Fascinating stuff, and I was completely unaware of any of it. I moved all my accounts to RBS back in ’08 because I liked the idea of a state-owned bank… *sigh*

You win some, you lose some, I guess.

Also, my work is setting up a pension scheme and, being the nice man I am, I’m looking at ‘ethical’ pension funds. Stakes in Tullow are right up there. Odd.

How’s the litigation going on this one?

If you want to make it illegal to lend money to (or invest in) things that increase global warming, go ahead.

But that would be a matter of law, and should apply to all banks, not just RBS.

‘…and they do it with taxpayers’ bail-out money. ‘

The ‘ taxpayers ‘ did not actually bail-out RBS. The gilts market bailed-out RBS because the government borrowed the money to buy the equity shares. When the Treasury sells the shares they will use the proceeds to redeem the debt. So, although it is fair to say the shares are publicly owned it is not accurate to say it was taxpayers money. The government was recapitalising the bank so the injections of funds go to increasing the Tier 1 capital of the bank. The money is not lent out because it is capital not liquidity or reserves.

“When Tullow moved in with their partners Heritage Oil, they decided to arm both sides in the conflict as they mobilized around the area where oil was discovered.”

Err, yes you can libel a company and yes, unless you’ve got some very convincing proof, that could be taken as libel.

The other problem is you continual description of RBS lending “our” money.

You do realise how banks work do you? They take in deposits and send them out again as loans?

What they don’t do is lend out the shareholders’ funds. They lend out the deposits, and the deposits don’t belong to the shareholders, they belong to the depositors.

Yes, it’s true that without “our” money RBS wouldn’t be lending anything to anyone as they’d be bust. Yes, it’s true that they’re using our money to enable them to make these loans.

But what they’re not doing is lending our money to these priojects. They’re lending depositors’ money to these projects.

Oh, and “banking expert Nick Silver”?

http://www.sustainablefinancialmarkets.net/participants/nick-silver/

Looks like an actuary to me, not a banker.

Worstofall couldn’t bear to see someone criticising a bank.

I’m afraid you lost me when you assumed oil exploration causes climate change, without noting that lack of oil causes (at present) a serious resource issue for the planet (which tends to cause poverty etc).

Still, from the beliefs you clearly hold, your position seems logical so good luck with your campaign. I just can’t support it myself.

“RBS is Europe’s biggest financer of the fossil fuel extraction driving climate change”.

It wouldn’t be so bad if it was financing only fossil fuel extraction which ISN’T driving climate change, you know that good sort of fossil fuel which is used only for good things, like manufacturing the PC on which are reading this, or the sort which is used to power the aircraft which take Sunny Hundal on his holidays! Now, those are noble uses of fossil fuel, and therefore, don’t contribute to climate change!

Personally, I’d much rather have Canadian tar sand-derived oil than Equatorial Guinea offshore oil. But that’s just me. Hurry up, electric cars!

Tim – see here:

http://peopleandplanet.org/navid9384

and specifically –

“The United Nations Mission in Congo (Monuc) reported later that year (2007) that Tullow’s partner in the license, Heritage Oil, owned by former mercenary fighter Tony Buckingham, had donated speed boats to the FARDC (Congolese national army) in March and had also been responsible for the delivery of 30 Land Rover jeeps to Bunia, which were then distributed to local commanders across the region.”

If they wanna sue me for repeating UN findings, bring it on.

“If they wanna sue me for repeating UN findings, bring it on.”

Well, yes, except that “providing transport” isn’t the same as “arming”.

Oh, and the other thing….I was rather more worried about the site and Sunny than I was you personally.

ar·ma·ment (ärm-mnt)
n.
1. The weapons and supplies of war with which a military unit is equipped.
2. All the military forces and war equipment of a country. Often used in the plural.
3. A military force equipped for war.
4. The process of arming for war.

I think it’s pretty clear that a speed boat carrying soldiers counts as the supplies with which a military unit is equiped.

“It’s not the car that kills you, it’s the nutter on it with an uzi”

@14. I’ll agree with you when arms control discussions and military sanctions start talking about Land Rovers.

4 and 5 will be kissing in a tree soon.

