BNI0022
Written evidence submitted by Ivan Preston
This document is structured via the following sub headings:
- General - Concerns of UK / Northern Ireland citizen regarding the banking sector
- The Banking structure in Northern Ireland
- Purpose of the 2013 Northern Ireland Affairs Committee’s call for evidence on the banking structure in Northern Ireland in connection to the official NI Banking Enquiry
- Four NI Banks collaboration / collusions in reducing operating costs via unethical means
- Activities relating to the Four NI banks cost saving ‘initatives’
- Nature of collusions to which the ‘big four’ NI banks are complicit
- Overview
General - Concerns of UK citizens regarding the banking sector
The banking sector in general is one which has been a source of concern to many, not least with regards to the unprecedented levels of sharp practice, deceptions and fraudulent behaviours of recent times, much of which has been documented by many, including politicians and media, and re which most, if not all, came to the attention of the UK and Northern Irish public, not through voluntary disclosure and transparency of the banks, but through the actions of others.
It is the case that whistleblowing channels advised, or implied, by the banks via disingenuous published Corporate Social Responsibility Statements do not function as it is implied they do, a position which is indicative on one where the offender is also the ‘policing’ body, a position which for obvious reasons does not work.
Many cannot understand why regular laws which apply to the majority have not been seen to apply to those within the banking sector who set the corporate tone to which various deceptions and fraudulent behaviours (including bank officials providing inaccurate information under oath, falsifying of documents, etc), activities which at one time few would have thought banks would engage in, have prevailed, do not appear to apply to senior banking sector officials and executives, with questions asked by many as to why this may be.
Many UK citizens remain confused as to why ‘ordinary persons’ are subject to stiff punishment for what are often fairly minor misdemeanours, whilst bankers responsible for hugely significant misdemeanours impacting upon every man, woman and child in UK, appear to have got off scot free, usually with huge financial packages of one sort or another intact, hedging those individuals from the negative impacts their behaviours helped to heap upon the majority of the nations citizens.
There is evidence to suggest that operating principles possibly assumed to apply mainly to corporate tone setting senior banking executives may be more prevalent amongst some bank employees further down the corporate chain, as some employees, mindful of the state of the economy and equally mindful of their own perceived job securities and future promotion prospects seek to consolidate their own positions via enthusiastic and compliant adherence to dubious operating principles and aims of the organisations which employ them.
There have even been new (and annoying) industries formed on the foundation of banking sector sharp practices, with for instance, millions of people frequently harassed by telephone callers, pre recorded voice messages and SMS text messages relating to PPI, a sector which as stated, would not even exist had it not been for banking sharp practice on which it is founded.
Given the events of the past few years, some feel there is justification for an independent body to be established where all persons or organisations, not just from a customer perspective, but from all backgrounds where direct and negative impact has been encountered as a result of banking sector sharp practices, and where any party who feels such sharp practices should be exposed, can do so without fear of retribution brought about by any bank or combination of banks, or from any third party or parties engaged by any bank or banks in connection to same.
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The Banking structure in Northern Ireland
The Northern Ireland Affairs call for evidence into the banking structure in Northern Ireland is welcomed by many (as is the recently announced banking enquiry in the Republic of Ireland (ROI) to be held at future dates, those dates as yet undecided).
The reason why ongoing or pending banking enquiries across the island of Ireland may be considered to be of interest to citizens of Northern Ireland / United Kingdom is because in Northern Ireland (and to a lesser degree on mainland UK) two of the Irish pillar banks are significant players, those banks being Bank of Ireland and the AIB (Allied Irish Banks) owned First Trust Bank (AIB in UK), whilst the Royal Bank of Scotland owned Ulster Bank is a major player across both jurisdictions of Northern Ireland and ROI .
Of the 4 four ‘big four’ banks operating in Northern Ireland, one of them, Royal Bank of Scotland / Ulster Bank is 82% owned by the UK Taxpayer / UK Government following a circa £45 billion bail out in 2008, whilst following similar bailouts also in 2008 in ROI totalling circa €30billion, Bank of Ireland is partially owned by the ROI Taxpayer / ROI Government and AIB, owner of First Trust Bank in Northern Ireland is moreorless in full ownership of the ROI Taxpayer / ROI Government.
