bankers bonuses

[scrlk]

Who's going to be moaning when Lloyds Group rebounds and the government sells all the stock?

 

[Xordium]

Hatred for bankers is reflective of irrational, uneducated views which stem from nothing more than jealousy, a lacking of rational economic foresight and, typically, the negligence or denial of actions which lead to improved universal welfare in favour of bigotry and political ideology.

Which is of course equally blinkered as what you are railing against. So is that it - they get their bonuses or they do not - there is absolutely no middle-ground to be aimed for here.

 

[LordSplodge]

This isn't capitalism

This is Sparta?

Yes it is. Capitalism like lots of systems will always try to exceed its bounds and in this case it pushed too far but at the end of the day it was all about making as much money as possible.

That's what drives the wheels of society.

Serious question: What will happen to the country if there's another banking crisis? Can we afford to bail out the banking industry again?

There probably won't be one for a long time. The limits of the system have been tested.

All banks were bailed out, the entire industry had to be propped up from world governments.

Not all banks. A fund was made available to all banks but not all banks needed it or used it.

Not this again. The politics of envy at play here are sickening.

Yes and the so called media love whipping people up in to a frothing rage. So the bankers don't spend any of this money and place it bank into the economy or anything do they?


The only real issue of this whole crisis is the tightening of funds to small businesses. That might cause a problem.

 

[Stretch]

Also can people who cry about the bank bailout go away and learn what actually happened? The government didn't give the banks free money, it exchanged cash for shares in the bank. Shares which have VALUE, value which one day will EXCEED the amount the government invested in the banks, and be sold on the stock market.

We hope.

No, you’re right, the banks are completely innocent.

There were lots of investors falling over themselves to buy RBS shares. The government got a real bargain.

This article from the BBC sums up why I think the majority of people in this country have a deep dislike of the banks.

I think most people would just like to see a bit of humility from the banks and a bit more willingness to insure we don't get a repeat situation in a decade’s time.

 

[Glaucus]

Jealous, envious, uneducated baffons. They don't even think about how banks are structured or how there are many different parts of the banks, how bonuses are not part of the problem or solution. They are a private organisation and bonuses are no part of government opinion or say.
Just bring back banking regulations and ignore media and silly people.

At least more people seem to be educated and can actually think about the problem and solutions compared to older threads and realise bonuses don't come into either.

 

[scorza]

Yes it is. Capitalism like lots of systems will always try to exceed its bounds and in this case it pushed too far but at the end of the day it was all about making as much money as possible.

That's what drives the wheels of society.

There probably won't be one for a long time. The limits of the system have been tested.

The system failed, no testing was done until the system's limits were already exceeded. That is a dysfunctional system. MTTF of "probably a long time" isn't good enough, especially when the stakes are so high.

Capitalism is about private ownership of assets, this is almost the opposite of capitalism because essentially the state is propping up the ownership assets. Hell the British government is a majority shareholder in two of the biggest banks in the world - this is socialism.

Not all banks. A fund was made available to all banks but not all banks needed it or used it.

The bailout was a lot more than just direct cash injections into banks you know. As I said, the whole industry had to be rescued.

Yes and the so called media love whipping people up in to a frothing rage. So the bankers don't spend any of this money and place it bank into the economy or anything do they?

Ah the myth of trickle down economics, I thought that one had been put to bed a long time ago.

The only real issue of this whole crisis is the tightening of funds to small businesses. That might cause a problem.

The size of the UK debt, public spending cuts, unemployment, people's homes being repossessed - these aren't real issues?

 

[ntg]

The banks don't make money out of providing you and me with a current account or selling is pittifully tiny personal loan. They make money by investing funds in markets. THIS is what keeps a bank going and to make significant amounts of money requires the very best skilled staff.

You are ignoring the fact that many banks depend on people's savings account for their core assets base, so it's not quite as simple that they don't need the plebs. Having said that I do agree with your post.

These people are talented and work extremely hard, leave them alone. They already pay astronomical sums in tax as it is. Numerous Economists, academics and intellects have repeated time and time again that intervening in this market too much will make everyone far worse off, even if the sector does not turn out to have the mobility argument 'they'll just leave' people are claiming.

I'd be a bit reluctant to use the word 'talented' while referring to all investment bankers. There are quite a few talented people but a large part of them are simply smart individuals and hard workers rather than talented. The word talent is overrated in investment banking. Most 1st class grads from the top 20 unis could do the investment banker's as good as anyone, it's just so damn hard to break in the industry that creates this sort of 'super talented workers' mentality.

the funny thing is. Banks pay out huge bonuses to keep their "talent", the exact talent that got us all in this mess. Oh the irony

Banks are one of the few businesses that actually pay in proportion to performance, unlike many other jobs (hint: public sector). Therefore you should reconsider that when they say they are paying for talent, they do indeed refer to talent (which of course doesn't include all bankers, just look at the thousands laid off during the crisis, they were certainly not part of the 'talent' pool).

