Rbs To Pay Out Millions In Bonuses

[R K]

http://business.timesonline.co.uk/tol/busi...icle5663873.ece

The proposed payments are expected to reach tens of millions of pounds — possibly hundreds of millions — with some star bankers in line for six-figure payouts.

UK Financial Investments (UKFI), the Treasury-run body that holds the Government’s RBS stake, is understood to have given its blessing in principle to limited payments, although it has yet to see the details. “There’s no blanket objection to bonuses, but they are subjecting them to intense scrutiny,” said one well-placed source. “The [bonus] numbers will be very large and very difficult for the general public to understand.”

The investment banking arm of RBS, a division known as global banking and markets (GBM), paid out £1.83 billion in remuneration for 2007, most of which is thought to have been bonuses. Although the proposed payments will be sharply lower this time, RBS still plans to make payments.

The bank, now 68 per cent owned by the Government, is due to report its 2008 results in three weeks, when it will confirm a loss of between £7 billion and £8 billion, after which it wants to pay out the bonuses within weeks. John McFall, the chairman of the Commons Treasury Select Committee, said: “Some of these banks are living in the shadows, thinking that life will resume as it was in a few years’ time. But life has changed and they need to face up to it. A reality check is required.”

Blatant, in your face, fraud.

Blackfriars bridge just isn't long enough. :angry: :angry: :angry:

[ScaredEitherWay]

It used to be the haves and the have nots.

Now we're the have nots and they're the cant's

Edited February 5, 2009 by ScaredEitherWay

[Papitogrande]

http://business.timesonline.co.uk/tol/busi...icle5663873.ece

Blatant, in your face, fraud.

Blackfriars bridge just isn't long enough. :angry: :angry: :angry:

“The [bonus] numbers will be very large and very difficult for the general public to understand.”

That's where you are going wrong Red me old mate - you don't understand. Far too complicated for the likes of you.

[shedfish]

There’s no blanket objection to bonuses

i disagree

[shedfish]

they should get a haircut

[corevalue]

“The [bonus] numbers will be very large and very difficult for the general public to understand.”

That's where you are going wrong Red me old mate - you don't understand. Far too complicated for the likes of you.

Oh no, we understand the numbers all right. We just can't get to grips with the logic or morality of paying bonuses for negative performance.

[wonderpup]

very difficult for the general public to understand

I think joe public will understand very well that while he is losing his job, his home, his business, his pension, his entire f*cking future- those who made that happen will getting paid off with his money.

What could be clearer than that?

[BXLONDONMAN]

they should get a haircut

BUMP iii

the sooner the better...

[GregG]

Oh no, we understand the numbers all right. We just can't get to grips with the logic or morality of paying bonuses for negative performance.

Don't think of it so much as "negative performance". Think of it as "profit, that has yet to materialise".

Now do you get it?

[Scunnered]

The [bonus] numbers will be very large and very difficult for the general public to understand

I do like that; I like it a lot. It would have been better if he'd replaced "the general public" with "puny mortals" though.

Edit: actually, "sheeple" would have been just perfect.

Edited February 5, 2009 by Scunnered

[BXLONDONMAN]

Don't think of it so much as "negative performance". Think of it as "profit, that has yet to materialise".

Now do you get it?

ok we get it,,what did you take to get to this level of thinking !!!

is it legal ....

[BXLONDONMAN]

ok we get it,,what did you take to get to this level of thinking !!!

is it legal ....

just joking...

[daedalus]

I think the problem is:

1. Many bonuses will be contractual, and if not paid, RBS will get sued and lose

2. For the traders, many need to be kept and incentivised to avoid/reduce losses, otherwise they may walk out and the losses will be even more horrendous. You can't just 'shut down' trading desks without taking massive further losses - they need to be carefully managed down.

3. Some parts of RBS are probably profitable. And the key employees there will walk to somewhere else if they aren't paid decently. Since a bank is about its staff, and the govt is the key investor in the bank, it is in the govts and ours interest that that value of the bank doesn;t collapse.