Fucked up Libertarian … sorry, classic Liberal fights with Tory toad. Classic!

To the OP:

This Conservative government will do nothing but try to sell the bank back to whomever at the lowest possible price so they have a deficit to reduce and money in the pocket of their City friends.

But what they’re not doing is lending our money to these priojects. They’re lending depositors’ money to these projects.

It’s publicly owned and hence the point applies. I find it amusing Tim W that when someone makes a broad point – you try and find fault by trying to pick up semantic points than address the issue.

Nick – in fact the Huffington Post ran a fairly successful campaign in the US encouraging people to move their money out of big banks and into local banks.

The idea that we cannot put pressure on RBS to own up to the destruction it’s money is causing is absurd.

“It’s publicly owned and hence the point applies. I find it amusing Tim W that when someone makes a broad point – you try and find fault by trying to pick up semantic points than address the issue.”

Oooookaaaaaay…..

“Nick – in fact the Huffington Post ran a fairly successful campaign in the US encouraging people to move their money out of big banks and into local banks.”

Err, that is, they told depositors to move their money elsewhere so that depositors’ money will not be lent to big bad oil companies.

Which was rather my point, wasn’t it? That it’s depositors’ not shareholders’ money that gets lent on?

That it’s depositors’ not shareholders’ money that gets lent on?

Firstly – a lot of people do bank at RBS, so it could still be referring to their money. Secondly, the company is publicly owned – hence we own it. Hence, we can make some noise about the decisions mgmt takes. Hope that’s clearer.

“Secondly, the company is publicly owned – hence we own it. Hence, we can make some noise about the decisions mgmt takes.”

Umm, no it ain’t publicly owned. It’s majority publicly owned. Not the public through the taxpayer still owns 16% of it.

And it’s very naughty indeed for one group of shareholders to insist that management do one thing for non fiduciary reasons, something which might damage the economic interests of the minority shareholders.

If the govt went and bought another 4%, taking the stake to 90%, then they could indeed impose certain lending policies just because they wanted to. But while that minority remains over 10% we, the taxpayers, do not have the right to dictate how the company operates.

State-owned bank > mutual bank. At least, all else being equal. In my fuzzy little head of littleness.

21 – Tim,

a) the companies act is pretty clear that there are a list of criterion which the board must take into account. It’s true that equity between shareholders is one of these, as is fiduciary duty. There are others too though. Obligation to the broader community, and more.

b) So, because of the requirement for equity between shareholders, you are saying that the 16% should get to over-rule the 14%? UKFI is, through it’s stake in the bailed-out banks, clearly a universal investor. When RBS externalise costs, they often do so onto other companies in whom UKFI have a stake. If UKFI have a fiduciary duty to the government, then they must prevent these externalisations.

c) The Isreali’s ban Landrovers from entering Gaza on the grounds that they are a weapon of war.

c) The Isreali’s ban Landrovers from entering Gaza on the grounds that they are a weapon of war.

Well, that explains the school run, at least.

“So, because of the requirement for equity between shareholders, you are saying that the 16% should get to over-rule the 84%?” (I’ve corrected the typo).

No, not at all. What I am saying is that the financial interests of the 16% cannot be ignored by management when they listen to the declared interests of the 84%.

That’s actually why we have such limits….so that minority shareholders don’t get the shitty end of the stick.

On a larger scale, that’s why we have things like constitutions, human rights laws, to put a brake on “majority rules”.

At the risk of a Godwin’s violation, no, we don’t allow a simple majority (while we do, in company law, allow an overwhelming majority) to screw those not in the majority. Just like we don’t allow, through those other laws, allow the majority to screw over/kill/deport/disenfranchise the kulaks/Jews/Gypsies/bouregeois.

A very great deal of the law of this and other civilised countries is based upon this very idea. Just because the mob, the Demos, are baying for it, there are still things we don’t do.

Tim: It’s very naughty indeed for one group of shareholders to insist that management do one thing for non fiduciary reasons, something which might damage the economic interests of the minority shareholders.

“Non-fiduciary”. Not conforming to the nature of the legal trust (i.e. the holding of something in trust for another).

