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$70b of bonuses still being paid out
Comments
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OK. You imply by that the banking system we have is great.
our banking system is better than most countries - however i never said and don't think that it is great.
i was just trying to show how the bonus system worked.Mr AE Taxpayer doesn't see it as all that great at the moment. Is he wrong? If he is wrong, then why?
Unfortunately, due to the circumstances in the global economy I don't think MR AE Taxpayer had much choice. If it was left alone we would be in a much more major and serious mess.0 -
our banking system is better than most countries - however i never said and don't think that it is great.
i was just trying to show how the bonus system worked.
Unfortunately, due to the circumstances in the global economy I don't think MR AE Taxpayer had much choice. If it was left alone we would be in a much more major and serious mess.
Yes, I do agree it had to be done. Mr Taxpayer was caught between a rock and a hard place. Mr Taxpayer was taken to the cleaners by the banks who had his full trust and gambled it. The question is - because it had to be done should the remaining bonuses on the table be paid. Mr Trader says, 'yes, it is part of my contract'. I think Mr AE Taxpayer would say 'no, contract irrelevant your company was bankrupt'.
Has Mr Trader ranked as a legal preferential creditor for his bonus as the company was bankrupt or is he just being given preferential treatment? I do think Mr Taxpayer has to accept the law even if it seems inequitable.
As for UK banks - were they saved from bankruptcy or just taken over for stability sake and to stop manic panic?
Did all the banks really gamble as much as is implied by the lack of trust or is it just a few did and the rot has now stuck on the others as well?0 -
to my simple mind the economy is oiled by the banks and the staff in thos organisations.
Without that oil the wheels of industry cannot move as we have seen, we are in a society based on borrowing so when it dries up things halt.
As a result of this it appeared to me that the banks had to get funding from somewhere and as the government is essentially responsible for the economy they had to make it work.
As for the banks and bonuses I am shocked and appauled that these bankers are able to use public funds to use as they see fit. But then tyo me there is little difference to a politician or a banker these days - both leeches of the consumer and taxpayer.
My opinion is that the companies that went over - the top staff in those companies should be called to account and personally bankrupted so they understand how the average income earner feels when they are unale to continue to live and pay for the basics of life due to the banks.
Brown is going to have to do another U-Turn because not allowing dividends to be paid is ruining the investment initiative and its something he forgot about - its not just the bakers that are share holders its the public.
This goes further to the local authorities and their ability to effectively lose our money and still maintain their job - the public sector heads under Brown have all been able to mess it all up with no accountability!
I am surprised some of these top councellors have not had fly tipping on their driveways yet!
The whole state is disgraceful!
D0 -
there is little difference to a politician or a banker these days - both leeches of the consumer and taxpayer.
This goes further to the local authorities and their ability to effectively lose our money and still maintain their job - the public sector heads under Brown have all been able to mess it all up with no accountability!
D
Politicians earn a fraction of what bankers earn and are constantly under public scrutiny. And you can vote out politicians if they make a mess of things. Senior bankers earn sums of money unimaginable to most of the working population and appear to be accountable to no one. They also appear to be largely anonymous figures.
I assume when you mention local authorities you are referring to the situation with regard to Icelandic investments. Two points; 1. The sums of money involved are (relatively) quite small. 2. All is not yet lost - many (most/all ?) LA's will probably get their money back. And of course they are accountable because you can vote them out.0 -
Yes, I do agree it had to be done. Mr Taxpayer was caught between a rock and a hard place. Mr Taxpayer was taken to the cleaners by the banks who had his full trust and gambled it. The question is - because it had to be done should the remaining bonuses on the table be paid. Mr Trader says, 'yes, it is part of my contract'. I think Mr AE Taxpayer would say 'no, contract irrelevant your company was bankrupt'.
Legally I'm not sure that this could be done unless it was done by Parliament which would never happen maybe because of 40% tax reveneues but that's only a gueess why.Has Mr Trader ranked as a legal preferential creditor for his bonus as the company was bankrupt or is he just being given preferential treatment? I do think Mr Taxpayer has to accept the law even if it seems inequitable.
The article was talking about companies that were not bankrupt and were in business so this isn't really relevant. For Lehmans I understand that all trader bonus payment will not be made - I read this somewhere but can't remember where.
