Bankers were unfairly treated over the financial crisis.

Bonuses as a whole are not going to be capped, only ones that reward short-term goals [i.e. annual bonuses, target bonuses] - this is a good thing:

1. The people that are being discussed in Parliament are those on a nice pay packet anyway - city bankers have some of the best wages in the country.

2. Short-term bonuses promote unsustainable lending without serious consideration as to what happens to the person/organisation being leant to if they wind up not being able to pay it back.

3. The UK's financial sector is not growing because of the cushy bonuses, it's growing because we are a country in the perfect timezone for international trading that natively speaks the international language of commerce, has an excellent academic foundation for potential bankers and brokers with superb universities and has a fairly loosely regulated Anglo-Saxon economy.

4. It's not about drastically slashing bonuses, it's about making sure that bonuses are paid out for the correct reasons, i.e. making profits that won't collapse on a company in a few years and will wind up making a net profit rather than a net loss should a recession come around again. This saves the taxpayer money and secures companies.

Reply 2

usainlightning

OP

Aphotic Cosmos

Bonuses as a whole are not going to be capped, only ones that reward short-term goals [i.e. annual bonuses, target bonuses] - this is a good thing:

1. The people that are being discussed in Parliament are those on a nice pay packet anyway - city bankers have some of the best wages in the country.

2. Short-term bonuses promote unsustainable lending without serious consideration as to what happens to the person/organisation being leant to if they wind up not being able to pay it back.

3. The UK's financial sector is not growing because of the cushy bonuses, it's growing because we are a country in the perfect timezone for international trading that natively speaks the international language of commerce, has an excellent academic foundation for potential bankers and brokers with superb universities and has a fairly loosely regulated Anglo-Saxon economy.

4. It's not about drastically slashing bonuses, it's about making sure that bonuses are paid out for the correct reasons, i.e. making profits that won't collapse on a company in a few years and will wind up making a net profit rather than a net loss should a recession come around again. This saves the taxpayer money and secures companies.

A trader doesn't lend money. They invest in shares.
You are completely right about our perfect timezone, but caps on bonuses will drive talent from our shores.
I don't disagree with bankers being paid for long-term growth.

Reply 3

usainlightning

OP

Apologies for the double negative

Reply 4

Natasharox

I don't know enough about the situation, but it did annoy me how the public were acting holier than thou. Anyone would take big bonuses if they could get them!

Reply 5

Aphotic Cosmos

Natasharox

I don't know enough about the situation, but it did annoy me how the public were acting holier than thou. Anyone would take big bonuses if they could get them!

True, it is pretty much just inverse classism.

But simply because there is an element of [perhaps justified] classism in there, doesn't mean that we should turn a blind eye to either the executives of state-backed banks like Lloyds walking home with huge pay packets and bonuses, or to bankers who seem to think that everything can just carry on as normal once the economy picks up in the next few quarters. The former group have a significant proportion of their wage coming out of the taxpayer's pocket, and it is their job to get the banks back on track rather than make a pretty penny from it. The latter group have no state backing at all, but are still responsible for much of the economy and should be made to act responsibly. A few wrong guesses and suddenly hundreds of people lose their jobs.

Reply 6

usainlightning

OP

Aphotic Cosmos

True, it is pretty much just inverse classism.

But simply because there is an element of [perhaps justified] classism in there, doesn't mean that we should turn a blind eye to either the executives of state-backed banks like Lloyds walking home with huge pay packets and bonuses, or to bankers who seem to think that everything can just carry on as normal once the economy picks up in the next few quarters. The former group have a significant proportion of their wage coming out of the taxpayer's pocket, and it is their job to get the banks back on track rather than make a pretty penny from it. The latter group have no state backing at all, but are still responsible for much of the economy and should be made to act responsibly. A few wrong guesses and suddenly hundreds of people lose their jobs.

