Just wondering how you lot feel about the banking industry and their pay.

What actions should be taken (or not)?



EDIT: My avatar looks a bit silly on this post  :?

none.
Its not the traders who caused the problem, its the people lending money to those who cant afford it.
All it will do is drive business away to other countries. I know a few traders & their companies are considering moving..
1 is moving to switzerland, taking the best staff & laying the rest off.

Its a free market & they earn their bank hundreds of millions

The problem with limiting some banks and not others is you make the one you limit uncompetative. The main objective for the nation is to return the bailed out banks to profit as soon as possible, get their shareprices back up and make a profit from the governments investment. By restricting pay deals for emplyees at these banks you limit the tallent they can employ and retain.

Banks like HBOS are currently hiring hundereds of contractors because people wont work full time for them because of the media scrutiny and pay restrictions. Contractors cost far more than full time empolyees.

We need the best possible people who are going to make the most money for the bank, its important to remember that someone will only be paid £40 mil if theyve earnt 10 times (probably more) that for the bank.

I have no problem with people being paid what they earn. In fact, that is in a nutshell what I believe should always happen. I dont care if youre the CEO of HBOS or the man who collects my rubbish bin, if youve done your job well you should be paid well. If youve done your job better than would normally be expected, you should get a bonus (exactly how a bin man goes about doing better than expected is up for debate, but bear with me here!)

My problem is with the situation we have seen in the last few years with "guaranteed bonuses". Im sorry, but if you can sit on your arse all year, not work a minute past 5PM and just barely do enough to avoid being fired and still get your "bonus", then its not a bonus at all, thats salary.


All I ask is that wages and bonuses be what they say on the tin. Thereafter they can be whatever value they like.

The fundamental problem here is risk... not with people clocking off at 5pm and still getting epic bonuses.

The way lots of bankers were/are paid has encouraged a particular type of short-term risk-taking beyond whats necessarily good for the market - if they could limit the bonuses in such a way that incentivised behavior that was proportional to the associated risk to the system, that would be good.

Probably extremely hard to do though.

Also whoever said it has to happen to everyone if it happens at all is spot on.

Quote from: MongooseMy problem is with the situation we have seen in the last few years with "guaranteed bonuses". Im sorry, but if you can sit on your arse all year, not work a minute past 5PM and just barely do enough to avoid being fired and still get your "bonus", then its not a bonus at all, thats salary.

Those are usually used to entice people from other banks - by moving to a new firm someone might be giving up a large bonus - in order to make it worthwile for them to move then the new firm can gaurantee to pay them XYZ amount in order to compensate them for this - if the team they then join turns out to have a bad year or something they wont have lost out by moving - it generally doesnt mean that someone is going to sit on thier ass as if you were that sort of person then youd unlikely be sought after in the first place. The gauranteed bonuses are only likely to be for the first year anyway.

as far as the OPis concerned....

tbh... a bunch of people in credit screwed up but so did the regulators, so did the credit agencys and so did the mortgage salesmen and so did all the rednecks in bumf**kville Alabama who lied on thier mortgage application forms, borrowed more than they could afford and then didnt pay back thier loans.... to just blame the banks for this fiasco, as the press seem to be doing, is a bit shortsighted.

gordon brown made a speech about tax havens and cracking down on them, the EU is trying to crack down on hedge funds - tis a bit ridiculess as neither tax havens or hedge funds had much to do with any of the crisis - when the FSA banned the shorting bank stock it still plummeted.

The fact is that even for the troubled banks they still have very profitable arms, to not adequately compensate people who are generating money is dumb - especially when a large portion of the workforce is international and would be just as happy living in Zurich or Singapore as say London/NY - weve got a huge financial services sector in the UK and the govt is really shooting itself in the foot if it starts to interfere too much.