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Do you think bankers bonuses should be regulated? Watch

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    Recently in the news there have been lots of headlines about banks, some of which received money from the taxpayer during the financial crisis of 2008/9, have been paying large bonuses to their staff. Do you believe this is fair? Especially since lots of the banks have dipped into the red zone and dealing with a huge loss, yet they're paying out millions of pounds worth of bonuses.

    Do you think it's getting to the point where bankers' remuneration isn't a reflection of competence, but merely what they think they deserve? Also since the British economy is an overly populated nation fuelled by traditionalist views, bankers bonuses have been a tradition therefore they are concerned about upholding this factor.

    These are just a few points but feel free to discuss your views
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    Regulated? It should be regulated by performance yes.
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    (Original post by Alfissti)
    Regulated? It should be regulated by performance yes.
    Regulated in all areas, not only performance. I believe there is a lack of structure in determining these bonuses, right?
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    Any firm that has full/part taxpayer funding/bailed out/ownership should be.

    Private firms definitely not.
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    (Original post by Westeros)
    Regulated in all areas, not only performance. I believe there is a lack of structure in determining these bonuses, right?
    Banks are multi-billion pound organizations, they have their structures and policies in place for bonuses and remuneration.

    Also it is a very select few in investment banks that get all the big bonuses you hear about to which it is mostly peanuts for the bank that they work for.
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    (Original post by TSA)
    Any firm that has full/part taxpayer funding/bailed out/ownership should be.

    Private firms definitely not.
    Why?

    (I'm not saying I disagree, I'd just like to hear your reasoning)
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    (Original post by Westeros)
    Why?

    (I'm not saying I disagree, I'd just like to hear your reasoning)
    However much a private firm decides to pay bonuses to its bankers is up to that firm. It will make a decision which will ultimately lead to them running a profitable company any messing around by the government via regulation will just **** up the free hand of the market.
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    (Original post by TSA)
    However much a private firm decides to pay bonuses to its bankers is up to that firm. It will make a decision which will ultimately lead to them running a profitable company any messing around by the government via regulation will just **** up the free hand of the market.
    Which is fine for institutions or industry sectors which aren't too big to fail and cause major disruption.

    Where a company is of such importance its survival is a necessity. eg BT, Post Office, Barclays there needs to be oversight.

    By your logic the financial system couldn't have blown up in 07-09.

    Free market is fine, but nobody wanted the state let it financial institutions of that state go to the wall. We'd have been back in the 17th century within weeks.
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    (Original post by Alfissti)
    Banks are multi-billion pound organizations, they have their structures and policies in place for bonuses and remuneration.

    Also it is a very select few in investment banks that get all the big bonuses you hear about to which it is mostly peanuts for the bank that they work for.
    Bonus structures which recognise paper profits as opposed to realised profits were not particularly sensible decisions coming from the banks structures and policies.

    This year Barclays bonus pool was £2.4bn. Profits were £5.2bn. Hardly 'peanuts' its pretty much half the level of the profits - and thats ignoring the rest of the renumeration package.
    http://www.bbc.co.uk/news/business-26133654
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    Nope. Ideally they'd also be allowed to fail when their poor business models are exposed but hey ho.
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    I view bonuses as just part of their wage, but performance tested. If you want the best people you have to pay more money. There is the risk of the best people going to places like the USA and Asia if they can't earn as much here.
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    Businesses owned by the taxpayer should not pay bonuses (call it punishment for requiring a bailout) however the state has no business telling the private sector how much it can pay its staff. Either ban the bonuses or stay out of the way.
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    (Original post by james22)
    I view bonuses as just part of their wage, but performance tested. If you want the best people you have to pay more money. There is the risk of the best people going to places like the USA and Asia if they can't earn as much here.
    If the performance testing incentivises behaviour which increases the risk of a systemic collapse then they should jog on.
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    (Original post by Quady)
    If the performance testing incentivises behaviour which increases the risk of a systemic collapse then they should jog on.
    Then that is an error on the part of those deciding who should get the bonuses. Errors happen in all of life, I really doubt the banks would deliberately condone behavior that they knew would lead to collapse.
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    (Original post by Quady)
    If the performance testing incentivises behaviour which increases the risk of a systemic collapse then they should jog on.
    I'm not sold on investment banker bonuses being the problem. Ultimately as much as they were risk taking for bonuses, they were just doing what their bosses were telling them to. It's the upper management of investment banks who need their bonuses curtailing if anything rather than the guy who's just packaging a CDO.
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    (Original post by Rakas21)
    I'm not sold on investment banker bonuses being the problem. Ultimately as much as they were risk taking for bonuses, they were just doing what their bosses were telling them to. It's the upper management of investment banks who need their bonuses curtailing if anything rather than the guy who's just packaging a CDO.
    Obviously there was a cluster of fail going on.

    But having bonus' which are based on in year performance, when it can blow up later down the line doesn't sound like a particularly sensible incentive mechanism. Especially when performance related pay is such a high proportion of the renumeration.
 
 
 
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