Hence some level of bonuses is correct and rational for the taxpayer, tough as that may be to understand.

[Injin]

I think the problem is:

1. Many bonuses will be contractual, and if not paid, RBS will get sued and lose

2. For the traders, many need to be kept and incentivised to avoid/reduce losses, otherwise they may walk out and the losses will be even more horrendous. You can't just 'shut down' trading desks without taking massive further losses - they need to be carefully managed down.

3. Some parts of RBS are probably profitable. And the key employees there will walk to somewhere else if they aren't paid decently. Since a bank is about its staff, and the govt is the key investor in the bank, it is in the govts and ours interest that that value of the bank doesn;t collapse.

Hence some level of bonuses is correct and rational for the taxpayer, tough as that may be to understand.

All of which assumes that RBS shouldn't just be wound down like any other failed business.

[mattyboy1973]

I think the problem is:

1. Many bonuses will be contractual, and if not paid, RBS will get sued and lose

2. For the traders, many need to be kept and incentivised to avoid/reduce losses, otherwise they may walk out and the losses will be even more horrendous. You can't just 'shut down' trading desks without taking massive further losses - they need to be carefully managed down.

3. Some parts of RBS are probably profitable. And the key employees there will walk to somewhere else if they aren't paid decently. Since a bank is about its staff, and the govt is the key investor in the bank, it is in the govts and ours interest that that value of the bank doesn;t collapse.

Hence some level of bonuses is correct and rational for the taxpayer, tough as that may be to understand.

No - this is bullsh!t. The value of the bank has already collapsed in case you hadn't noticed. If the business had been allowed to fail no one would have got a bean. The bank has no right to retain these alleged superstars - the business failed, tough. And do remember that two years ago the superstars were most likely selling MBS's - last years 'stars' generated no wealth either, just got lucky sucking at the teat.

[Giordano Bruno]

Oh no, we understand the numbers all right. We just can't get to grips with the logic or morality of paying bonuses for negative performance.

It's because they are bankers! This government is the bankers' bitch. Simple really.

[Umiapik]

I left a cross comment on the Time's website - bet they don't publish it!

They seem to have had something against me ever since I left an extremely rude reply to one of Anatole Kaletsky's columns a few months back...

[richc]

I think the problem is:

1. Many bonuses will be contractual, and if not paid, RBS will get sued and lose

2. For the traders, many need to be kept and incentivised to avoid/reduce losses, otherwise they may walk out and the losses will be even more horrendous. You can't just 'shut down' trading desks without taking massive further losses - they need to be carefully managed down.

3. Some parts of RBS are probably profitable. And the key employees there will walk to somewhere else if they aren't paid decently. Since a bank is about its staff, and the govt is the key investor in the bank, it is in the govts and ours interest that that value of the bank doesn;t collapse.

Hence some level of bonuses is correct and rational for the taxpayer, tough as that may be to understand.

Regarding this whole line of thought, have you learned nothing over the past two years? The whole bonus culture is nothing but a scam. It does not work. How much more evidence do you need before the brainwashing from the City is overcome? When adjusted for risk, most of the "returns" booked by these traders are nothing but run of the mill market returns. They're being paid enormous sums for doing nothing that couldn't be achieved by simply investing in an index fund.

And where are these traders going to walk to? No bank is hiring and hedge funds are shutting down left and right because the banks are no longer subsidizing them through cheap leverage.

Finally, RBS needs to downsize anyways. Their aspirations to be global bank are a joke. These bonuses are going to be paid to people who are going to be fired in six months time, at which point they'll be asking for severance payments.

[Guest KingCharles1st]

Surely the banks have just been operating with an eye on efficiency and profitability. Wasn't it the IFA/fsa whatever that "should" have changed any applicable guidelines for them to work within?

Now- lets trace this back a little bit further- WHO IS RESPONSIBLE.....?

[daedalus]

Let m eexplain again, thic kos.

You and I, the taxpayer, now pretty much own RBS.

