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Barclays Defies Curbs On City Bonus Culture

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http://business.timesonline.co.uk/tol/busi...icle6738038.ece

Barclays is defying new curbs on City bonuses, it emerged yesterday, as it and HSBC revealed a return to bumper profits.

Three investment bankers at Barclays have been guaranteed two years’ worth of bonuses, despite rules recommending that such deals be banned. Barclays Capital, its investment arm, has also hired about 200 financiers, guaranteeing their bonuses for a year.

The details emerged as Barclays reported £2.99 billion in profits for the first half of 2009, boosted by the stellar performance of Barclays Capital. HSBC reported profits of £2.95 billion.

The news helped to push shares on London’s stock exchange up almost 2 per cent to a ten-month high. Sterling also rose to its highest level against the dollar since the autumn.

But the bonuses sparked criticism that the City had returned to its old ways less than a year after the Government spent £130 billion stabilising the banks. Barclays benefited from billions of pounds in taxpayer support.

The Financial Services Authority has made clear that bankers who are guaranteed bonuses for more than a year regardless of a bank’s performance could be encouraged to invest irresponsibly. It declined to comment on Barclays but could force a lender to hold more capital in reserve, which would hit profits

While Barclays will not reveal the size of its bonus payments until the end of the financial year, it admitted that overall staffing costs had risen by a third to £4.8 billion.

John McFall, the chairman of the Commons Treasury Select Committee, told The Times that there were fears that bankers were “making hay while the public paysâ€. In October last year, the Government underwrote a Barclays £22 billion bond issue. The bank also holds about £17 billion of bonds guaranteed against default by the Government and benefited from access to billions of pounds of liquidity schemes funded by the taxpayer.

John Varley, the chief executive of Barclays, said that it was important to distinguish between banks in which the Government had taken a financial stake and others, such as Barclays, that received help available to all of the banking system. “I think there is a very clear expectation from customers and shareholders that we employ the best people we can,†he said.

Britain’s part-nationalised banks, Lloyds Banking Group and RBS, will report their first-half results tomorrow and Friday respectively. Both are forecast to show underlying losses.

Mental illness, has to be.

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Where did all the billions in profit come from and what do they do with the money?.

That report is just for the first half of 2009 what happened to all the billons made over the last 10 years. Where is it all and whats in it for us?

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Guest UK Debt Slave

Beggars belief doesn't it? Absolutely fekkn shocking

Nevermind eh! Back to Eastenders, Amy Winehouse's latest drunken escapade, Lindsay Lohan, Britney, Eastenders, and I want another pair of slave made training shoes with lights in them. Life goes on. The people slumber on meaningless consumerism while the bankers ram a Union jack wrapped around a flagpole out our collective jacksies. Makes me wanna puke, truly

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Guest UK Debt Slave
Where did all the billions in profit come from and what do they do with the money?.

That report is just for the first half of 2009 what happened to all the billons made over the last 10 years. Where is it all and whats in it for us?

Instead of paying interest on your savings, the bankers stole it. Not satisfied with that, they raided your pensions and investments with the full connaivance and approval of our government.

Simple really....because nearly everyone in the UK and America is too fekkn dumb to realize they are being ar$e raped by a bunch of gangsters dressed in Saville Row suits who masquerade as bankers and politicians.

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Guest BoomBoomCrash

What will it take for people to get sufficiently angry to get off the couch?

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Guest UK Debt Slave
What will it take for people to get sufficiently angry to get off the couch?

Starvation? That usually works. They'll take good care to see that doesn't happen......for the time being anyway

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What's the problem?

So long as

- any profits dependent on state support (eg the various boe liquidity programs) are clawed back for the taxpayer

- the books are subject to forensic scrutiny

- any fraudsters revealed by this jailed

they can do what they like.

Edited by mdman

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im sure a lot of this "profit" is down to stock market rises.

now, what happens to the bonuses if the "profits" disappear if the stock market falls again.

will they be repaid? or will Barclays be reporting a huge loss and demand the BoE buys a ton of its impaired assets?

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Guest Parry aka GOD
What will it take for people to get sufficiently angry to get off the couch?

Lifting gear, hoists, tackles, winches, cranes that sort of thing.

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Barclays managed to play chicken with the market and win, they never reduced leverage, and therefore as risk appetite has returned to the world, they have made bucket loads of money. More power to them, we will never know quite how close to disaster they came.

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Bear in mind that Barclays didn't need a bail out, but they did benefit from the taxpayers stabilizing the banking system.

Instead Barclays went scuttling off to the Middle East to borrow money at sub prime rates.