In Northern Ireland, both ROI banks, Bank of Ireland and First Trust Bank, are hugely influential in the banking affairs of Northern Ireland, are as Ulster Bank and Danske Bank (Northern Bank) a group of four which traditionally are recognised as ‘the big four’ in Northern Ireland banking, with one of the ROI banks, Bank of Ireland also additionally influential in NI and UK in connection to UK / NI Post Office savers via the fact that the bank is tied in with the Post Office (all NI and UK Post Office account holder statements are, unbeknown to many account holders, actually produced in Dublin, not in UK as many believe to be the case, with Post Office statements produced on Bank of Ireland premises and, in order to acquire a UK postmark on all envelopes bound for NI or UK Post Office account holders, transported via road each day from Dublin to Belfast in order to acquire a UK postmark for every NI / UK bound envelope, delivered into the main UK Royal Mail postal facility for Northern Ireland at Mallusk, Co Antrim), a position which previously, for reasons known to the parties in question, some UK savers, UK taxpayers, UK politicians, relevant trade union officials, etc, queried or raised concerns.
Of the four banks which make up ‘the big four’, in Northern Ireland, only one bank therefore is actually UK owned, whilst as stated, two are ROI owned and one, Danske Bank, Danish owned.
Thus banking in Northern Ireland is hugely affected, and to a lesser degree re UK, by influences from outside of Northern Ireland / UK.
Whilst there may be areas of general collaboration between banks within the UK banking sector, some understandable and acceptable perhaps, some not so i.e. Libor rate manipulations, etc, within the structure of the ‘big four’ banks in Northern Ireland there appears to be areas and levels of collaboration, or collusion, which may not ordinarily be expected to prevail in any circumstances, but which not only do such collaborations and collusions prevail, connected to the position are elements of sharp and unethical practices, and from which persons in Northern Ireland are victims of the practices referred to and from which the ‘big four’ NI banks unethically derive financial benefit.
These practices are referred to below under several sub headings.
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Purpose of the 2013 Northern Ireland Affairs Committee call for evidence
on the banking structure in Northern Ireland Banking Enquiry
The purpose of this enquiry is referred to in official parliamentary terms of gathering ‘evidence on the banking structure in Northern Ireland’, and referred to in other areas i.e. media sources such as BBC News as ‘a far reaching enquiry’ and ‘NI banking practices under scrutiny’, etc.
There is no doubt that a number of areas require close attention, some of these areas very much focussed in the minds of the public, and thus unavoidable (which may be why the bank(s) concerned have referred to same within their published submissions to the NI Affairs Committee) i.e. the Ulster Bank IT debacles, rural and urban branch closures and the impact this has on those affected, etc.
However, whilst volunteering information in relation to issues which the 4 NI banks are unable to influence the committee in terms of whether those issues are to be discussed or otherwise, there are areas of concern re which it is noted that none of the NI banks have made any reference to but which nevertheless need to be addressed, possibly by a body as influential as the NI Affairs Committee.
Despite implied principles in Corporate & Social Responsibility Statements and in other areas, banks are not known for their ‘openness and transparency’, with the general public becoming aware of most, if not all banking misdemeanours not as stated previously through well meaning and ethically minded disclosure by the banks, but through the efforts of others.
I suggest that it is important that the NI Affairs Committee looks not only at those issues which the ‘big four’ NI banks refer to within their submissions to the Committee, the published submissions covering what most observers would have expected from the banks, but as is the case in investigative procedures, often it is what isn’t voluntarily referenced which requires some element of investigation.
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Four NI Banks collaboration / collusions in reducing
operating costs via unethical means
A major part of the ‘structure’ of the traditional main ‘big four’ Northern Ireland banks (Bank of Ireland, Danske Bank, First Trust Bank and Ulster Bank) in relation to the retail branch and other offices networks throughout Northern Ireland is a sub structure relating to combined operating costs relating to the whole across Northern Ireland networks of the ‘big four’ NI banks, the purpose of which is to reduce individual / sole bank operating costs in relation to same and thus to derive the financial benefit from the collaboration referred to.