There argument may be that the banks have generated massive tax revenue for the government in the past few years so they have to deal with these issues - this isn't my opinion by the way...As for UK banks - were they saved from bankruptcy or just taken over for stability sake and to stop manic panic?
I don't know the answer to this - Northern Rock and B&B are a different problem to what RBS or HBOS are exposed too which are global issues.Did all the banks really gamble as much as is implied by the lack of trust or is it just a few did and the rot has now stuck on the others as well?
Trust is a massive issue in the City. I don't think banks gambled, they just never believed that there would be a lack of liquidity that is there is now.
I would say it's more a lack of contigency rather than gambling...
Forget credit crunch it's simply a liquidity crunch.0 -
Legally I'm not sure that this could be done unless it was done by Parliament which would never happen maybe because of 40% tax reveneues but that's only a gueess why.
The article was talking about companies that were not bankrupt and were in business so this isn't really relevant. For Lehmans I understand that all trader bonus payment will not be made - I read this somewhere but can't remember where.
There argument may be that the banks have generated massive tax revenue for the government in the past few years so they have to deal with these issues - this isn't my opinion by the way...
I don't know the answer to this - Northern Rock and B&B are a different problem to what RBS or HBOS are exposed too which are global issues.
Trust is a massive issue in the City. I don't think banks gambled, they just never believed that there would be a lack of liquidity that is there is now.
I would say it's more a lack of contigency rather than gambling...
Forget credit crunch it's simply a liquidity crunch.
With respect, I disagree. The problem is a lack of trust. Banks don't trust their counterparties to be able to come up with the goodies when it is time to repay. Hence the massive difference between overnight and 3 month LIBOR. Given that everyone 'knows' that interest rates are going to fall in the short term, 3 month LIBOR if anything should be less than overnight, not higher.
The lack of trust manifests itself in a unwillingless to lend to anyone and that is the credit crunch.0 -
With respect, I disagree. The problem is a lack of trust. Banks don't trust their counterparties to be able to come up with the goodies when it is time to repay. Hence the massive difference between overnight and 3 month LIBOR. Given that everyone 'knows' that interest rates are going to fall in the short term, 3 month LIBOR if anything should be less than overnight, not higher.
The lack of trust manifests itself in a unwillingless to lend to anyone and that is the credit crunch.
have a look at my second last paragraph Gen regarding trust or i'm misreading your post because we're saying the same thing... :-)
i mentioned the having of a contingency plan as a potential answer to the credit crunch or even dealing with todays issues in a better way.0 -
Contract or no contract, due to the economic situation, NO ONE in the banking sector, which has ruined our economy, should get a bonus!
It will be absolutely disgusting if they do.
contrary to popular belief that all bank employees are traders earning six figure salaries are you suggesting that the cleaners, the catering staff, the people behind the counter in the branch, all who work for the banks on average salaries are behind this mess and should be held accountable?0 -
contrary to popular belief that all bank employees are traders earning six figure salaries are you suggesting that the cleaners, the catering staff, the people behind the counter in the branch, all who work for the banks on average salaries are behind this mess and should be held accountable?
I think the discussion and outcry in regards to the massive bonus pool centers on the investment banks, not the high street banks. Not sure if the high street banks of the high street leg of an investment bank share equally large bonus pool? Wouldn't think so, though.
Cleaners and catering staff are usually not part of the bank staff, they are usually employees of the company which contracts out its services to the bank, and they do not share the bonus pool.
http://www.guardian.co.uk/money/2006/nov/05/accounts.business0 -
I think the discussion and outcry in regards to the massive bonus pool centers on the investment banks, not the high street banks. Not sure if the high street banks of the high street leg of an investment bank share equally large bonus pool? Wouldn't think so, though.
Cleaners and catering staff are usually not part of the bank staff, they are usually employees of the company which contracts out its services to the bank, and they do not share the bonus pool.
http://www.guardian.co.uk/money/2006/nov/05/accounts.business
The bosses and traders at HSBC did pretty well when I was at HSBC.
When I left in May 2000 (FX back office) I was on £23.5k IIRC and got a bonus of maybe £4k(?).
You are right about the cleaners and caterers.0
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