The capping of bonuses for taxpayer funded banks has led to the best talent in the RBS investment banking division going to no taxpayer funded banks. Leaving RBS with the one that lost money for the bank last year. This isn't very good if the taxpayer wants to make a profit out of the banks. So paying highly now is an investment for the future.

Reply 7

Erebus

It's more the financial regulatory departments really. They, with other political governing bodies, continually pressured banks to make more and more money i.e. no one complained when it was coming in and convieniently forgot about the bust that usually comes with boom.

Reply 8

ali567149

1

Aphotic Cosmos

3. The UK's financial sector is not growing because of the cushy bonuses, it's growing because we are a country in the perfect timezone for international trading that natively speaks the international language of commerce, has an excellent academic foundation for potential bankers and brokers with superb universities and has a fairly loosely regulated Anglo-Saxon economy.

And also don't forget the huge tax havens that operate out of the city of London. After all where else can you hide money outside of switzerland and lituania better than grand caymen, jursey, bermuda to name but 3.

Reply 9

Bankers take risks. It follows that with some risks come rewards.

Reply 10

nikdc5

7

Martyn*

Bankers take risks. It follows that with some risks come rewards.

I'm sick of this *****. Bankers take risks with other people's money. The worst they risk personally is a change of career if it doesn't go well. Soldiers and firemen and taxi drivers and pizza delivery drivers actually risk their personal safety doing their jobs, would you argue that they too should earn multi-million pound bonuses?

Reply 11

Kreuzuerk

3

Martyn*

Bankers take risks. It follows that with some risks come rewards.

Not with their own money.

Reply 12

nikdc5

I'm sick of this *****. Bankers take risks with other people's money. The worst they risk personally is a change of career if it doesn't go well. Soldiers and firemen and taxi drivers and pizza delivery drivers actually risk their personal safety doing their jobs, would you argue that they too should earn multi-million pound bonuses?

Yes, but they take risks nonetheless. Remember that bankers have no regard for moral precepts; they exist to make money and amongst other things to spread wealth, supposedly. But entirely, the banks are not meant to be moral do-gooders (although recently a few banks have tried to spin an ethical and moral stance). Therefore, taking risks no matter whose money it is, will be rewarded, even upon the basis of just taking risks be they unsuccessful.

The bankers are in a different league to taxi-drivers and soldiers. Soldiers are numbers, ranks of numbers. Taxi-drivers are part of the lower orders, useful nonetheless...if you are without your own transport. Bankers, however, are higher up in the eschalons of society. They always have been ever since ancient times. When you look at history the complete picture is that the money lenders have always been the richest, the most-powerfull; the rulers.

People just don't realise this. This system of banking was handed down from ancient times. Nothing much has changed apart from the sophistication of the banking system. The skeleton, the bones and the blood is still that ancient system of power and rulership. Consequently, the rulers of the ancient systems was to organise the lower orders for profit. As it is now. The banking system is all about profit, and profit is reward no matter whose money it is.

Reply 13

Bax-man

2

nikdc5

I'm sick of this *****. Bankers take risks with other people's money. The worst they risk personally is a change of career if it doesn't go well. Soldiers and firemen and taxi drivers and pizza delivery drivers actually risk their personal safety doing their jobs, would you argue that they too should earn multi-million pound bonuses?

They take risks with money that has been voluntarily put into accounts by people who are consenting for the banks to use this money largely as they see fit as long as they (the depositors) receive a rate of interest. Which part of this voluntary transaction you disagree with?

Reply 14

moreiniho

Not with their own money.

Indeed. The reward consists in precisely taking risks. In the context of the current banking crisis, the rewards were given perhaps because of the boom in wealth over the last two decades or so. The boom supposedly raised the living standards of many people, by lending money to the people so that they could afford property; a loan to buy property or items, for example, which could not be purchased otherwise because of lack of funds.

This risk was assessed and was found to be suprisingly successful; this was the boom, and people became richer, were able to afford that property, to run that car, that business, or whatever. Understand that risks whether successful or not are rewarded, as it was in ancient times - the system that we inherited.

Reply 15