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I've got you...under my skin
I’ve got you…under my skin
Billionaire George Soros says the banking sector is a “parasite” holding back the economic recovery and an “incestuous” relationship with regulators means little has been done to resolve the issues behind the 2008 crisis.
“The banking sector is acting as a parasite on the real economy,” Mr Soros says in his new book “The Tragedy of the European Union” (Buy in the UK).
“The profitability of the finance industry has been excessive. For a while 35pc of all corporate profits in the United Kingdom and the United States came from the financial sector. That’s absurd.”
Mr Soros outlined how the problems that caused the Eurozone economic crisis remain largely unresolved.
“Very little has been done to correct the excess leverage in the European banking system. The equity in the banks relative to their balance sheets is wafer thin, and that makes them very vulnerable.
“The issue of “too big to fail” has not been solved at all.”
The proposed solution of a European banking union does not address the underlying problems, Mr Soros adds.
“A real danger to the financial system is the incestuous relationship between national authorities and bank managements. France in particular is famous for its inspecteurs de finance, who end up running its major banks. Germany has its Landesbanken and Spain its caixas, which have unhealthy connections with provincial politicians.”

In the UK, Execs at RBS and Lloyds, both saved by taxpayers, are in line for more gratuitous windfalls. RBS is handing out ridiculous sums despite making an £8.2billion loss last year. Executives at RBS, 81% owned by the public, pocketed £5.2m worth of shares today for work they did in the past.

But many of the same bigwigs will end up richer still after the bank revealed they could get as much as £18m in shares in up to four years’ time.

Critics branded the payouts “rewards for failure”. Among those set to be quids in is new chief executive Ross McEwan, who could get up to £3m in 2017, or even more if the bank’s share price has risen by then.

To rub salt into the wounds, Lloyds, also saved from collapse by a taxpayer bail-out, dished out £12.5m worth of shares to 10 bigwigs.

They include chief executive Antonio Horta-Osorio, who got nearly £1.7m in shares today, even after selling a chunk to cover a tax bill.

Lloyds, 33% owned by the taxpayer after a £20bn bailout following the financial crisis, made a £415m profit last year.

However, it has been left reeling from a near £10bn bill for the payment protection insurance mis-selling scandal.

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