzFeed News and BBC Newsnight – lay bare the secret policies under which firms were pushed into the bank’s feared troubled-business unit, Global Restructuring Group (GRG), which chased profits by hitting them with massive fees and fines and by snapping up their assets at rock-bottom prices.
The internal documents starkly contradict the bank’s public insistence that GRG acted as an “intensive care unit” for ailing firms, tasked with restructuring their loan agreements to “help them back to health”.
RBS has repeatedly denied allegations that it destroyed healthy businesses for profit – first raised in a damning report on its treatment of small-and medium-sized enterprises (SMEs) by the government adviser Lawrence Tomlinson three years ago. The bank paid the magic circle law firm Clifford Chance to conduct an “independent investigation” that found “no evidence” of the claims, and an official inquiry by the banking regulator has been long delayed.
The RBS Files now reveal for the first time that, under pressure from the government, the taxpayer-owned bank ran down businesses in its restructuring unit as part of a deliberate, premeditated strategy to cut lending and bolster profits. And they show that GRG, ignoring repeated warnings about conflict of interest, collaborated closely with the bank’s own property division, West Register, to buy up heavily discounted assets it had forced its customers to sell.
Deutsche Bank was given special treatment in the summer EU stress tests that promised to restore faith in Europe’s banks by assessing all of their finances in the same way.
Germany’s biggest lender, which has seen its share price fall as much as 22 per cent in recent weeks on fears that it could face a US fine of up to $14bn, has been using the results of the July stress tests as evidence of its healthy finances.
But the Financial Times has learnt that Deutsche’s result was boosted by a special concession agreed by its supervisor, the European Central Bank.
[…] Normally, dramatic drops like this are triggered by major news events, such a declaration of war or a monumental political development. But experts say this incident was likely the result of trading algorithms that were reacting to recent comments made by French President Francois Hollande, who called for tougher Brexit negotiations.
“Apparently it was a rogue algorithm that triggered the sell-off after it picked up comments made by the French President, Francois Hollande, who said if Theresa May and [company] want hard Brexit, they will get hard Brexit,” noted Kathleen Brooks, research director at City Index.
She says that some modern algorithms trade on the back of news sites, and even on what’s trending on social media sites like Facebook and Twitter. “[A] deluge of negative Brexit headlines could have led to an algo taking that as a major sell signal for GBP,” said Brooks. “Once the pound started moving lower than more technical algos could have followed suit.”
High frequency stock trading is a form of rapid-fire trading that involves algorithms, or bots, that can make decisions on the order of milliseconds. They’re guided by factors such as time, price, some fancy math—and even headline news. Compared to these lightning-fast traders, humans are slower by an order of magnitude, which means we’re increasingly being left out of the loop. Stock trading represents the first major domain in which we’re getting AI to do most of the work, and an entirely new digital ecology is emerging.
Populism is rampant. Donald Trump is a contender for the US presidency. Marine Le Pen fancies her chances in France. Across Europe and beyond there is a powerful sense of mainstream politics reaching a state of abject failure. These are volatile, dangerous times: what with all that shouting about greedy, cosseted elites, people close to the summit of power and influence surely ought to be very wary of playing to type.
But just look. This week the petition protesting at José Manuel Barroso, a former president of the European commission, taking a new job as a nonexecutive chairman and adviser to Goldman Sachs International surpassed 75,000 signatures. It is the work of employees of the EU, whose horror at Barroso’s move is captured in its preamble, and reference to the “European project’s deteriorating image among our families, friends and neighbours as well as the many citizens we encounter all over Europe”. They are aiming at 150,000 signatories, and want the appointment to be referred to the European court of justice, which could theoretically take away Barroso’s €100,000-a-year pension.
How much he’ll be paid is unclear. But in a role partly built around advice about the consequences of Brexit, Barroso will be working for the bank that played a key role in the US subprime crisis, and helped Greece mask its fatal debt problems. The whole spectacle suggests a man gleefully posing for his own caricature, and it is hardly unique: indeed, highlighting a revolving door that never stops turning, his predecessor at Goldman Sachs International was Ireland’s former EU commissioner Peter Sutherland.