 

[LordSplodge]

The system failed, no testing was done until the system's limits were already exceeded. That is a dysfunctional system. MTTF of "probably a long time" isn't good enough, especially when the stakes are so high.


The bailout was a lot more than just direct cash injections into banks you know. As I said, the whole industry had to be rescued.



Ah the myth of trickle down economics, I thought that one had been put to bed a long time ago.



The size of the UK debt, public spending cuts, unemployment, people's homes being repossessed - these aren't real issues?

1. Capitalism is far from perfect but what do you suggest we replace it with? I doubt we need to worry about the current crisis repeating as historically each crisis is caused by a different series of events.

2. If a bank has no toxic assets and did not use any of the options available to them how can they be classed as being bailed out?

3. The general economy is driven by people spending money they've earned. Are you saying these bankers spend none of their money in the UK?

4. The size of the UK debt is being addressed by the cuts in spending. The banking crisis was only one part of what made this debt. Years of overspending by the previous Government didn't help.

The Public Sector is well overdue a review of spending as it is massively inefficient. These jobs can be taken up by the Private Sector, however it cannot do that if companies cannot grow because funds have been withdrawn by overcautious banks.

As for mortgage repossessions. People losing their homes is never a good thing but when people borrowed such crazy amounts in % of there salary it was inevitable that when bad times come (and you'd be naive to not know it would happen) these people are going to get screwed.

 

[Bald-Eagle22]

I say pay all the State owned bank employees Bonuses , but only bonuses with a very very small salary .

If these so called very talented individuals have to be paid massive bonuses then fine , a £20,000 salary is a token gesture to retain them as an employee with all the employee right. Then if they hit X Y and Z targets of profit through the year then pay them vast amount of money . Private banks then what buisness is it of mine.

I think peoples issues are with people who sit on the board at these establishments who to a large degree just flutter around the city talking ****** and spending most of the day at lunch and dinner meetings ( networking yes I understand it ) pay these guys an average MD's salary and give them a Peerage of some sort for helping to sort out the countries finances if they do well.

Taxing the hell out of the banks will just make them up sticks and move , a lot of banks have European Headquarters in London let alone UK operations , I remember reading a something some where that if the bonus culture stopped then something in teh region of 200,000 people in London could loose there jobs due to them going elsewhere, service industries to the finanacial intitutions would go under on mass.

I say leave them alone , we are talking here of maybe a few thousand people .

 

[ntg]

I think peoples issues are with people who sit on the board at these establishments who to a large degree just flutter around the city talking ****** and spending most of the day at lunch and dinner meetings ( networking yes I understand it )

I think you'll find that it's exactly that networking, or 'rain making' that brings in the vast majority of revenue for banks (trading aside, although that seems to be dwindling as a core operation due to new regulations).

You can work until the cows come home putting together pitch books and doing comps but unless your Director brings in a new client (i.e. a merger or acquisition client or an IPO or..or..or..) you are not going to get paid a penny.

 

[scorza]

1. Capitalism is far from perfect but what do you suggest we replace it with? I doubt we need to worry about the current crisis repeating as historically each crisis is caused by a different series of events.

You can't replace something which we haven't got. Banking is currently a socialist system across the world - backed by state governments. The first step would actually be replace that with a more capitalist system whereby the banking industry doesn't need government support. If a bank fails, it goes into bankruptcy with minimal impact on other banks.

2. If a bank has no toxic assets and did not use any of the options available to them how can they be classed as being bailed out?

Which banks had no toxic assets? If RBS or HBOS had failed, then loans from HSBC and Barclays would have become toxic assets for those banks. Why do you think we didn't hear HSBC or Barclays complaining when the RBS and HBOS were given direct state aid? In a functional market place they should have been furious that their competitors were being kept afloat by the government.

3. The general economy is driven by people spending money they've earned. Are you saying these bankers spend none of their money in the UK?

Not at all, I'm pointing out that the "trickle down" from them doing so has little effect on the rest of the economy.

4. The size of the UK debt is being addressed by the cuts in spending. The banking crisis was only one part of what made this debt. Years of overspending by the previous Government didn't help.

The Public Sector is well overdue a review of spending as it is massively inefficient. These jobs can be taken up by the Private Sector, however it cannot do that if companies cannot grow because funds have been withdrawn by overcautious banks.

As for mortgage repossessions. People losing their homes is never a good thing but when people borrowed such crazy amounts in % of there salary it was inevitable that when bad times come (and you'd be naive to not know it would happen) these people are going to get screwed.

