Reply to post: Tory Stolen Bank

UK 'meltdown' bank TSB's owner: Our IT migration was a 'success'

Anonymous Coward
Anonymous Coward

Tory Stolen Bank

The TSB was dedicated to serving the community and effectively competed with the big clearing banks by successfully attracting deposits.

TSB served its customers well but retained some of its profits instead of passing them on to its customers by more competitive interest rates. So its reserves accumulated, had become very substantial, were in effect serving the community.

Ownership of the bank and its reserves became important when a Conservative government decided to 'privatise' the bank and convert it into a shareholder-owned profit-maximising bank just like the commercial banks.

A 1973 report had stated that if the banks are to be considered as mutual organisations without shareholders the depositors are entitled to the full value of the bank. (TSB 03}

The TSBs were freed from competitive restrictions in 1976 {TSB 05}. The 1981 TSB Act in turn states that the TSB can accept deposits, accumulate the produce and

return the deposits and produce to the depositors after deducting any necessary expenses of management, but without deriving any benefit from the deposits or produce. {TSB 01}

The TSBs serve the community. Trustees are meant to ensure the TSBs are run for the benefit of their depositors and of the community, their assets being looked after by Trustees on behalf of the depositors.

But then the UK government decided to 'privatise' the TSBs, to sell them off, stating in the 1984 White Paper:

The TSBs do not belong to the Government. Nor do they belong to the trustees, to their employees or to their depositors. {TSB 05}

So the government is proceeding to sell the TSBs although it considers that they do not belong to the government, on the basis that the TSBs and their assets belong to nobody, that no one owns the bank.

The TSB's assets were to be transferred to a public limited company before flotation {TSB 01}. This is how Andrew Murray commented in the Financial Times:

As it considers that the TSB belongs to no one, the government apparently intends to appropriate the assets by Act of Parliament, fix the price, make the sale and return the payment with the goods. In other words, the existing assets would be a free gift to the purchasers of the shares. {TSB 06}

The 1985 Act then took away the powers of the depositors. The bank is to be run first and foremost for its shareholders. {TSB 01}

It did not seem to make sense to depositors and the matter was fought out in the courts in Scotland, then in England and Wales, and finally decided in the highest UK court, the House of Lords.

Their reasoning was interesting, their arguments appeared almost unreal, the conclusion was unexpected.

See for full document

Once you understand where they came from and what was done to them then everything makes sense

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2019