[…] It all comes back to the simple goal of fiddling with interest rates.
That matters because interest rates, simply put, are the price of money. If you’re trying to start a small business, but don’t have the upfront capital to get it off the ground, the interest rate is what it costs you to get the money from someone else. Like all other economic trades, it’s about supply and demand: When lots of people want money for potential new economic ventures, but there’s not much money available, interest rates are high. When the supply of money exceeds the demand for it, interest rates are low.
But this causality can also flow in the opposite direction: If the Fed drives down interest rates, it lowers the hurdle to getting capital. That can open up new demand for money, from people who want to do something but couldn’t afford the previous rates. That’s really the whole idea behind Fed policy: When we have a recession, the Fed lowers the hurdle, new job creation takes off, and the economy snaps back. When it looks like the economy is overheating and inflation might take off, the Fed raises the hurdle and slows things down.
But that raises the question: What happens if the Fed lowers the hurdle all the way to the ground and… nothing happens? What if interest rates hit zero and stay at zero, and the demand for capital and new job creation doesn’t sprint ahead?
That’s basically the situation we’re in now.
In June, the ECB began buying the bonds of some of the most powerful companies in Europe as well as the European subsidiaries of foreign multinationals. This pushed the average yield on euro investment-grade corporate debt to 0.65%. Large quantities of highly rated corporate debt with shorter maturities are trading at negative yields, where brainwashed investors engage in the absurdity of paying for the privilege of lending money to corporations. By August 12, the ECB had handed out over €16 billion in freshly printed money in exchange for corporate bonds.
Throughout, the public was given to understand that the ECB was buying already-issued bonds trading in secondary markets. But the public has been fooled.
Now it has been revealed by The Wall Street Journal that the ECB has also secretly been buying bonds directly from companies, thus handing them directly its freshly printed money.
Almost every weekday between the fall of 2011 and early 2015, a Russian broker named Igor Volkovcalled the equities desk of Deutsche Bank’s Moscow headquarters. Volkov would speak to a sales trader—often, a young woman named Dina Maksutova—and ask her to place two trades simultaneously. In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented. Usually, the order was for about ten million dollars’ worth of the stock. In the second trade, Volkov—acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands—would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros. Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself.
At first glance, the trades appeared banal, even pointless. Deutsche Bank earned a small commission for executing the buy and sell orders, but in financial terms the clients finished roughly where they began. To inspect the trades individually, however, was like standing too close to an Impressionist painting—you saw the brushstrokes and missed the lilies. These transactions had nothing to do with pursuing profit. They were a way to expatriate money. Because the Russian company and the offshore company both belonged to the same owner, these ordinary-seeming trades had an alchemical purpose: to turn rubles that were stuck in Russia into dollars stashed outside Russia. On the Moscow markets, this sleight of hand had a nickname: konvert, which means “envelope” and echoes the English verb “convert.” In the English-language media, the scheme has become known as “mirror trading.”
Europe is heading towards a “cataclysmic event” that could lead to the collapse of the euro and the end of the European project as we know it, according to Nobel prize-winning economist Joseph Stiglitz.
In an interview with Business Insider following the launch of his latest book “The Euro: How A Common Currency Threatens the Future of Europe” — which argues that the European single currency will inevitably cease to be at some point in the future unless drastic changes are made — Stiglitz said that a “disastrous” political event similar to the United Kingdom’s decision to leave the European Union could trigger such a collapse.
“I think the most likely thing is something along the lines of a political cataclysmic event like Brexit. In other words, the eurozone’s member countries are democracies and one sees increasing hostility to the euro, which is unfortunately spilling over to a broader hostility to the broader European project and liberal values,” Stiglitz told BI from his office in New York.
Stiglitz continued: “That’s going to be the end. What’s going to happen is that there will be a definite consensus that Europe is not working. The diagnosis will be to shed the currency and keep the rest, or that Europe is not working and a broader rejection — like in the UK.
“So my worry that this is precisely that kind of political event [something like Brexit] is that is what will be the catalyst for change.”
