Saturday, April 2, 2011

Iceland: Inside Job & The Ruling Class

Watching the film Inside Job has been very illuminating as I decided to Google Iceland and found that many councils in the UK paid their chiefs more than the Prime Minister and managed to lose so much of the rate payers money. Now these same people are supposed to have a big say in GP Consortia!!!

But surely they must have received expert advice?

MPs demand investigation into Tory treasurer's financial empire
By Martin Hickman

The report comes after The Independent revealed that 51 councils who lost £470m when Iceland's banking system collapsed employed Butlers – an ICAP subsidiary – as their treasury management advisors. ICAP in turn received commission from Icelandic banks for brokering 16 per cent of those investments.

The business empire of the Conservative Party treasurer and chief fundraiser Michael Spencer should be investigated over the propriety of its dealings with local councils and other public bodies, MPs say today.
The Communities Select Committee say in a scathing report that the Financial Services Agency (FSA) should investigate whether it is appropriate for one part of Mr Spencer's ICAP empire to assist council finance officers with council investments while another part receives fees for brokering the deals. This could give rise to "actual or perceived conflicts of interest", it said. The FSA said it would consider the request.
By Martin Hickman
Monday, 19 January 2009
A company run by the Conservative Party treasurer Michael Spencer gave advice to almost half the councils facing a funding crisis as a result of the collapse of Iceland's banks, an investigation by The Independent reveals. Those councils who used Butlers for strategic advice were almost twice as likely to have lost money in the three main Icelandic banks as those advised by other companies.
Of the 116 local authorities who lost money, 51 received advice from Butlers. Their losses totalled £470m, more than half the total amount of council funds frozen in the banks.
The Independent's two-month investigation has been passed to the Communities Select Committee, which today begins an inquiry into local government finance, sparked by the disastrous decision of councils to invest £886m in Iceland's economy.

Top 10 council investors in Icelandic banks

Council (Political control); Investments; Advisor; Brokers

1. Kent (Con); £50.3m; Butlers; ICAP, Martins, Tullett Prebon, Garban
2. Nottingham (Lab); £41.6m; Butlers; City Deposit, Martins, Sterling
3. Haringey (Lab); £37m; Sector; Martins, Tullett Prebon, Sterling
4. Norfolk (Con); £32.5m; Butlers; ICAP, Sterling
5. Dorset (Con); £28.1m; Butlers; ICAP, Tullett Prebon, Tradition
6. Hertfordshire (Con); £28m; Butlers; ICAP, Martins, Tullett Prebon, Sterling, Tradition
7. Barnet (Con); £27.4m; Butlers; ICAP
8. Somerset (No overall control); £25m; No advisor; ICAP, Sterling, Tradition, Tullett Prebon
9. Northumberland (No overall control); £23m; Sector; ICAP, Martins, Tullett Prebon
10 Surrey (Con); £20m; Butlers; Martins, Stirling, Tradition, Tullett Prebon

I think there is something fundamentally scary about our democracy…. Because I think people have a sense that the system is rigged, and it’s hard to argue that it isn’t.

Michael Lewis: The Big Short


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