However, it is in this particular area in which the 4 NI banks have not only collectively engaged in highly dubious and unacceptable practices of a nature which no ethically operating organisation should ever engage, but in doing so it could be suggested that the circumstances have rendered the UK Taxpayer / UK Government (and the ROI Taxpayer / ROI Government) complicit in those same highly dubious, unethical and unacceptable practices.
There are relationships which have or continue to prevail(ed) which would be considered by many to be ‘inappropriate’ and unacceptable, for reasons re which it must be assumed that the resultant financial benefits to each of the ‘big four’ NI banks were the overriding factor regarding why the relationships prevailed / prevail, but in connection to which, in consideration of a number of relevant factors, further benefits to individuals within ‘big four’ NI banks cannot be discounted.
Practices referred to run contrary to those principles and standards referred to in a number of UK Government publications, including the most recent and highly relevant September 2013 HM Government published document entitled ‘Good Business - Implementing the UN Guiding Principles on Business and Human Rights’ (ref: Cm 8695), in which it is stated that this document, foreworded by The Minister of State for Business Innovation and Skills and The President of the UK Board of Trade, Right Honorable Dr Vince Cable MP and The Secretary of State for Foreign Affairs, Rightt Honourable William Hague MP, is ‘Presented to Parliament by the Secretary of State for Foreign and Commonwealth Affairs by Command of Her Majesty (Queen Elizabeth II)’.
Of particular interest within this document is section in which reference is made to ‘the activities of UK State-owned, controlled or supported enterprises’, a group to which the bailed out and currently circa 82% UK Taxpayer owned RBS, owner of the NI / ROI operating Ulster Bank, belongs.
Within the banking sector there is no question that highly paid regulators did not regulate and law enforcement and Serious Fraud Office officers failed to enforce and to hold to account, with some of those who failed in their highly paid roles going on to ever better paid positions within those organisations they failed to regulate or hold to account.
However it cannot be overlooked that it was banks which systematically committed frauds and various deceptions, aided and abetted possibly by ‘sympathetic’ and / or compliant entities from within ‘the system’.
It would appear that where one, a combination of or all of the ‘big four’ NI banks and RBS have engaged in sharp practice and are challenged in connection to same, it is routine to, where responses are provided, in connection to dubious procurement and related ‘processes’, to use references such as ‘robust’ and to refer also to ‘independent audit(s’) and ‘investigation’ processes, with a consistent lack of evidence that such processes are actually carried out, a position which is followed by a consistent refusal to address any issues to which disingenuous and misleading information is provided.
To date the citizens of UK and Northern Ireland, and indeed in a number of jurisdictions around the world, have seen little or no evidence of those within the banking sector who have committed or been complicit to sharp practices, deceptions, fraud, etc being held to account, with many of those individuals, or the banks they work for, continuing to operate along a very much business as usual basis, such is the lack of concern some appear to have regarding being held accountable for any misdemeanours they may be connected to or complicit in.
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Activities relating to the Four NI banks cost saving ‘initatives’
Northern Ireland banks and Royal Bank of Scotland (owner of Ulster Bank) have demonstrated that they routinely engage in what I refer to as ‘unusual’ procurement practices and other highly irregular, collusive and unacceptable practices related to same, and have done for some time, with a collusive and standard ‘taking of a blind eye approach’ to immoral and illegal practices in return for unethically derived financial benefit prevailing in some quarters.
Northern Ireland banks and Royal Bank of Scotland have demonstrated that they routinely ignore their own published Corporate & Social Responsibility Statements in return for such unethically derived financial benefit, thus rendering those statements to be inaccurate and misleading to customers, to persons considering opening or moving bank accounts with ethical considerations to the fore, and to other entities.
Those banks also systematically mislead organisations to whose principles they imply that they adhere to i.e. UNI Global Union, etc and other organisations and persons which / who may be influenced by such implied alignments to high and ethical principles and standards, etc.
