Taxpayer-owned RBS has plenty of money to underwrite Billiton/Potash deal….but not UK entrepreneurs.
When the banking sector decides to show off its dysfunctionality, things are never done by halves: suspecting banks of investing in the porn sector, investigators would almost certainly discover that they’d been bankrolling a paedophile ring.
Today, figures released by Bloomberg News show very clearly that big global banks are indeed lending like mad…to safe multinational monsters getting even bigger by buying other monsters.
BHP Billiton’s loan to buy Potash Corp. of Saskatchewan Inc. has pushed lending to commodity firms alone to $128 billion this year – the most since 2007, when the new paradigm was still in full swing, and hadn’t as yet swung back to clatter everyone in the groin. The jerks who underwrote this loan were Banco Santander SA, Barclays Capital, BNP Paribas SA, JPMorgan Chase & Co…..and our very own Royal Bank of Scotland Group Plc.
They are jerks for three pretty obvious reasons:
1. They’re lending to the raw materials sector….at a time when demand for raw materials is about to go down the tubes.
2. Specifically in relation to the Potash deal, they’re lending to BHP – whose credit ratings are under review for possible downgrade by Standard & Poor’s, Moody’s Investors Service and Fitch.
3. Finally and most important of all, they’re lending to the wrong people in the first place: big, fat, old businesses who are already cash-hoarders, as opposed to the vibrant new small businesses who need higher-risk money now.
The shareholder-driven risk aversion of global banks is just another dimension of the madness that is globalism. But given the already huge Russian liabilities of RBS, for example, I’d have thought at the very least there ought to be a question in the House about why a taxpayer-owned institution has plenty of money to lend to foreign multinationals….but not to us.