- Renzi: ‘This is my priority, my dream, and my nightmare’
- Italy is imploding in slow-motion — and it could signal the end of the euro
- Forget Brexit — Italy is poised to tear Europe apart
- CEO of the world’s oldest bank is reportedly under investigation for market manipulation
- The European bank stress test just revealed how awful things look for the world’s oldest bank
- The oldest bank on earth just agreed a rescue deal backed by JP Morgan, Goldman Sachs and Deutsche Bank
- Italy is putting €5 billion behind its weakest banks to spur new lending
Among the members of Donald Trump’s recently announced team of economic advisers is Stephen Moore, a distinguished visiting fellow at the Heritage Foundation and co-founder of the Club for Growth, which supports candidates who advocate slashing the tax rates of the top 1 percent.
Moore is particularly notable because he’s entertainingly honest about prioritizing money over Americans. In the 2009 documentary Capitalism: A Love Story, Moore said on camera that “Capitalism is a lot more important than democracy. I’m not even a big believer in democracy.” (I was research producer for the movie, which was directed by Michael Moore — no relation to Stephen.)
Stephen Moore is also, like Trump, a charlatan. After a guest op-ed under his byline in the Kansas City Star contained glaringly false statistics, the paper’s editorial page editor vowed that she would never run anything by Moore again, and that any other submissions by Heritage Foundation staff would be fact checked by the Star. (Moore’s errors were discovered by Star columnist Yael Abouhalkah, who is my cousin.)
But of course Trump won’t pay any price for choosing Moore as an adviser, since their mutual distaste for democracy and affection for general chicanery are shared by many other people at the top of the U.S. political system.
Amy Goodman speaks to Rolling Stone journalist Matt Taibbi about Barclays Bank agreeing to pay $100 million in a settlement with 44 U.S. states for rigging Libor, as well as Donald Trump’s speech at the Detroit Economic Club where he announced his economic plan and team, which includes Henry Paulson. Taibbi also goes over Trump’s stating that he would reject the Trans-Pacific Partnership and renegotiate trade deals including NAFTA. (Democracy Now!)
When you woke up this morning, chances are your morning routine was touched in some way by a private equity firm. From the water you drink to the roads you drive to work, to the morning newspaper you read, Wall Street firms are playing an increasingly influential role in daily life. Amy Goodman and Juan Gonzalez speak to reporter Danielle Ivory, one of the contributors to the New York Times series on the subject of the increasing role of private equity in the daily lives of Americans. (Democracy Now!)
- This Is Your Life, Brought to You by Private Equity
- How Private Equity Found Power and Profit in State Capitols
- When You Dial 911 and Wall Street Answers
- How Housing’s New Players Spiraled Into Banks’ Old Mistakes
- What Can Go Wrong When Private Equity Takes Over a Public Service
- A Primer on Private Equity
Had you told Bob Diamond that Mervyn King was off to work for a bank, you’d have got a snort of disbelief.
Lord King, former governor of the Bank of England, was notoriously disdainful of banks, keeping his contact with them to a minimum.
He particularly abhorred investment banks of the kind built by brash Americans, like Mr Diamond at Barclays.
His experience of the financial crisis, and the scandals that emerged in its aftermath, only hardened his resolve to drive an overhaul, particularly at Barclays. Following the Libor rate-rigging scandal in 2012, he ousted Mr Diamond.
A few years on, Lord King has apparently softened. As the Financial Times revealed on Friday, he has emerged as a senior adviser to Citigroup. Lord King did not respond to a request for comment, so we can only guess at his motives.
A major high street bank has paved the way for the introduction of negative interest rates for the first time in Britain by warning customers it may have to charge them to accept deposits.
The warning by NatWest was made in a letter changing the terms and conditions for the bank’s 850,000 business customers, which range from self-employed traders, charities and clubs to big corporations.
It could mean that an account holder with £1,000 in a NatWest account could see that shrink to £999 or less the following year as the bank charges a negative rate of interest.
In its letter to customers, NatWest said: “Global interest rates remain at very low levels and in some markets are currently negative. Dependent on future market conditions, this could result in us charging interest on credit balances.”