Tories and their chums.

[Park Life 71]

Curb the banks? The government has propped them at every opportunity

 

Here's the story of how Cameron and Osborne secretly tried and failed to kill tougher European rules on bankers' bonuses

 

 

It's bonus season, the time of year when bankers show us what they really believe. As soon as they get their money, they spend much of it on land and houses. They know that these are safer investments than the assets in which they trade. If they trash the economy again, they at least will survive.

 

This year the frenzy will be almost as bad as ever. But it could have been worse. Here is the story, revealed by a leaked document, of how our government covertly tried – and failed – to kill tougher European rules on bankers' bonuses, and how the chancellor of the exchequer appears to have misled parliament.

 

Before I explain what the government did, let me remind you of a few of the statements the Conservatives made about bonuses while in opposition. In February 2009, David Cameron announced: "Where the taxpayer owns a large stake in a bank, we are saying that no employee should be paid a bonus of over £2,000." Stephen Hester, the chief executive of RBS – 84% owned by the taxpayer – is now said to be lining up a bonus of around £2.5m.

 

In October 2009, George Osborne announced that he was calling on the Treasury to stop retail banks "paying out profits in significant cash bonuses. Full stop." Bob Diamond, the chief executive of Barclays, is due to make around £8m this year, half of which is likely to be cash.

 

In April 2010, a Tory policy paper observed: "News that bank bonuses this year are expected to total £7bn shows that Gordon Brown's claim to have ended the era of the big bonus was ridiculous." Bank bonuses in 2011 are expected to total £7bn.

 

A fortnight ago, a Downing Street spokesman admitted that the government would, after all, make no attempt to limit the size of bonuses. This much we knew. But what the leaked document shows is that even as the government claimed to be seeking strong international rules to curb the bonus frenzy, it was secretly lobbying to prevent them from being passed. The document is, or should be, big news, but so far it has been covered in just one place: Tribune magazine, where the freelance reporter Ben Fox broke the story.

 

As Cameron pointed out before he took office, the UK's bonus culture "encouraged short-term risk-taking instead of rewarding the long-term interests of shareholders and the public." This risk-taking helped cause the financial crash. The EU wanted to prevent it from happening again, by reducing the incentive to chase short-term gains. It hoped to update the Capital Requirements Directive, to ensure that bankers could take only a small part of their bonus as an immediate cash payment. The rest of the bonus would be a mixture of cash and shares, held over for up to five years. If, during that time, the bank did worse than expected, some of the promised money would be clawed back.

 

This would force bankers to think about the future as well as the present. The European draft proposed that no more than 30% of smaller bonuses and no more than 20% of larger ones could be paid upfront in cash. The British government had other ideas.

 

 

http://www.guardian.co.uk/commentisfree/20...propped-them-up

 

 

It's a giggle innit?

[LeazesMag 0]

how many pledges have they broken now

[Happy Face 29]

I couldn't be less concerned about bankers bonuses. They can be rewarded however their shareholders see fit. They're extremely clever people and make their bosses a lot of money.

 

It's an emotive issue to wind up white van man who can't comprehend being on that kind of money.

 

It's bank equity that needs to be regulated. Watch the doc 2J recommended last week on the BBC iplayer. Peston knows the score.

[NJS 4446]

I know this is selfish but I'd like to see any "attack" on bonuses have the salary level as a starting point. A lot of admin/support/IT workers are used to circa 10% cash bonuses which are taxed at 25/40% anyway and I'd have no interest in a few k (in the vast majority of cases less than 10k) worth of shares in the bank or whatever and would just like to see cash.

 

Actual traders are different but for most staff the "bonus" is just a semi-fixed factor within a salary package.

[AgentAxeman 199]

[Rob W 0]

I couldn't be less concerned about bankers bonuses. They can be rewarded however their shareholders see fit. They're extremely clever people and make their bosses a lot of money.

 

It's an emotive issue to wind up white van man who can't comprehend being on that kind of money.

 

It's bank equity that needs to be regulated. Watch the doc 2J recommended last week on the BBC iplayer. Peston knows the score.

 

 

the trouble is WE pay for the bonuses but have no say in how they are alocated

[Happy Face 29]

I couldn't be less concerned about bankers bonuses. They can be rewarded however their shareholders see fit. They're extremely clever people and make their bosses a lot of money.

 

It's an emotive issue to wind up white van man who can't comprehend being on that kind of money.

 

It's bank equity that needs to be regulated. Watch the doc 2J recommended last week on the BBC iplayer. Peston knows the score.

 

 

the trouble is WE pay for the bonuses but have no say in how they are alocated

 

In what sense?

 

In the same way WE pay the wages at Newcastle?

[Rob W 0]

You have to use a Bank and they are an oligopoly - they can charge what they like - you have no choice and no say

[Happy Face 29]

So yes then, just like Newcastle United.