Easy One For Orsborne....?

[ToraToraTora]

http://www.bbc.co.uk/news/business-25739565, I work in a bank and even I agree, Osborne should block the excessive bonuses, not sure why the meeja seem to think it's a difficult one, easy peasy!

[Gromit]

How this will pan out.

Labour make this siggestion.
Chancellor rejects it.
Everybody except the Chancellor think it is a good idea.
Chancellor is forced to do something 99% the same as Labour's subggestion, but not THE same. And says what he is doing is not copy Labour and is better.

[Gromit]

http://www.bbc.co.uk/news/business-25739565

[Unsureme]

TTT,I hope you don't mind me asking but,if you work in a Bank how are you on AB most of the day,every day?

[baza]

does anybody actually WORK in a bank?

[ToraToraTora]

I'm not, view my answers and analyse and you'll see that there very large gaps, generally I'm here when I'm waiting for something.

[jake-the-peg]

If it's cash or short term benefits I agree - easy

If the bonuses are in stock that vests over say a 2 year period I'd be OK with that.

Let's not lose sight of the purpose of this - it's to discourage short term gamble investments that look good long enough for fly-by-nights to look good and cash in before it all goes wrong.

Slow release bonuses also have the benefit of helping to promote retention of successful staff.

If staff don't like the idea of that - you have to question their motivation don't you?

[New Judge]

I'm surprised, 3Ts.

Apart from the institutions which the government (i.e. the taxpayer) has rescued I see no justification for government interference in the pay arrangements of any private concern. It is true that the taxpayer is protecting the deposits of private savers and because of this regulation of the banks’ affairs is necessary. But where banks have gone belly up it has not been because excessive bonuses had been paid thus leaving the bank with no money. It was poor regulation and irresponsible lending that led to many of the deficits.

It’s a slippery slope when government sees fit to introduce pay restraint, particularly when it is for a single profession or part of a profession. And in any case, the suits will still get their dosh - they will simply negotiate higher basic pay.

[Gromit]

A bit off topic but,

When the banks that needed bailing out were making their disastrous trades and buying toxic assets, they were paying the people who were making those terrible decisions, bonuses. Nothing to do with the question, but worth reminded everyone.

[emmie]

worth also reminding that people are also responsible, taking out loans when they knew in their heart of hearts they couldn't repay them, banks are at fault, pushing this doctrine but people should question their own judgements and see that taking money that isn't yours, in the hope it will tide you over, or buy that must have dress, shoes, flat just doesn't cut it, called personal responsibility - lovely to have nice things, including a home to call your own, but if you know it will be damn near impossible to keep up the payments, you really shouldn't consider it.

[jake-the-peg]

// I see no justification for government interference in the pay arrangements of any private concern.//

Really?

How about because the past arrangement fuelled a speculation based bubble that caused one of the biggest market crashes the western world has ever seen and that we're still paying for?

£500 billion for RBS alone!

- that not justification enough for you?

No?

Well how about the fact that RBS is not a purely private concern? - Through the government we hold over 25% of RBS shares

[Gromit]

emmie

The loan defaulters were not in this country they were in the US. Because the people selling mortgages were on bonuses, they sold them to people who never had a chance of paying them back. They received there bonuses and then moved on. When those loans started to be unpaid, the sellers had long since scarpered.

The toxic mortgages were bought by investors working for British banks and when they turned out to be worthless, the banks were left with gaping holes in their finances. Perhaps if the UK investors were not also on bonuses, then they might have been a bit more careful about what they were buying.

[jake-the-peg]

//worth also reminding that people are also responsible, taking out loans //

Absolutely Emmie but the major responsibility companies have to their shareholders is to do business in a responsible way that does not endanger the investments of its share-holders.

If RBS had started giving loans to druggie, drunk and 5 year old that knocked on it's door you'd not be blaming the winos that took the money! you'd (rightly) be pointing out the recklessness of those at the helm.

You'd even have a point if the shareholders took the lossess RBS incurred on their behalf

But they didn't - we did

RBS cost everyone of us in the country £10,000

Yep you I and every single person you see today has to find 10 grand for that

And they want to go on as if nothing had happened

[emmie]

but the point is some people with no visible means of support, or not sufficient, and i include myself in that, were offered loans, some not inconsiderable, and until i told the bank please stop sending me the loan letters i was still getting them. And i reckon that many did take up the offers, to buy goods, and deposits for homes,

[zebo]

Why should anyone in any job get a bonus for doing what they're already paid for doing?

[New Judge]

I think I mentioned, jake, that those institutions where the taxpayer has a stake, then the government should have a say (in the same way as any other shareholder should). But I don't think the bonus arrangements caused the financial crisis or that it would have been averted had those individuals been on a different pay regime. I would suggest that they would still have made the same or similar decisions.

I'm all in favour of robust regulation to control the activities of institutions which are underwritten by the taxpayer. But that regulation should not extend to the pay policies that they think fit to adopt or to control the amount or the manner in which individual employees are paid.

[ToraToraTora]

Judge, ordinarily I would agree that the governement should not interfere this way but in this case I was thinking mainly as a share holder, in the case of RBS anyway, the goverenment could legitimately object without any government strong arming needed.

[ToraToraTora]

jake the RBS has cost nothing in fact it's made a fortune, the current price of governement holdings is many times what they paid. Ok it will take time to sell them off an realise the profit but it's rather misleading of you to say we each paid 10k.

[New Judge]

Yes quite agree, TTT. As I said, in the case of banks where the government has been forced to take a share they should have the same rights as any other shareholder.

[ludwig]

Apparently we'll lose all the banking talent if they don't get massive bonuses for no good reason. I'm not sure how we'd cope without the brains that have managed the UK banking sector so brilliantly over the last 8 years or so.

[dave50]

It depends on the reasoning behind it. If it's of benefit to everyone else then maybe, if it's just for spite then no.