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  1. Wealth
July 16, 2012

Break Up Bust Banks

By Spear's

The obvious solution is for the markets to step in and put Barclays out of its self-inflicted misery, before the politicians make their next false move

It was the bankers who created the Global Crunch in 2008 as they pursued bad lending and investments in order to plump up their bonuses. They bust the world economy, but for some reason the bonuses went on, incredibly, more often than not paid for now by taxpayers.

Now it has emerged that around twenty of the top banks in the world ripped off everyone else by rigging the LIBOR rate, meaning they raised the cost of money to all their customers. It must be potentially the biggest rip-off in history. And as these crooks are thrown out of their jobs, they exit complete with bonuses, pensions and share options, as they negotiate their Golden Hellos at the next rip-off bank in line.

Barclays has been left reeling from Liborgate and other scandals that have engulfed its now depleted executive board, chaired by the former would-be corporate suicide Marcus Agius, Definitely Not Marcus Aurelius, he.

The obvious solution is for the markets to step in and put it out of its self-inflicted misery, before the politicians make their next false move. A bid at just above the much-reduced market capitalisation could split the carcass into the former UK commercial bank and a US casino bank, complete without Bob Diamond.

Lloyds-HBOS could be split up by an ordinary kitchen knife, as the four constituents would fall deliciously off the bone at the merest touch: Lloyds can go back to being the only UK bank doing business in England, which was where Sir Jeremy Morse left it, with a value four times higher than now, after its senseless acquisitions, the worst of which was sponsored by the man named after the colour Brown; Bank of Scotland can retreat to the Mound and lick its wounds and calculate the cost of hubris; the building society that gives you extra can retreat to Halifax, having absorbed the old Cheltenham & Gloucester as a consolation prize; and Scottish Widows can be put out of the misery of its dying life assurance business by being eaten whilst still just alive by the Resolution Trust, an animal with a stomach designed exclusively for this purpose.

All it needs is one shareholder to propose a four-way return to existing shareholders and they will all be the richer. As a UK-taxpayer, I would vote for that without a second thought.

RBS and its senseless ABN investment banking acquisition, now almost wholly-owned by the UK taxpayer, should be put down, and left with its US Citizens’ Bank to the US litigators to pick over, leaving its valueless Scottish branch business to rot and choke the climes of Alex Salmond’s would-be independent New Soviet Skottisch Republik.

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NatWest, on the other hand, could be returned to England free of US-lawsuit liabilities to provide more much-needed banking competition to a reborn Lloyds. While the UK taxpayer is looking at a £30 billion+ write-off in any event, Gordon Brown should be made to write a course for Scottish universities on why saving bust banks is bad business and bad for pension funds, savers, taxpayers and everyone else too.

And the former directors of RBS and Lloyds-HBUST and the hapless regulators should all go to prison and have the key thrown away, thus at least saving something for the long-suffering taxpayers on the cost of porridge.

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