Voodoo Club rises from banks’ ashes
The scene was like that of a Jacobite conspiracy. Around 20 Scots from different walks of life — bankers, lawyers, architects, property developers, business people and journalists — came together in the candlelit splendour of Edinburgh’s Voodoo Rooms. They were there to mourn the passing of 300-year-old institution, the Bank of Scotland, and to appease the ghosts of Scottish bankers’ past.
Proceedings were more decorous than the temporary title, “the Voodoo Club”, taken from the name of the venue where the first meeting was held, suggests. Economist Robert McDowell, for example, read a poem comparing the collapse of the Scottish banking sector to the Hanoverians’ victory at the Battle of Culloden on 16 April 1746.
But this was no nostalgia-fest. Voodoo Club members were there to discuss how the banks can regain the trust of the public.
As one member of the group pronounced: “Trust cannot be recreated without a change in culture and a rediscovery of the values that distinguished Scottish banking. That requires a critical rethink of the forces that drove banking straight into the wall over recent years.”
The Voodoo Club — which intends to formalise itself shortly — wants Scotland to get the banks it deserves, and was determinedly upbeat about the future. As one attendee put it: “This was more of an awakening than a wake.”
He also said that he believes a last-ditch chance remains that the Court of Session can be persuaded against approving the “Scheme of Arrangement” that will permit Lloyds’s takeover of HBOS. The hearing is scheduled for tomorrow and Voodoo Club members are hoping that the judge in the case, Lord Angus Glennie, will give them a hearing as intervenors.
One idea floated at the inaugural Voodoo Club event was that the group should monitor the activities of Lloyds Banking Group — the new name for the merged HBOS/Lloyds TSB — to ensure that it keeps its pledges. It could also monitor whether the new-minted oligopoly behaves as a responsible corporate citizen north of the Border, and that its insurance and fund management activities remain headquartered in Edinburgh.
Another proposal was that the group act as watchdog on bank competition north of the Border, particularly as the government, effectively the owner of both Lloyds Banking Group and Royal Bank of Scotland, now has a near-monopoly.
Dark threats were heard of class actions against the two leading Scottish banks for allegedly misleading investors, customers and staff prior to launching rights issues last April. There was also talk of how the government allegedly “corralled” asset management groups and life insurers, including Standard Life, into rubbishing the attempt by Sir George Mathewson and Sir Peter Burt, respectively the former chief executives of Royal Bank of Scotland and Bank of Scotland, to oust HBOS’s management.
Among the conspirators were members of the Merger Action Group, which last year tried and failed to derail Lloyds TSB’s takeover of HBOS at the Competition Appeal Tribunal. They included investment banker Tim Noble, solicitors Robert Bertram and Walter Semple, corporate financier Peter de Vink, online bank founder Jim Spowart, economist Robert McDowell, architect Malcolm Fraser, businessman David Alexander, property developers Dan Macdonald and Mark Shaw, media consultants Ian McKerron and Gordon Hay, website designer Caroline Key and QC Ian Forrester.
Business journalists Peter Jones, of The Economist, Bill Jamieson, of The Scotsman and Kenny Kemp, formerly of the Sunday Herald, were also present. In addition to this range of formidable talent, the Voodoo Club is independent, politically unaffiliated, and open to all.
This article was published in The Sunday Herald on 11 January 2009 . See Financial Times’ follow up piece from August 2009