Posted by Paul Samael on Tuesday, January 31, 2012 Under: Random thoughts
Lots of controversy about bankers here in the UK this week, with the CEO of the nationalised Royal Bank of Scotland eventually (but rather grudgingly) waiving his bonus of just under £1 million (only after a threat of a Parliamentary vote against it) and former CEO Fred "the Shred" Goodwin being stripped of his knighthood (so no need for me to put a "Sir" in front of his name there). But these are just token gestures really - very little is being done to get banks to rein in these ridiculous remuneration packages across the board.
The government must know that it needs to curb bankers' pay if we're to avoid this sort of thing happening again. I would like to see it leading by example and saying to the rest of the industry "OK, let's try to prove that you can actually run a bank without paying the head guys ridiculously vast sums of money". But because it's bailed RBS and Lloyds out, it's also desperate to put them back on their feet and sell them at a tidy profit asap - and as a result, the government seems to have swallowed the bankers' self-serving argument that unless vast remuneration packages are placed on the table, no one who's any good will agree to do the job, so all the best people will leave - and we as taxpayers will just be stuck with an absolute horror of an investment. It's yet another "heads we win, tails you lose" argument from the banking industry (if only they had been as good at understanding the risk of complex financial products as they are at self-justification).
The time to have tackled bankers' pay would have been when the heads of all the banks were sitting in the Treasury with the Chancellor of the Exchequer and the Head of the Bank of England begging to be bailed out. That, it seems to me, was the one point in the process where we taxpayers effectively held a gun to the banks' heads and had some real leverage. Curbing excessive remuneration should have been made part of the price of state support and banks like Barclays (which didn't take hard cash but still benefited hugely from an implicit state guarantee) should have been forced to sign up to it as well. But now that our fortunes as a country are tied to the fortunes of the state-owned banks, the fear of losing all your best people to other, non-state owned banks makes it much more difficult to tackle the problem.
All of which brings me back to "The Hardest Word", my short story about kidnapping an investment banker - now on nearly 80 downloads from Smashwords and nearly 50 from Scribd, don't know how many from BookieJar (you can't tell). So far, I think Smashwords is definitely the best platform to be on and I have noticed something of a pick-up in downloads there since I posted a book trailer for it on YouTube (the trailer is accessible on Smashwords and you can access it here).
In : Random thoughts
Tags: bankers "banking crisis" "financial crisis"
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