First, remember that we the people have bailed out a failing bank with a large sum of money, probably saving its life. We have put ourselves at risk by delivering that money, and also incurred important opportunity costs.

By fiduciary Tim means that the RBS decision makers have to maximise the profits of RBS.

This is an outdated concept, based on a narrow view that puts no value on externalities. It needs to be challenged and changed.

RBS have drawn up a short term business plan for these loans. Our case is that in the long term, this business plan will incur external costs that far outweigh the short term profits. We disagree with this business plan, and as stakeholders and as shareholders we wish to change it, and we applaud our colleagues in the Climate Camp for their vanguard action in an important movement that will end with corporations operating in an ethical and legal framework. The day of the privateer is coming to an end.

“This is an outdated concept, based on a narrow view that puts no value on externalities. It needs to be challenged and changed.”

Should externalities be valued? Sure.

Should the externalities of climate change, of CO2 emmissions be valued, incorporated into the market pricing which drives decision making?

Sure.

We can do that through a carbon tax or a cap and trade system. I personally prefer a carbon tax but so what?

What the “externalities must be valued” isn’t is an argument to screw over minority shareholders: nor is it an argument to treat one bank differently from others.

If you were shouting, demoing, demonstrating, for the idea that CO2 emissions should be carrying the $80 a tonne tax that the Stern Review implies I’d be right with you. Indeed I am with you on that.

However, fucking over the Common Law and constitutional protections for minorities, no, sorry, fuck off.

Tim

Glad to see that you are OK with internalising carbon costs. Good.

The reason that we are concentrating on RBS is that we are shareholders in it. OK?

You need to expand on this L “What the “externalities must be valued” isn’t is an argument to screw over minority shareholders” and “fucking over the Common Law and constitutional protections for minorities, no, sorry, fuck off?.. I think I know what you are objecting to, but it is not clear.

“I think I know what you are objecting to, but it is not clear.”

It really isn’t that tough. No, you don’t get to tell management of RBS that they should not do profitable business because you don’t approve of it. That would be screwing over the minority shareholders.

Yes, you do get to argue that externalities must be internalised, because the law is quite clear. You can indeed campaign for absolutely any political measure you wish. But you don’t get to screw over minority shareholders just because you (and “you” don’t of course, the majority of the country, the majority of those 86% shareholders, as recent opinion polls put up here show, don’t give a shit) think it a clever way of reaching your political goal.

Tim

I am glad that you agree that we can indeed campaign for absolutely any political measure you wish.

Our politics is based on the premise that it is not a good idea to sh*t in one’s own bed.

You seem to be arguing that corporations should be allowed to sh*t in our communal bed. You seem to be asking that ethics, reason and an ecological view of things must not enter the sacred hall of corporate decision making, which should be purely profit-driven.

We are saying that broader reasoning should prevail. Further, we are arguing that ecologically minded business is profitable business, because the human economy is ultimately based on ecology.

We the people gave saved RBS, Lloyd’s and HBOS, and we take exception that amy one of them should use the life we gave them to take away the livelihoods both of our friends who live in the vicinity of these new oil fields, and also of our descendants,

At the risk of annoying Will Rhodes who thinks I am a ‘ Tory toad ‘ let me be a pedant again. If It is the intention of the OP to attack an institution it probably helps to do so accurately. Claiming RBS are lending taxpayers money is just not true.

The 84% figure is an economic interest. The state owns 70% of the voting share capital in RBS which are in the form of ordinary shares. The other 14% are B shares which are non-voting.

If there are concerns about RBS corporate policy why not buy some shares and attend the AGM and tell them about your concern?

@31

Who, in your pedantic opinion, owns the State?

Mr S. Pill, that part wasn’t really about anything said by the OP. Tim Worstall and Richard Lawson were discussing the percentage of the shareholding.

I was just using the ‘ state ‘ as a figure of speech. Legally there is no such thing. The shares are owned by the Treasury which legally is the monarchs as in HM Treasury. However, I think in 2010 most people understand that effectively means publicly owned.

The last government anticipated problems like this and that is why they set up UKFI to manage the shares at arm’s-length from government in order to prevent groups and government ministers interfering in the commercial decisions of the banks which they owned or part-owned.