What scams are they cooking up in Barcap to generate these profits/bonuses, bearing in mind M&A, MBS etc are effectively dead?

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aside from the ethics of the bonuses, the Barclays empire is almost the antithesis of Glass Steagall, since they subsumed Lehman... similar to BofA / Merrill and other shotgun marriages

all this talk about regulation, all this 'never again' bull5hit. meaningless

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What's the problem?

So long as

- any profits dependent on state support (eg the various boe liquidity programs) are clawed back for the taxpayer

- the books are subject to forensic scrutiny

- any fraudsters revealed by this jailed

they can do what they like.

The problem for me is as follows:

1. They only make profits because they are in an oligopolistic market created by the regulatory regime i.e. the profits are nothing to do with entrepreneurial skill just expoitation of an artifical state controlled market, therefore we have a right to regulate their excesses.

2. We have no idea that these profits will not turn to dust again.

3. If things go wrong then they will come to the tax payer for a handout because "we are a bank and can not fail however incompetent we are" i.e they are not taking any risk but are still extracting huge bonuses .

Unfortuneatly the points you make will never happen

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hope these banksters get good security.

when the £5 a loaf and 60/70% tax and 5 mill unemployed hits they will be getting mass lynchings from the public/burnt homes usually saved for the local outed peodophile

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Instead of paying interest on your savings, the bankers stole it. Not satisfied with that, they raided your pensions and investments with the full connaivance and approval of our government.

Simple really....because nearly everyone in the UK and America is too fekkn dumb to realize they are being ar$e raped by a bunch of gangsters dressed in Saville Row suits who masquerade as bankers and politicians.

Whilst your own outrage and that of others is understandable..... whay are the options from a consumer perspective... there are other societyies out there who deliver financial products at no profit... but actually they seem to be even worse value.... equally Barclays will (quite legitimately) argue that if they didn't have pay the bonuses they wouldn't have a business, the jobs might very well leave the Uk and with it the benefits of having those jobs ( which in a post industrial britain like it or not is very important)... so yes angst understandable but you can't put your money elswhere or access not for profit financial products without paying through the nose and you can't wish barclays dead etc without also voting for much higher taxes etc etc.

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Whilst your own outrage and that of others is understandable..... whay are the options from a consumer perspective... there are other societyies out there who deliver financial products at no profit... but actually they seem to be even worse value.... equally Barclays will (quite legitimately) argue that if they didn't have pay the bonuses they wouldn't have a business, the jobs might very well leave the Uk and with it the benefits of having those jobs ( which in a post industrial britain like it or not is very important)... so yes angst understandable but you can't put your money elswhere or access not for profit financial products without paying through the nose and you can't wish barclays dead etc without also voting for much higher taxes etc etc.

This is all well and good so long as they aren't engaged in mass fraud and deception enabled by bribed/ malfeasant regulators and politicians.

But what are their assets really worth? The Market Ticker has an interesting rant at the FDIC and Sheila Bair - as part of this, Denninger claims that banks are marking bad assets at 100c on the dollar, and either not foreclosing (allowing delinquent mortgagors to live rent-free), or buying up the house at auction themselves (ie off themselves) to prevent any loss from being realised. And when the loss IS realised - when the bank is seized by the FDIC - what has been claimed to be a non-toxic asset ends up with a realisable value of 40c on the dollar or less.

If Barclays is engaged in these games, particularly with the leverage in their business, their senior executives should form an orderly queue behind the crooks and fraudsters at JPM/ GS for the guillotine. This sort of illusory profit based on fraud inflicts economic harm on the rest of us. If guilty, they must be punished.

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I may well be a complete idiot, but don't the banks have to pay the government back their bailout money when they turn a profit?

They don't just get to keep it do they?

TFH

They keep the profits yep. They only have to pay back the borrowed money.

It's like you borrowing £1bn of the taxpayer. Making £3bn in profits. Then giving the £1bn back (plus change for the privelege).

Except in Barclays case, they fought tooth and nail to not be forced into taking our money and took it off Arabs instead for the most part. So they can do what they like, although they still supposedly signed up to the new code on bonuses.

The problem is, again, that if they fail in say 3 or 5 years, they have already taken and spent their bonus money but will expect to be bailed out. The govt. will always give an implicit guarantee because they are too scared to see depositors cash go up in smoke if a bank fails. So Barclays just stick two fingers up, spend their bonuses and increase their market share. Same old.

Regulator (FSA), as we have seen, is owned by the banksters. Lord Turner's FSA owes HSBC and Lloyds £200m.

The mafia wouldn't be able to pull a scam like this one.

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