And, like it or not, our beloved leader has pretty much guaranteed all of RBS's liabilities

.

[i personally believe this was a mistake, and bad banks should be allowed to fail, as per Lehman, but that is another dicussion]

Sio it is in our interest for RBS to LOSE as little as possible.

Ths means:

1. Winding down trading desks in an ORDERLY fashion. You need people, and good poeple, to do this. Where do you think you will find them?

2. Helping those parts of RBS that EARN money, continue to earn as much as possible.

If you just closed down the bank, and put it into run-off, anf had a bunch of bean-counters managing it, the losses wouold be astounding - hundreds od billions of pound. So perhaps it kmight be worth paying a few millions in bonuses to avoid that.

[Wad]

I do not normally join in 'banker bashing' threads but I will this time.

The key issue I thnk we have to remember here is that without Govt support these banks would not survive. Contractual bonus payments would almost certainly not be honoured if a bank were put in liquidation as the bankers would just be unsecured creditors at the back of the very long queue.

In my view the Govt failed utterly in its rescue by not causing the banks to momentarily to go into a 'pre pack' administration and then straight out again into a special purpose vehicle owned by the BoE. That way all creditors would have to take their turn and do as the BoE/Govt sees fit. At the moment all creditors are behaving as if nothing happened.

These banks could be run down with only 20% of their front office trading staff. The back office staff are the ones you really need to keep but they are paidvery little relative to the front office 'stars'.

The Govt needs to get a grip here. Nationalisation, rationalisation and refloating of the good bank elements needs to be done and quick. I am a shareholder in a number of banks and I do think all shareholders in many banks need to be wiped out, employee bonus contracts ripped up and the subordinated debt holders forced to convert it to equity.

Edited February 5, 2009 by Wad

[mattyboy1973]

Let m eexplain again, thic kos.

You and I, the taxpayer, now pretty much own RBS.

And, like it or not, our beloved leader has pretty much guaranteed all of RBS's liabilities

.

[i personally believe this was a mistake, and bad banks should be allowed to fail, as per Lehman, but that is another dicussion]

Sio it is in our interest for RBS to LOSE as little as possible.

Ths means:

1. Winding down trading desks in an ORDERLY fashion. You need people, and good poeple, to do this. Where do you think you will find them?

2. Helping those parts of RBS that EARN money, continue to earn as much as possible.

If you just closed down the bank, and put it into run-off, anf had a bunch of bean-counters managing it, the losses wouold be astounding - hundreds od billions of pound. So perhaps it kmight be worth paying a few millions in bonuses to avoid that.

so its not fraud, its blackmail? Either you are a banker gorged on your own hubris, or you've bought the lie that what these guys do really is rocket science. It's not. Let them do what needs to be done on the decent wage they already get paid, or leave.

[Radge]

Blackfriars bridge just isn't long enough. :angry: :angry: :angry:

Brilliant!

[Methinkshe]

If RBS are being kept afloat by taxpayer money - and they are - then the taxpayer is funding the bonuses.

Thus, Mr and Mrs Pensioner who have lost capital through the irresponsibility, if not downright fraud, of bankers and interest on any remaining capital through the B o E's interest rate cuts and consequently now have to choose whether to eat or heat are, in effect, subsidising the bonuses paid to the very same bankers that brought them to penury. And just to rub salt in the wound, their grandchildren also will be picking up the tab for decades to come.

I can find no justification whatsoever for paying ANY bonuses. Bankers, traders and the like are already paid above average salaries. I would have thought a salary CUT was in order, never mind a bonus. When the pensioners whom the bankers robbed can barely afford to stay alive, it is obscene to reward them with bonuses (at their victims' expense) just to keep them in their Ferraris and multi-million £ properties.

It is a though a thief had been caught red-handed stealing a pensioner's valuables only for the police to refrain from prosecution, allow the thief to keep the stolen goods and then sanction his taking a pick of any remaining valuables.

[Errol]

How can they get a bonus when the bank is effectively insolvent? By all rights they should have been allowed to go down.