@33

So what do you mean when you say RBS isn’t using taxpayers’ cash? If “the state” (ie: all of us folks) owns shares and the shares make money and the money is used for nefarious ends, doesn’t that go against what yr saying @31?
Not being disingenuous I genuinally don’t get what point yr making.

“You seem to be arguing that corporations should be allowed to sh*t in our communal bed. You seem to be asking that ethics, reason and an ecological view of things must not enter the sacred hall of corporate decision making, which should be purely profit-driven.

We are saying that broader reasoning should prevail. Further, we are arguing that ecologically minded business is profitable business, because the human economy is ultimately based on ecology.”

Quite wonderful.

Now, how is all of this best done? How is the communal bed best unshat upon?

Actually, we’ve a great big report all about that out there. Called the Stern Review. We’ve also got a couple of century’s worth of the collective ponderings of those strange creatures, economists.

You will no doubt be surprised to know this but this is a problem, externalities, which has been thought about. Alfred Marshall, the father of neo-classical economics, first raised the point when he was Professor of Economics at Cambridge in the 1890s. His successor in the chair, Arthur Pigou, descibed the solution in the 1920s. Applied to this particular externality, emissions, the answer is a carbon tax.

Which is why this is what the Stern Review recommended. A carbon tax. Which is why just about every economist out there who has even vaguely looked at the problem, including such as Greg Mankiw (he was George Bush’s chief econmist for a time), Paul Krugman and, well everyone, says that the solution is a carbon tax.

(Please note that in this sense cap and trade is a variation of a carbon tax)

So, let’s have a carbon tax.

The reason they all say this is that there are millions upon millions of companies out there. It isn’t actually possible to go around each and every one of them and convince them to first analyse their emissions and then convince them to reduce them. What we want to do is change just one price in the market, the price of carbon, and then we can rely upon their being profit maximisers and they will go and look at their emissions and reduce them.

The reason the economists (and therefore I) are deriding your shouting about RBS isn’t because we don’t think there’s a problem, nor that there shouldn’t be something done. Rather, it’s because we all think that what you’re trying to do about it is ludicrous.

For example, there are some 450 banks in the City alone. If RBS stops funding oil shale, one of the others will start doing so. You therefore have, in just one square mile, to have this fight 450 times.

Vastly simpler to spend all that effort on making sure that everyone has a carbon tax, no?

I’m not arguing at all with your aims: I just think, for good reason, that your methods are ridiculous.

I agree that putting a price on carbon, either through a tax or a trading system, has an essential part to play in reducing emissions. But the argument against extracting oil from tar sands is not so much that more oil = more emissions = more warming, it’s more about the catastrophic consequences for the local environment. Of course that’s something which could also be prevented by government action but the government of Alberta seems hell bent on promoting rather than limiting oil extraction.

Tim

We are agreed on a carbon tax, or preferably in my case, individual carbon quotas, although I would settle for a tax, because that will come in sooner. We need action.

The point at issue is that we the people, through our Government, have helped RBS to survive, and we have leverage on what the company does through our shares. We object strongly to RBS using our money (yes, borrowed from banks, but nevertheless our money, since loaned money becomes the property of the person who takes the loan) to wreck the biosphere both locally and globally.

It is a case of setting an example where we have the capacity to do that.

There is another issue at stake, the principle that corporations are free to do whatever is necessary (within such laws that apply, which are often weak in the face of expensive company lawyers) to maximise profits. We need a framework of laws which will apply to corporations.

In February of this year the Green Party convened a meeting of NGOs to draft an outline of what such laws would look like.
http://greenerblog.blogspot.com/2010/02/transnational-corporation-law-reform.html
The key point is that responsibility should flow in the same channels as profit, since corporations often try to avoid responsibility for any health, social or environmental damage that they do by devolving it to sub-contractors.

You still in UKIP? If so, please vote for Christopher Monckton for the leadership.
Thanks.
Richard

A fairly nutty list of desires if I may say so.

as to this:

“You still in UKIP? If so, please vote for Christopher Monckton for the leadership.”

If he gets in I’m out.

I rest my case, as Tim puts no substantive argument.