Commentaries

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You are not a loan, RBS ads remind customers

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RBS/REPOSSESSIONIs the Royal Bank of Scotland softening up the public and politicians ahead of its results on Aug 7th with a series of newspaper advertisements telling us how many loans it is dishing out?

The 70-percent state-owned bank is expected to post a pre-tax profit of 1.2 billion pounds for the first half of the year, according to a Reuters poll of analyst forecasts. 

RBS is going to need to show British taxpayers that their investment is doing more than just helping the bank back into the black — particularly following criticisms that along with other banks it has not passed on the money the government has made available to it.

The RBS ads, carried in The Guardian newspaper, personalise the bank’s lending by naming some of the businesses it is supporting.

Managing incentives, UK banks edition

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Confused about the British government’s approach to its bank investments? You’re in good company. Consider the following statements from Royal Bank of Scotland and its main shareholder(emphasis is ours):

June 23rd: Sir Philip Hampton, chairman of RBS, on the £9.6m cash-and-shares pay package awarded to Stephen Hester, the bank’s chief executive:

Will Murray success at Wimbledon be RBS’s best return?

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Royal Bank of Scotland is not best known for backing winners.

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So the Scottish bank must be savouring Andy Murray’s run at the Wimbledon tennis tournament.

World number three Murray is one of the “sports personalities of present and past” sponsored by RBS during the heady days of Sir Fred Goodwin.

from Neil Collins:

Executive rewards: give the shareholders a veto

Do we really want to do something about executive pay? Here's a simple, elegant and transparent way to stop the gravy train: insist that no contract with any director can be binding on a company until it has been approved by its shareholders in general meeting.

The egregious example of Stephen Hester , the man who said that some rewards in banking were "way too high"  reveals the hypocrisy and runaway inflation in the boardroom. This is hardly surprising. The remuneration committee appoints remuneration consultants who dream up ever more exotic rewards, while encouraging candidates to demand them.

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