Tuesday, 10 September 2013

TSB - Credit where credit is due?

This week brought the final liberation of TSB from the Lloyds brand name but not much else. The spin-off of 631 branches of Lloyds-TSB under the old trade name is hopefully the start of a trend towards breaking up and slimming down the High Street banks from the behemoths that brought us the 2008 financial meltdown and its ever-present legacy of economic lassitude.

This is the best article we saw on the spin-off: 

http://www.theguardian.com/money/blog/2013/sep/09/back-to-the-future-loyds-tsb-different-bank

This story gives hope that the new entity, which will rank 8th out of the gate will bulk up (maybe feasting on the stricken Co-op) and give the majors a run for their money:

http://www.telegraph.co.uk/finance/10297206/TSB-could-add-another-bank-says-chief-executive-Paul-Pester.html

It would be quite an irony as the TSB business had once been touted for sale to the Co-op Bank before its own ailments were very publicly exposed. 

Breaking up the banks and some sort of restoration of the situation before Labour (and before that, the Major government) let them all merge in a mating fervour should be a prime LibDem policy and we should be claiming credit for this latest move rather than having it explained away as being "due to EU competition authority pressure". With Vince Cable in the driving seat (ostensibly) this should be seized upon as a feather in our cap. Or is it? While party members may see this (and the upcoming recreation of Williams & Glynns) as "just what we were thinking", well may we ask why this wasn't driven harder by Vince, enunciated more forcefully by the other party spokespeople and moreover, carried out earlier in the current Coalition government.  The process has been like watching paint dry. 

The path is not over yet, there is mileage to be made and action to be achieved. Firstly, the moribund RBS should be stripped down and flogged off,,, ASAP. Vince muses here on this being more of a long-term project:

http://www.thisismoney.co.uk/money/markets/article-2389395/No-RBS-sell-years-warns-Vince-Cable-increasing-chances-bank-broken-up.html

However, spinning out W&G is only part of the task. This deal essentially encompasses just the non-Scottish branches of the old RBS. What about setting NatWest free also? And what about a policy that head offices of the new TSB and W&G be regionally located creating managerial jobs in the provinces rather than just more bloated fat cats in the towers of Canary Wharf. And while we are at it, what about some privatisation of the rump RBS with the public (who bailed the wretched beast out) getting first bite of the apple rather than Goldman Sachs and their favoured institutions? 

Vince needs to be grasping the nettle and claiming the credit,, even if post-facto.. for breaking up the banks.


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