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Nature of collusions to which the ‘big four’ NI banks are complicit
A Northern Ireland bank, or a combination of Northern Banks or all four of the main NI banks (Bank of Ireland, Danske Bank, First Trust (AIB / Allied Irish Banks)Bank and Ulster Bank (Royal Bank of Scotland) have engaged and continue to engage in the following:
- Generally inappropriate procurement related activities.
- Complicity / collusion in respect of exploitations and abuse of service contractors, including threats, Health
& Safety risks to individuals working at / for the ‘big four’ NI banks and the general public, systematic breaches
of UK Working Time Directive legislations, systematic breaches of UK Minimum Wage legislations, etc, from
which all of the 4 ‘big four’ NI banks, whilst taking a blind eye approach to the above, unethically derive
financial benefit.
- Deceiving potential ethical suppliers by implying standards required which are subsequently routinely ignored in relation to third party engagement in highly unethical and unacceptable labour related and other matters, the prevalence from which the NI banks unethically derive financial benefit.
- Aside from interbank collusions, internal sole bank collusions going to the senior echelons i.e. to CEO level, of the banks concerned, with evidences of senior bank executives i.e. CEO’s chosing to take a ‘blind eye approach’ to highly unethical and unacceptable practices to which the organisations they head are complicit and from the prevalence of which their organisations, and possibly themselves and other bank officials via i.e. financial performance related incentives, etc, may unethically derive financial benefit.
- Inappropriate threatening and intimidating behaviours believed to be connected to attempts to suppress disclosure of information relating to unethical activities referred to and interbank and internal individual bank collusions.
- Inappropriate utilisation of external third party entities in connection to internal NI banking sector related agenda(s), connected to which further threatening and intimidatory behaviours have been / are prevalent and connected to attempts to suppress disclosure of information relating to unethical activities and interbank and inside individual ‘big four’ NI bank collusions.
Aside from any financial benefit’ such arrangements may provide to any or all of the ‘big four’ NI banks, in consideration of other factors relating to banking sector behaviours within the ‘big four’ NI banks, the possibility of further, possibly undeclared, benefits cannot be discounted in connection to procurement related events.
- Maintenence of relationships many would consider to be inappropriate i.e. where there has been connection to illegal / criminal activities, and a bank or banks have chosen for some reason to take a ‘blind eye approach’ in relation to same, and the prevalence of ‘unusual procurement related activities’ in relation to such relationship(s).
- There are 4 different levels of types of collusion relating to the 4 NI ‘big four’ banks which have prevailed as follows:
a) General ‘Interbank collusions’ between the 4 NI ‘big four’ banks
b) Collusions between individual banks, a number of banks or all 4 banks and third party entities, in relation to tender / procurement related issues
c) Collusions between individual banks, a number of banks or all 4 banks and third party entities, in relation to suppression (gagging) of disclosures relating to procurement related and connected issues
d) Internal sole bank collusions between a number of officials or departments, going up to Chief Executive level, including in relation to brushing under the carpet details brought to the attention of Chief Executives and others regarding the unethical and unacceptable practices referred to, a position which is difficult to reconcile with actions expected to be executed in connection to the sort of sharp practices this communication alludes to as referred to within relevant regulatory body publications, and reality.
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Overview
Whilst this communication relates to a specific service sector, it cannot be assumed that the ‘principles’ which apply within a specific service sector are not repeated on the same basis in other areas, especially where there are financial benefits to be had by either one, several or all of the ‘big four’ NI banks
There is evidence that some NI government bodies or individuals from within those bodies may be aware of practices and collusions alluded to within this document, but as in internal NI banking circles, have may have chosen to take a ‘blind eye / turn the other way’ approach for reasons / agendas unknown, but possibly at best, due to general apathy and lack of interest and concern, or at worst, due possibly to personal or other relationships involving senior NI banking executives.
