The pandemic has been a nightmare for banks and the government. However, it was a national crisis and the goal was to get the money out.
Yet when one looks at the detail of the charges leading to the NatWest money laundering fine of £264.8million, involving dustbin bags of cash arriving at 50 branches across the country, the mind boggles.
Fowler Oldfield was the only established Bradford jeweller when this case emerged. It was obvious that it was an inside job.
Fined: Dustbin bags containing hundreds of millions of pounds in cash were delivered to some 50 Natwest branches across the country
We now know the fraud was committed by branches in Bradford and Southall. This makes it clear that managers failed to use proper procedures or even conduct a smell test.
The NatWest laundering was not like that of the HSBC, where drug money was in secret Mexican branches.
In Bradford, a jeweller and gold dealer, which turned over £15million a year, was paying in sums of £1.8million day over several weeks in 2013. It was the largest and most successful business in the region.
The Southall branch received cash deposits of £42million between January 2015 and March 2016.
As anyone who has sought to withdraw £1500 cash to pay for building work will know, it is like squeezing water out of a rock.
Nobody in Southall seems to have noticed. This didn’t stop the bank’s QC, John Kelsey-Fry, from claiming ‘it did not escape the bank’s system, it did not go under the radar,’ when it clearly did.
NatWest’s only defense is the fact that, after Fred Goodwin had almost bankrupted it, survival was the main priority during the period following the financial crisis.
We only know a part of this story, as payees, who are allegedly part of a criminal scheme, have not yet had their day in court.
The lack of detail and examination in this episode makes it less easy to sympathize with the banks, who complain about creating safety nets for fraudsters by compensating victims of push-payment fraud.
Do not cry for the wolf.
Buik Fayre
It’s all about stories of City resilience. David Buik, an old friend of mine and the Square Mile’s most distinguished 59 year-old. Now he is retiring his bowler hat. It was a wonderful surprise to get an email.
His missive to his friends recounts how he began his career as a merchant banker at Philip Hill in those days when New York was still ravaged by bomb sites from the Second World War.
His first task was to organise a cut in the dividend paid on Shell Transport & Trading bearer shares.
Shell’s move to reclaim its British heritage is quite admirable, as it loses its Royal Dutch title and David takes his step back.
Buik witnessed the destruction of the Old City in 1986 after the Big Bang.
This saw the end of most old-style UK investment banking institutions, SG Warburg, Morgan Grenfell, and Lazard, Schroder as a manager for funds, keeping the flag high.
Buik saw the decline in the number of stockbroking firms from 400 to just a few. The intermediaries that stock jobbers used and discount houses were also gone. Market makers are taking their place.
Other transformations were the mass arrival of overseas banks in London after it became the world’s centre for raising dollar denominated loans.
He selects only a few of his heroes. He cites Michael Spencer as one of his heroes, who founded Icap and brought derivatives trading to London. It is the trade that President Macron longs to take.
Admiration is also shown for Lord King, the former governor of Bank of England and Paul Tucker, their calm and skillful management of financial crisis.
Buik’s big hope is that the new crew of smaller broking houses, such as Numis and his own beloved Panmure Gordon, grab a share of the pie controlled by Wall Street giants JP Morgan, Goldman Sachs et al. All of us can raise a glass to this.
Streaming riches
Britain’s creative industries are the seasonal gift that keeps on giving.
Data shows that movie and TV production for streaming services in the UK climbed in 2021 to £5billion, more than double that before the Brexit vote, helped by tax rebates.
There’s a good statistic for a Zoom-age quiz.