I have and theres some many conflicting view points that its not really stayed on thread. My point is you have to pay these people to do what is a high risk job imvolving a lot of money One mistake and they lose more money than we will ever see in a lifetime on the flip side one win and they make a lot of money - why shouldnt they be rewarded? The Bankers concerned are a very tiny proportion of the banking industry and have nothing directly to do with your mortgage or savings - they are in effect financial modellers trying to predict trends. The other thing is these guys are taxed at 40-50% so stop the bonuses you also lose the tax revenue. Take these guys out of the frame and the tax payers money currently invested in the syastem will never be repaid
The Co-operative Bank is there to make profits for its members in the form of dividend it is not Non Profit making . Credit unions do not offer a full range of banking services
Simple reason currently as to why they shouldn’t be rewarded, thanks to the mismanagement and really shady deals that caused the crisis, it wasn't the bankers that took the hit, it was the tax payers. In truth several banks should have been shuttered and closed down, instead they walked away with a slapped wrist, a large pension and a 7 figure bonus, as the banks were too important to fall. If you’re going to go with the high risk high reward strategy, the high risk part needs to actually be there, to create caution, without it it’s a high risk area with people taking longer and longer shots knowing nothing is really going to happen to them when the gamble falls through.
Define the ''the mismanagement and really shady deals that caused the crisis'' as I suspect you could not tell me the chronolgy of why it actually happened. The UK economy simply could not afford to have banks closed down - remember the Northern Rock Saga? Financial services is a massive part of the UK economy and like it or not the economy needs the banks and bankers and the revenue generated is a significant part of UK GDP - without them chaos and fiscal meltdown would ensue. Also the guy walking away with a 7 figure bonus is I presume Fred the Shred who paid with his job He had a contract that had to be honoured the same way as your or mine does - you dont get rid of a Chief Ex lightly - but there was no way RBs was going be shuttered up
I think banks could learn something from football actually lets take the recent sacking of Chelsea manger Villas what's is face. If a manger doesn't perform or do his "job" properly he gets the sack, I think some bankers need to feel a little less secure in there jobs, if they don't do what they are "paid" to do then they should be fired. You could say that the bank will be losing the "best" people for the jobs but once again referring to football mangers you could be amazing somewhere else but crap elsewhere, plus there's plenty of others willing to work for less. Football players on the other hand are a different ball game.
I did and its totally correct although the insurance backing of investments ( one of the major reason for the wholesale collapse of the bond markets)wasnt initially mentioned. Maintaining confidence in the banking system is one of the key ways of extracting ourselves from the do do if that isnt there we will remain in a fiscal ice age. Once the inter bank lending market resumes then we will be on the way to recovery - at the moment banks are sitting on and trying to attract capital hence the increase in deposit rates offered
^ This. If we look at the US specifically the US treasury bailed them out, removed their debt obligations and let them off scott free. The lesson learned is not we have to be more careful; it's we have to be too big to fail. The market/industry should have self corrected itself but outside interference/bail outs have stopped this from happening. Bonus's themselves are not so much of a problem, it's the way the bonus's are calculated and rewarded. They should reward long term growth and stability of the company and should not reward high risk short term strategies that maximise the bonus for the individual. This whole episode has succinctly shown that the majority of the bankers aren't that good or particularly clever and can be easily replaced so what justifies the high rewards?
I probably sit on the other side of the fence to the rest of you, in the fact that I now actually work for a bank, and my mother used to as well. I work (or I do when im not ill) from 8am to 9pm, six days a week under immense stress, now that doesn't justify my salary, as there are others in different jobs who will work longer and harder. However, I think people dont really realise just how dire a situation this country would be in without the City and the tax and business it brings in, and simply put, if you dont pay the people that work here enough they'll just leave and go to New York where you can get 10 times the money, no questions asked. Im contractually obliged to a bonus each year based on how well I perform. I'd like to see a single person here who'd say they wouldn't take the money if they believe they have earned it, and it makes up the vast majority of my years money.
Amen to that ! Theres a lot of people posting comment without really understanding what they are posting about - there is a much much bigger picture
That assumes that other people who can do the same job just as well won't do it for less money. Not so. Moreover the kind of jobs we are talking about really run very little personal risk (unless you do a Nick Leeson). Even if banks fail, the argument is that "contracts have to be honoured". But hang on, wasn't the bonus performance related? How does the failure of a bank constitute good performance?
Sorry I don't get the "I work long and hard so deserve a bonus" train of thought. You work long and hard for a suitable recompense (salary). Bonus, as you say, is performance related, the banks unless I've missed something, have been losing money hand over fist for the last 3 years... The country might lose out on the tax receipts but until we lose the mind set of Maggie we're never going to get the country back on a stable footing. What is good for the city isn't necessarily good for the country. If you could really get 10 times the money really get it no one would work in London. I've known and worked with a number of "bankers" over the few years I've been at my current firm and they were for the most part young unattached and able to work any where in the world, they were also (mostly) money thirsty gits and if they could have earned more some where else would have jumped at it. I take my bonus every year, my company however has made significant profits for a SME for the last 10 years and isn't currently owned by the government.
The skill is having the ability to read the markets and be able to make the incomes required to be able to hit bonus figures , profits and share prices - the downside is if you fail you lose your job no matter how lofty your position ( see Fred Goodwin) If you are making huge amounts of money for any institution you expect a piece of the action via bonus - its called an incentive! the more incentive the more the productivity. The other thing to bear in mind is that banks are made up of divisions and some divisions can have made huge profits despite other having made losses - is it fair if youve made profits and hit your bonus as per your contract to have it witheld? if you do that you'll soon lose all your staff and then you will be in the sh*t and your ability to make a profit reduced which has an effect on share price, market confidence etc etc .........................................
You mean the man who lost his job with a seven-figure severance and a third of a million per year in pension from age 50? I'd like to lose my job on those terms! That is incorrect. Psychological research (by the US Treasury Dept., no less) has shown that financial incentives have a poor correlation with productivity. Sorry, but the buck stops at the top. If you are the CEO responsible for a whole bank, and that bank fails under your million-pound-worth expert management, then you forfit any bonuses.
People in my department get one warning on bad transactions/practice and then after that they're out. Its far more cut and thrust that is made out. If you screw up, you're out on your ass. Its not the same City wide, but thats what its like for me.
I dont disagree .the CEO is but one part of the operation - You'll find that any payments that were due were part of hise severence package - also how do you know what the performance indicators of his bonus were? You might also like to look at the thread title Bankers Bonuses - its not CEO Bankers Bonuses
You raised Fred goodwin as an example, so I followed it through. Whether bonus or salary, the remuneration he earned for his supposedly unique expert skills the value of which is expressed in millions, was obviously not justified. He lost his job, but at minimal cost to him. He can comfortably retire in his million pound home at 50. Not the same as you or I losing our jobs. Edit: you can disagree all you want. The research says otherwise.