The citizens of Northern Ireland and UK (and of other jurisdictions i.e. Republic of Ireland) have the right to being able to avail of banking services provided by a bank or banks connected to which ethics and integrity are unquestionable, where dubious and misleading practices relating to the implying of same and to general fitness and probity standards are not systematic, where third parties i.e. persons working for or providing services to the banks are not subjected to exploitations, including threats, intimidation, etc, and same re persons who may attempt to expose same and to have the banks acknowledge their complicity, etc.
From this position it is important, necessary even, that alternative organisations i.e. credit unions, other banks, which may operate to levels of integrity and ethics which are higher than those of the traditional Northern Ireland ‘big four’ banks, are able to succeed and progress within the Northern Ireland banking marketplace and to offer real and proper choice to banking consumers in Northern Ireland, a position which may progress partly to the obstacles to moving bank account which prevailed previously having recently been removed.
I suggest that it is also important that, as referred to previously, the NI Affairs Committee seeks to establish some form of whistleblowing facility for persons within or connected in any shape or form to the NI banking sector i.e. employee, service provider, employee of a service provider to the NI banking sector, and not just bank customers, to be able to bring to the attention of a relevant body which is completely independent of the banks themselves, misdemeanours and activities to which entities from within the NI banking sector may be complicit, and in connection to which the banks, as has been the case previously and currently, not least as, despite having reference within disingenuous Corporate & Social Responsibility Statements to the availability of ‘whistleblowing channels’ which are in fact ineffective, the banks are no longer able to operate to an agenda designed to ensure that certain issues i.e. relating to sharp practices, are kept under the radar so to speak, and that there is no longer any sort of misplaced reliance in some quarters on the ineffective whistleblowing channels of the banks, channels which, as stated, have been shown not to function as most non bank official individuals would expect, and deliberately so in some, possibly most instances.
There is no question that any form of self policing system within the banking sector, for the purpose of this document within the Northern Ireland banking sector, and particularly in respect of the ‘big four’, Bank of Ireland, Danske Bank, First Trust Bank and Ulster Bank, does not work, with such an arrangement shown to be open to abuse and self serving manipulations from within the banking sector.
This is a position which is demonstrated by a significant number of acknowledgements to issues raised and assurances that those issues will be followed up, only for them to be buried or subject to interference from third party entities, and by the range of tactics readily employed by the banks in relation to attacks of various sorts on the likes of whistleblower(s), a position which cannot be reconciled with the ‘openness and transparency’ and ‘high standards’ the banks refer to in disingenuous published Corporate & Social Responsibility Statements and equally disingenuous annual reports and so called Codes of Practice.
It is a shameful indictment of the levels of integrity and principles of the Northern Ireland ‘big four’ banks, and especially so perhaps with regards to those executives at the top who lead by example and set the corporate tone of those banks which have and continue to participate in the sort of practices referred to, and who are aware of the prevalence of those practices, that all of the details declared within this communication to the Northern Ireland Affairs Committee are true and factual.
There are examples of senior NI bank executives i.e. at Chief Executive level, both in scenarios connected to their high profile banking sector roles and in other high profile non bank roles, implying certain principles, whilst in other areas allowing activities to prevail in their organisations and turning a blind eye to same, which cannot in any circumstances be reconciled with those implied principles.
There are even examples within banking whereby it is bewildering to some, possibly to many, how when the backgrounds of some i.e. the connections and activities to which they have been connected, are considered by relevant regulatory bodies to attain ‘fitness and probity’ standards, in otherwords to be considered fit and proper to hold high office within financially regulated organisations such as banks, when ordinary business owners of much more modest enterprises would, in consideration of their backgrounds, be likely to regard those same individuals as wholly unsuitable i.e. to not be fit and proper, to be offered a position, any position, within their modest entrrprise.
There are also examples re which it could be suggested the facts cannot easily be reconciled with responsibilities detailed within the general requirements and Fitness and Probity requirements deemed to be necessary in senior bank executives i.e. at Chief Executive level, by the relevant UK (and ROI) regulatory bodies.
I look forward to providing whatever advice and assistance I am able to provide to the NI Affairs Committee in relation to the information provided in this document, and if required, to making available supporting evidential documentations to the Committee.
September 2013