Wednesday, 13 January 2010

Who'd defend a banker?

Simon Jenkins is in fine polemical mode in the Guardian this morning against the forthcoming round of bankers' bonuses;
There will be a tidal wave of rage. Over the next two weeks the executives of the leading British and American banks will announce that some £50bn is to be taken from accumulated profit and handed over, not to shareholders or taxpayers, but to themselves. It will be the most outrageous contempt of ­democratic authority in modern times.
Yes, well. They'll get theirs. And when the mob come for them with burning brands and lengths of hempen rope, there will be few enough who will care to defend them. I certainly shalln't.

Yet the London property market was driven to a significant extent by those bonuses, trickling down to boost the value of even my own modest abode. Londoners who look forward to their homes regaining their 2007 bubble values shouldn't really protest overmuch about the bankers.

10 comments:

Letters From A Tory said...

"London property market was driven to a significant extent by those bonuses"

Not sure about that, the property market was driven up faster in other areas of the country than in London, even where no bankers bonuses were really evident. Places like Northern Ireland saw massive price hikes.

Savonarola said...

Property prices were/are driven by cheap money.
Cheap money was organised by Brown/BoE as a political desirable.(Corruption of inflation stats+refusal to take note of asset prices in making monetary policy)
The Godfather of cheap money was Alan Greenspan(Sir thanks to Brown who adored this fraud)
Bankers were bit players. Give them cheap money and they will lend recklessly.

Budgie said...

I do not defend the extraordinary bonuses. I am always wary of the whine, whether from big business or state institutions like the BBC, that they have to pay fantastical sums to get the 'top people'. There are usually plenty of people who can step into top positions but are prevented by internal politics, not by ability.

I would certainly 'defend' 'bankers' from causing the bank meltdown and credit crunch. That was almost entirely the fault of politicians in the USA, the UK and the Eurozone.

English Pensioner said...

I have no objection to bonuses, provided that they have been earned. But I fail to understand how a bonus can be "Guaranteed", surely a guaranteed bonus is an oxymoron. Too many bonuses seem to be paid to people for doing just what they are supposed to be doing, nothing extra.
Now I'd be happy to pay a bonus to any top civil servant who genuinely reduces his department's budget and expenditure. A once only bonus based on the year's savings would be worth while paying!

Scrobs... said...

"Now I'd be happy to pay a bonus to any top civil servant who genuinely reduces his department's budget and expenditure. A once only bonus based on the year's savings would be worth while paying!"

The priciple should work EP, but in reality the next year sees the bar being lowered so that bonuses can be paid to do the same as the current year, because that's what happened the previous year.

Eventually there will be a bonus in town halls, for just breathing slower, to reduce carbon dioxide. That'll set the staircase manufacturers a quandary, but elevator shares will take off...

idle said...

A. Always a bad plan to justify any argument by an increase in house prices.

B. Windfall tax on these bonuses + 40/50% income tax rates results in over half this amount being returned to taxpayers.

Anonymous said...

Get real please. Bankers that are more than 50% publicly owned are civil servants. Paying bonuses to people who are simply doing their job in a government donated windfall( borrow at 1/2% and start lending at 6% = min 1100% profit on capital invested)Even I could bring home the bacon at those rates.
Jonathan Ross them.

DKMcG

Budgie said...

What on earth do you mean - "Bankers that are more than 50% publicly owned [and] are civil servants"?

Northern Rock is completely owned by the taxpayers (government), RBS is 84% owned, and Lloyds is about 43% (and only because of HBoS). No other banks (apart from the BoE) is UK government owned. Not Barclays, not HSBC, not Santander, and not the numerous other banks operating in the City.

Anonymous said...

to clarify , bankers that are employed by banks that are more than 50% publicly owned are by definition ,"civil servants" and should be paid accordingly, at best . Privately owned banks can pay their employees whatever they wish as they have to answer to their owners in due course . I note you do not dispute how easy it is for them to make obscene profits at public expense , maybe some consideration of this should be made when the "private " banks create their bonus pots.
DKMcG

Budgie said...

Anon 15:32: oh dear. I am more concerned that (some) banks (not 'bankers') have made obscene LOSSES at public expense, rather than profits. Of course banks are now doing as they have been told by the government: increasing their capital; which they can only do at our expense - hence the 'obscene profits'.

You are also not clear about your definition of 'bankers': tellers? dealers? or Fred Goodwin? Now there is someone who ought to be in prison (alongside his mate Gordon). Two incompetents side by side in jug.