And who lent people these massive salary multiples? The difference is that people who borrowed the money lose their home if they can't pay it back, while the people who lent the money get bailed out by the state and still get their bonus. How is that fair?

 

[gonda]

Bored of this ridiculous vendetta against 'bankers'. Banks realised how close they came to oblivion and have acted accordingly. If performance over the last year didn't warrant it, they would not be giving employees bonuses. Bank performance in the industry is recovering, to continue that recovery, they need to recruit and hang on to employees, both of which encourage the banks to give out bonuses. Instead of focusing on the size of the total bonus pot, which frankly gives a skewed view of the amount of money each 'banker' will get (the executives will by far take the majority of that amount, the rest will be minimal for 'lesser' employees), what should be reported is the amount the banks have raised for the economy/themselves to allow them to give such a bonus pool.

 

[Sudden]

Which banks had no toxic assets? If RBS or HBOS had failed, then loans from HSBC and Barclays would have become toxic assets for those banks. Why do you think we didn't hear HSBC or Barclays complaining when the RBS and HBOS were given direct state aid? In a functional market place they should have been furious that their competitors were being kept afloat by the government.

As you said, 'would have'. Surely the point remains that they didn't and had no need for any of the bail-out money. Well, I know HSBC didn't. Not 100% sure about Barclays. Therefore, not all banks needed to be bailed out.

 

[Narj]

Must admit I roll my eyes when people complain about certain banks giving out bonuses, when the certain banks they are talking about didn't take a penny of taxpayer cash.

Also, the big bonuses might help the economy, considering the amount of tax they will pay on them...

 

[Danthus]

Banks are an easy target and Scorza has lapped it up.

 

[mangobreeder]

And who lent people these massive salary multiples? The difference is that people who borrowed the money lose their home if they can't pay it back, while the people who lent the money get bailed out by the state and still get their bonus. How is that fair?

Fair? What about Personal responsibility.

The people who borrowed the money in the first place needs to take some responsibility. They borrowed too much money and gambled on their house price increasing.

My Amex card has a limit of 35k on it. but does it mean i'm going to max it out tomorrow? hell now

scorza, seriously, you need to stop reading the daily mail.

 

[[TW]Fox]

Which banks had no toxic assets? If RBS or HBOS had failed, then loans from HSBC and Barclays would have become toxic assets for those banks. Why do you think we didn't hear HSBC or Barclays complaining when the RBS and HBOS were given direct state aid? In a functional market place they should have been furious that their competitors were being kept afloat by the government.

But the fact they didnt get direct aid means your point is irrelevent. Consider this example.

Many businesses would have gone under had a number of major banks failed. So it's also entirely true to say that a number of other private businesses in other fields in the UK also benefitted from or would not exist were it not for the government purchasing shares in certain banks.

So, assuming Bobs Skip Hire is trading now and wouldnt have been had everything gone down the tube are we going to cry when Bob's cheif executive gets a nice bonus?

Of course not. And it's the same with Barclays. They indirectly benefitted therefore it's nothing to do with us what bonus it chooses to pay its staff.

 

[jamief]

Not this again. The politics of envy at play here are sickening.

The bankers get enormous bonuses because they are contractually obliged to receive them. They signed an employment contract which awards a proportion of the pay they receive based on performance. They deliver this performance, they receive the performance related pay, or bonus. It really is THAT simple.

They are PRIVATE companies and can thus do as they please.

The banks don't make money out of providing you and me with a current account or selling is pittifully tiny personal loan. They make money by investing funds in markets. THIS is what keeps a bank going and to make significant amounts of money requires the very best skilled staff. Therefore to attract these staff you offer a renumeration package which rewards them for performance - remember, the only reason to pay these particular staff a large bonus is because they have generated a large profit for the bank.

Also can people who cry about the bank bailout go away and learn what actually happened? The government didn't give the banks free money, it exchanged cash for shares in the bank. Shares which have VALUE, value which one day will EXCEED the amount the government invested in the banks, and be sold on the stock market.

The only law we need is one preventing people who have no idea what they are talking about holding strong opinions on a subject, this goes as much for the press as anyone else.

Whilst we're at it, can the general public be informed that the bank bailout did not result in our national defecit?

 

[scorza]

Fair? What about Personal responsibility.

The people who borrowed the money in the first place needs to take some responsibility. They borrowed too much money and gambled on their house price increasing.

My Amex card has a limit of 35k on it. but does it mean i'm going to max it out tomorrow? hell now

scorza, seriously, you need to stop reading the daily mail.

Is that the best you can do? Can't refute the actual points I make so resort to the Daily Fail argument.

 

[Danthus]

Whilst we're at it, can the general public be informed that the bank bailout did not result in our national defecit?

Tell the various Union leaders too while you are it.