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Everyone knows the story of the prodigal son and how he took his portion of his father’s fortune and mismanaged it through a series of foolish choices. Then, when he was destitute, he returned home, where his father restored him to his familial position.
Apparently the 21st Century version has another chapter. In the new, unabridged edition, the father is the Bank of England and the son is the Royal Bank of Scotland. The father loans the son £45 billion to get back on his feet. In return, the father retains an 81% share in the son’s business endeavors until the son pays back the loan.
Five years later, neither talks much about the actual amount of the loan so much as they do the percentage of the father’s participation. Whilst the son has tried, at least to some extent, to get back on his feet, he has still not demonstrated the business acumen necessary to get the job done. Along come his tenderhearted, but misguided uncles, Lawson and Mervyn, to his rescue with a suggestion for their brother. A suggestion, might we add, that is about the stupidest thing since Pharaoh decided to chase Moses through the Red Sea.
They say, “George, why don’t you let the boy divide his assets into good and really, really bad. Let him keep the good ones and you buy all of his bad debt and poorly performing assets for an additional, say £8 to 10 billion? That way, he won’t have work so hard. Come on, George, you’ve already given him a cake at the welcome home party. Why not let him eat it too?”
All we know at this point is that the prodigal’s father doesn’t seem to keen on the idea. He has politely pointed out some problems with the idea, but was overhead saying something under his breath that sounded like “This is the dumbest thing since un-sliced bread.” The chapter closes with George deciding to consult with his other brother, David.
The rest of the story has yet to be written. It’s getting to be a real cliffhanger, and I’m wondering who is going to go over the cliff and who is going to get hung.
On the other hand, the story has got me to thinking. If this works out for RBS, why shouldn’t everyone else be able to do the same? Why not let every person and every business that has debt or other liabilities separate them from the rest of their holdings, then keep only the good stuff. We could sell all of the bad stuff to Dad! Here’s the brilliant part, we won’t ask Dad for a loan. We’ll ask him to BUY all the bad stuff, all the burdens that are making life hard for us. Then we would be free to go back to life as usual, just like nothing ever happened. After all, he’s our Dad. What are fathers for?
Oh well, it’s just a story. But I can’t wait to read the next chapter.
