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Royal Bank of Scotland bankrupts busineses


wee eddie

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I'm disgusted, if there is a scintilla of evidence that RBS has bankrupted a single business for it's own gain. I'm closing my account with them.

They have broken the very trust that makes the Banking Business work.

I will wait a while until I find out what has actually happened but, if I witness, prevarication or legal quibbling by RBS, then in my opinion the only way to make myself plain is to close my Account and to urge others to do the same.

If sufficient Customers leave, then they will hurt.

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fourm member

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My first reaction was 'this old story'.

'Private Eye' has been reporting on companies that seem to have been brought down by their bankers for the benefit of the bank for a couple of years at least.

The sequence of events is fairly clear - company has a bit of a problem, bank provides 'expert assistance', expert says company can't be saved, bank sells off assets and gets its loan back plus big fees for the 'assistance'.

What is harder to know is whether that is a pre-planned sequence or just the way it works.

I'm a little concerned that the man behind this report was personally involved in a company that went down this path and I didn't think Vince Cable's comments on breakfast TV allayed those concerns in full.

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spuds

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Any links to this story?.

The activities of banks are of very little surprise now or in the past, and even last week there was an television investigation programme about how certain banks are still conducting themselves, even though they have been warned?.

Suggesting that closing accounts will hurt a bank is perhaps not the most brilliant idea, but getting a watchdog with teeth might, but that's very unlikely at the way things are going?.

What always comes to my mind in circumstances like this, is the fact of what Alistair Darling told the major banks on the eve of the recent banking disaster. The representatives of the banks present were making demands, and Alistair Darling had to point out to them, that none of them had anything to demand with, they (the banks) were actually insolvent or bust. Hence the public bail-out!.

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aquatarkus

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Hi there Was listening to LBC this afternoon while driving through London and listening to some of the absolute horror stories from people / companies where the banks have literally destroyed companies / people on some of the discussions the LBC presenters could only describe it as blackmail by the banks.

Regards Aquatarkus

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Lazarus The 2nd

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One Story in this Click here BBC Five Live, From 1:24:35 in..

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wee eddie

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My leaving RBS will make little difference to them, nor will the loss of 100 or 1,000 Accounts affect them.

However the loss of 10,000 Accounts would rattle their cage

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morddwyd

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Don't see the problem.

Banks lend money against a security, i.e. a business. If the business fails to comply with the terms, they foreclose.

That's what they do, that's their business.

Mortgage companies do the same.

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Lazarus The 2nd

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More in this Click here

The Tomlinson Report, it's a pdf.

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Forum Editor

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Let's make a distinction here.

If it can be shown that a bank has deliberately brought about the failure of a business in order to profit from it, then there is a case to answer. It has been alleged that RBS has done just that, by demanding independent expert reports from businesses in difficulty, and enforcing other measures that cost the businesses so much that they have failed. It is alleged that the bank then picked up business assets at rock-bottom prices to offset the debts.

If. on the other hand, businesses have failed because they could not meet repayments on loans, or because they have exhausted their overdraft facilities, and the bank withdrew financial support, there is not a case to answer - it's a hard world, and banks have been severely criticised in the past for profligate lending.

Time will no doubt tell which of these scenarios is the correct one. In the meantime let's be careful about making assertive statements about what is the true state of affairs.

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fourm member

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morddwyd

That's a very binary way of looking at the situation.

There are companies that are viable and there are companies that are not.

There are, though, companies that are heading towards trouble but could turn around or fail.

Now what matters is a mixture of short-termism and accountancy rules.

If the bank moves in, shuts down the business and sells off the assets it will either show a profit on the deal or fully recognise its losses and put them behind it. Share prices are all about 'it will be better tomorrow'.

If the bank decides to work to keep the company in business, it has to recognise the risk by making a provision against the loan so it has to take a loss and no-one values the chance that it might get its money back in two or three years.

So, the best choice (for the 'markets') is to put the business out of business.

Then you move on to the next stage.

Because no-one questions a decision to take control and liquidate, the opportunity arises for managers to decide to shut down businesses that could be saved knowing that those are the ones where the assets will be worth something and the banks fees will be met as well as getting the loan back.

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spuds

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Perhaps we might look at this in another way on how banks work, and you may not need to look any further that a creditor's meeting when a business is forced into insolvency.

Who are the first on the list for payments from an insolvency, and who benefits the most, and it sure isn't the small business trying to survive for a little longer. I have personally witnessed on at least three occasions how banks work at an insolvency meeting, and in each case it showed how ruthless they are or can be. Yet the laws and regulations always seem to be on the banks side.

Pity this same attitude was not taken, when some of the banking institutions had serious shortfalls in their own finances, and the public had to bail them out, due to their previous bad banking practises?.

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