Killing the goose that lays the golden eggs...in London

MacMickster

Wild_Rover wrote: »

the government is entitled as an employer to decide how much to pay its staff. It has no business telling a company how to pay its staff. The UK government does not have the power to determine that in the UK

The UK government certainly does tell companies how much they pay their staff - it is called the minimum wage.

These new proposals don't appear to be trying to introduce a maximum wage - just a maximum bonus. I can understand why governments would want to discourage the corporate risk-taking which was spurred on by the high-bonus culture in banks, and ended with governments (taxpayers) having to bail out those banks. I would have thought that the banks themselves would want the same.

Surely the answer is to award a pay rise to those who have shown their worth to the firm over a number of years, rather than a huge bonus encouraging short-term risk taking to try to gain one.

Thrugelmir

chewmylegoff wrote: »

Happy for the EU to enact this. We'll veto as with Tobin Tax and thus it will just cement London's position as the primary financial centre in the EU.

Tobin tax will hit Europes banks hard.

Spirit_2

shortchanged wrote: »

Would it be such a bad thing not to have an economy so reliant on the financial sector?

Thats the key bit at present. The UK is reliant on the financial sector. What do you propose to replace it with and who will invest in it to establish it?

gagahouse

Thrugelmir wrote: »

Tobin tax will hit Europes banks hard.

And UK, US and Asian banks. In fact, any bank anywhere that deals with a Tobin tax zone area based counterparty or instrument originating from that area.

So not so great for London. They deliberately included this 'extra territoriality' to block the obviously easy ways to circumvent it by moving the trading books outside the Tobin tax zone. I wonder though how they are going to enforce collection outside the zone, especially outside the EU.

Graham_Devon

Something I found pretty interesting and maybe thought changing was said earlier....

Many of us, me included I guess, ae suggesting it's not the EU's business to impose this. BUT, is it? The EU and all of it's taxpayers have massively subsidised and bailed out the banks.

So, on that note, should the EU be allowed a say? I dunno. I'm on the fence. Just seems a little rich for the banks to go cap in hand with demands to the EU, but then demand that nothing which "hurts" them is put into place.

I'm stuck now. I thought it was no business of the EU to do this, but the more I think about it, and the more I think about how much support the EU has given the banks (sure, a lot of it for their own gain), the more I'm open to the suggesting that actually, the Eu may have a point.

We need to put this in the contaxt of the gambling these bonuses encouraged. Commit fraud (PPI, repackaging, Libor) and your bonus was likely to be higher. Thats problematic, especially as were now the ones paying.

Truly sick of bankers threatening to move though. Just go and be done with it instead of threatening it constantly!

Generali

BertieUK wrote: »

This is a result that we would like to see happen, rewards from investments made, but we here in the UK seem to be getting more negatives than ever before.:(

Very true but then the Government weren't taking investment stakes in successful companies they were bailing out insolvent banks.

Let's not forget that the current SNAFU wasn't just caused by banks. Governments forced banks to buy more AAA rated assets so supply filled the void. Credit ratings agencies gave baskets of turds AAA ratings. Regulators were perfectly happy for banks to hold that crap. Governments were very happy to spend the taxes from the resulting boom on crazy vanity schemes.

To blame bankers alone is just scapegoating. It was pretty obvious what was happening and nobody wanted to stop it. Hell, at one bank I worked for our Intranet had a news feed from a company called Greed and Fear, so named because those are meant to be the drivers of asset prices, an they could see many banks were holding dud assets in 2004. That company is (was?) run by a former Telegraph City editor, hardly a paranoid nut job.

BertieUK

Generali wrote: »

Very true but then the Government weren't taking investment stakes in successful companies they were bailing out insolvent banks.

Let's not forget that the current SNAFU wasn't just caused by banks. Governments forced banks to buy more AAA rated assets so supply filled the void. Credit ratings agencies gave baskets of turds AAA ratings. Regulators were perfectly happy for banks to hold that crap. Governments were very happy to spend the taxes from the resulting boom on crazy vanity schemes.

To blame bankers alone is just scapegoating. It was pretty obvious what was happening and nobody wanted to stop it. Hell, at one bank I worked for our Intranet had a news feed from a company called Greed and Fear, so named because those are meant to be the drivers of asset prices, an they could see many banks were holding dud assets in 2004. That company is (was?) run by a former Telegraph City editor, hardly a paranoid nut job.

Generali... We the public took so much in good faith, that we held Banks in great esteem and placed our trust in everything that they did for us and believed that our hard earned savings were going to give us all a fair return. That is the way that I have always remembered banking.

Now I see a total different picture being painted of banks and the taxpayer having to bail them out because they have appeared to have run a debt of millions of pounds.

I admit that I know very little about how the business of banking is run but it looks as though outside forces, as you mentioned Governments forced banks to buy more AAA rated assets so supply filled the void and were very happy to spend the taxes from the resulting boom on crazy vanity schemes.

Sounds criminal to me, it is to easy for Governments to blame the Banks for their own almost corrupt methods of operation, its sounds almost like being forced to apply corrupt accounting within the banking system by Governments.

What the hell do Governments know about banking?

Generali

BertieUK wrote: »

Generali... We the public took so much in good faith, that we held Banks in great esteem and placed our trust in everything that they did for us and believed that our hard earned savings were going to give us all a fair return. That is the way that I have always remembered banking.

Now I see a total different picture being painted of banks and the taxpayer having to bail them out because they have appeared to have run a debt of millions of pounds.

I admit that I know very little about how the business of banking is run but it looks as though outside forces, as you mentioned Governments forced banks to buy more AAA rated assets so supply filled the void and were very happy to spend the taxes from the resulting boom on crazy vanity schemes.

Sounds criminal to me, it is to easy for Governments to blame the Banks for their own almost corrupt methods of operation, its sounds almost like being forced to apply corrupt accounting within the banking system by Governments.

What the hell do Governments know about banking?

Banks aren't blameless in all of this, don't get me wrong. PPI in the UK is really part of the same continuum as people in the US going round homeless hostels with pre approved credit card forms and lying to people to sell them low start mortgages, not telling them the payments would rise.

Part of the problem IMHO is the shift from bank tellers being clerks to being salesmen. Ironically enough, AIUI that trend started in the UK with Nat West, now part of RBS!

The solution here has to be to allow insolvent banks to go bust. If people think it's a good idea to bail out some of the savers first then that's fine I guess although I wouldn't do it beyond a few grand in the current account. If you do that and make banks to back to being unlimited liability partnerships you might find a few less corners being cut and a longer term view being taken.

Government regulation is rarely the answer. It didn't help in the NHS, it didn't stop criminals selling tainted horse meat, it didn't stop banks going bust. On every Government minister's wall should be the motto, "Don't just do something, stand there!"

michaels

I have to agree, regulation and govt support seem to be part of the problem rather than the answer - how many would have put their money in to ice save if there had not been an implicit guarantee, instead high rates would have been treated with the suspicion they deserved.

And of course if consumers got in to the habit of making their own choices and standing by the consequences then the economy might work a lot better.

Graham_Devon

michaels wrote: »

And of course if consumers got in to the habit of making their own choices and standing by the consequences then the economy might work a lot better.

Think this is true.

As with everything, even the horsemeat scandal, it's us demanding it. Were suckers for buying the absolute cheapest and don't really care about quality in this country.

High street demise is partly our fault too, but this is where (local) government interference comes in, making it nigh on impossible for shoppers and business alike.