Friday, October 8, 2010

The banking system is collapsing

European bonus rules 'will prompt exodus of banks'

Under the proposals, bankers would only receive 20% of their bonuses in cash with the remainder paid in shares or some other financial instrument and deferred for between three and five years. Jon Terry, reward partner at PricewaterhouseCoopers, said the CEBS proposals would give Europe "among the most stringent" pay rules in the world and would force banks to quit the City and other financial centres.

Posted by devo @ 09:42 PM (1276 views)
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9 thoughts on “The banking system is collapsing

  • lovely comment made at guardian to this: Nice little city you got here – be a shame if anything happened to it.

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  • “the CEBS proposals would give Europe “among the most stringent” pay rules in the world and would force banks to quit the City and other financial centres.”

    Good, now p*ss off!

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  • Bye then – thanks for all your … losses. You’ll be welcome again when the taxpayer’s finished paying off the losses perhaps. That’s in about 45 years.

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  • where will they go? isn’t the benefit of london three-fold:
    1. Time zone.
    2. English speaking.
    3. More fun than Kuala Lumpar.

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  • Idle threats from the greedy. Where will they go?
    Not the US. Their spouses and kids couldn’t work with their visas and the US hardly needs another 100,000 bankers.
    The Middle East? Fine, let them go there. Dangerous place for westerners with lots of cash 🙂 Again, wives and kids will be pining for home after 6months. And the banking “culture” might not fit in with that of Islamic countries. ie. no snogging the secretary at Xmas parties.
    Far East. OK, go !
    Oz? Yer having a laff !!!

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  • I have no problem with people making money legitimately, through making stuff and enabling stuff, but I have every problem with configuring our country primarily to please the greedy and the disloyal. What about the other tens of millions of others living here? If we set ourselves up to please the bankers, the entire tone of the country and living here is set in that vein and experienced by all. We set ourselves up for ransom.

    At some point the Brits need to wake up and realise that we don’t have to be obsessed by money and power and status to live as well as the Scandinavians. Forever obsessed with our position in world economic rankings and self-appointed role as world policemen, we should stop to consider whether it’s really worthwhile, when our quality of life ranking is so poor. There are actually advantages to not being in a top spot, because you’re less of a target and you can just get on and enjoy life. This is, of course, not a call for us to drop to the bottom. It’s just a fact that straining to be at the top has consequences. Ask anyone who’s got to a top spot – getting there makes the rest of your life suffer.

    Moreover, bankers make money out of other’s people’s money. They don’t directly create wealth itself; they just shuffle paper and at best choose which wealth-makers to enable (through financing them). Admittedly they bring overseas money to the UK, but all this does is build a gilded class and make everyone else dependent. That’s a recipe for blackmail if there ever was one. Pin-striped Scargills indeed.

    And yet as soon as the bankers squeaked, our politicians rushed to bail them out without putting any pre-conditions in place or putting an end to grossly engorged pay. Perhaps they naively believed that bankers would stop their antics, having been so scolded by the crisis. Ha, what naivety. A banker’s year starts on 1 Jan and the last year is forgotten in an instant. The crisis stole last year’s bonus, so here goes, new year, new P&L, new shot at a big cheque.

    No tears from me for the international bankers if, like locusts, they flock elsewhere and ruin wherever they land.

    Meanwhile, no matter how many of them leave the country, this will not change the ability domestic commercial banks to make loans and thus enable wealth creation at home. So maybe we should welcome an exodus of speculative bankers, because what’s left behind of the banking industry will find itself in a panic about how to make money out of conventional activities, thereby increasing domestic loan volumes.

    Frankly I’d rather that we didn’t pay interest to the banks and instead paid it to a mutual or a cooperative, or even the government so that wealth-creators can reduce the tax burden for the rest of us.

    Think about this: the Glass-Steagall act lasted from 1933 to 1999. It protected the world from bankers’ excesses for 66 years. The dotcom bubble was just a first symptom of loosening the leash, but it was barely a warm-up for the real crisis, which started in 2007. After 66 years on the leash, it took the bankers JUST EIGHT YEARS to bring the entire world to its knees – and then demand to be bailed out, to fix the mess that they caused and then award themselves enormous bonuses for so doing while millions lost their jobs and the social infrastructure of the nation faces the biggest cuts since WW2.

    Saturday morning slightly fuzzy-headed rant over. There’s probably some holes in my thinking, so bring on the debate.

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  • The great social advances of the past happened when enough people stood together, shoulder to shoulder, to make reactionary resistance futile. Think NHS, The Wall coming down etc – trouble is we all think we’re too clever and fly to get involved now. Gold bugs, day traders, home-ownerists, the self righteous ‘savers’ who are so ‘special’ that their returns must be sacrosanct when all around them burns.
    We’re being royally screwed by bankers, ‘too big to fail’ (I’d say too big to go to jail)…..and still we stoically bend over to receive just a few more grunting cm’s . I love the bluerinse brigadeistas cry that it was ‘Liebour what done it’….as if Dave’s masters would have been kinder to Millbank, if the Blues had been in power (you know, with them absolutely just loving the ‘Red Tape’ that stops wealth creators from getting the job done for thirty bob an hour, or creating ingenious financial instruments). It’ll dawn on many in the coming years that they’re not sitting at the top table, I don’t know whether I will laugh or cry.

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  • We now give the Banks our tax revenue (& more) for free via ‘special liquidity schemes’ so that they can lend multiples of that free money back to us at a premium & buy the Government debt that is necessary to sustain the free cash window, keep IR’s artificially low, and ensure that the Banks collateral (our homes) remain out of our collective reach without the necessity to borrow crippling debt from the Banks.

    The Banks have become more powerful that our elected Government, and our elected Government has no will to change this.

    Even with our entire Society engineered in order to ensure this outrageously unjust system survives this latest catastrophe it has wrought upon itself, and even given the right of Banks to create money out of thin air via the mechanisms of the fractional reserve banking system, they are still unable to in any way to provide the funding required for our economy while always managing to pay themselves salaries that should make even a monarch blush.

    There is no legitimate case to justify their lofty position at the top of the tree & they no longer serve any meaningful social function. They should have been allowed to go bust when they were bust and the tax payer funding been used to create a system from the ashes that actually served the society it leaches off.

    Worried they might leave? As long has they hand back all of our money (and their passports) beforehand, and as long as a new system of National finance is put in place ( rather than an attempt to replicate what we will have rid ourselves of) then I think we should provide the planes for them to leave (and let them sweat until out of missile range)

    However, unfortunately, given that nobody seems to have any intention of actually fixing the rot, or has any power to do so should they wish to, or even has any idea what we might actually replace the the rotten system with, we will just have to suck on it won’t we.

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  • greenshootsandleaves says:

    Even now these proposals (to curb some of the City excesses) aren’t exactly going down a treat, are they? I wonder how they would have been greeted ahead of the crisis, i.e. before the bonus culture was so widely discredited (a point which, incidentally, the ‘It’s all Gordon’s/Darling’s/X’s fault’ brigade should perhaps bear in mind).

    Mr g, the entire greenshoots household and many, many others may be willing to call the bankers’ bluff and invite them to move to a better location (if they can find one), but I don’t think Boris Johnson (for one) is prepared to upset them in any way.

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