Monday, November 22, 2010

PLEASE try to understand what’s going on

Osborne to water down bank bonus rules

George Osborne is set to water down plans to force disclosure of bank bonus payments above £1m, in a move that will delight the City but sets up a political clash with business secretary Vince Cable and the Liberal Democrats. The chancellor has been lobbied by senior bankers who claim that if Britain introduces more pay transparency unilaterally it could put the City at a disadvantage and lead to some banks shifting activity to New York or other financial centres.

Posted by devo @ 01:08 AM (1768 views)
Please complete the required fields.



26 thoughts on “PLEASE try to understand what’s going on

  • Let them go. They seem to loose money for whatever country they are in, so it would be no loss to the UK anyway.

    A bit like your kids threatening to leave home.

    Reply
    Please complete the required fields.



  • notyethomeless says:

    I’d question whether I know enough about this to judge the economic facts. I certainly know my moral opinion.

    I also suggest Osborne offers a compromise: 5% corporation tax and no bonus tax if banks convert to full liability partnerships. Then bonus bankers are liable, jointly, for the bank’s debts. Watch risk melt away…

    Reply
    Please complete the required fields.



  • Heads they win, tails they win.

    I am beginning to wonder who is actually running this contry? It all sounds like blackmail.

    Reply
    Please complete the required fields.



  • Yes please do try to understand.

    Next time you visit your library or have an appendix removed, do try to remember the tax contribution of the banks that are domiciled in this country. Do also try to remember that most of them did not need a bailout and that they have been contributing vast amounts of tax to the UK, for hundreds of years. If we play our cards right they might continue to pay UK tax for another 100 or so years. Of course, if we chuck the baby out with the bathwater (because of 3 years problems in 100 years), then we will have to pay for our own books and medical treatment but at least we’ll have taught the banks a lesson they wont forge as they tuck into sushi instead of steak and ale pie. How we’ll laugh when we force them to receive exactly the same amount of bonuses in Yen or Euros

    It’s easy to type the words “good riddance” and it might make you feel good for a few seconds but every other country in the world dreams of welcoming our large profitable banks to their shores. The populations of the countries who welcome these banks will be very grateful to you but you have to realise that they will also think you are very stupid. I know that its hard to stomach the bonuses earned by bankers but when a bank is not state owned and has not received a bailout, then it is not really your business (unless you long for a communist state, in which case I’ will make myself feel better for a few seconds by typing the words “good riddance to you”.

    Reply
    Please complete the required fields.



  • I am beginning to wonder who is actually running this contry? It all sounds like blackmail.

    The bankers are running the entire show (they are too big to fail), the government are a side show, the BoE a fake money factory and the people the patsies.

    Reply
    Please complete the required fields.



  • Flashman, where exactly are these bankers going to go?
    The banks themselves may decide to “up sticks”, but the actual employees/traders? I don’t think so.
    Most couldn’t adapt to the harsher lifestyle offered by the seemingly welcoming states of UAE, Far East, etc.
    And if they are married with kids, 50% or more will end up divorced within 5 yrs as the spouse heads back to Blighty.

    Reply
    Please complete the required fields.



  • Flashman. All banks have been bailed out by the tax payer…without bail outs the whole system would have collapsed….They only make money because of regulatory privilges given to them by the state….There is nothing entrepreneurial about them…A lot of this ,moving is pure bluff as they require capital to enable them to gamble….just look at Iceland when the gambling stopped…

    Reply
    Please complete the required fields.



  • Why do people think it’s such a great idea to let banks leave our shores?

    vinrouge – I think you’ll find that is not true. Even in 2008 financial services was over 4% of GDP for the UK. That’s a pretty damn good rate for the size of workforce – and that’s quite a bit of tax for the old NHS too, and don’t forget the number of other big companies for which a banking presence is attractive! What we must do (globally) is not allow them such a free lunch, that should be achieved by opening the market and freeing up the system by removing the antiquated central bank model (the local monetary monopoly is a problem).
    If you really do feel this is not right, then lobby for a separate state for the city of London, don’t take the risk AND don’t take the tax – but don’t ask to both have your cake and eat it.

    Reply
    Please complete the required fields.



  • Flas – if these bankers facilitated long term sustainable economic growth then I’d agree with you. But don’t expect people to understand your point of view when they have been paid these bonuses for their part in creating bubbles which ruin lives.

    Reply
    Please complete the required fields.



  • general congreve says:

    If you’re not happy with the behaviour of the banks, withdraw your money (or a good part of it) from their evil clutches and put it somewhere they can’t profit from it, just like I have. If more people did it the greedy [email protected] would be totally f4cked.

    Reply
    Please complete the required fields.



  • (tongue firmly in cheek) “long term sustainable economic growth” is only achieved by farming and prostitution.

    Reply
    Please complete the required fields.



  • timmy: The sensible thing to do is to properly regulate the banks, not send them on their way to gleeful foreign lands. It reminds me of the Thatcher government’s tragically myopic response to the loss making car industry. They sold it off for nothing, rather than take the trouble to invest and run it properly. Consequently the Germans own Rolls Royce, Bentley and Mini and the Indians have Jaguar and Land Rover. Just marvellous.

    15 years ago a bank lent me a lot of money to start a business. I fully paid it off a few years back and I employ quite a few people. We have collectively been paying heavy amounts of tax for the last 12 years. You can’t tell me that we are the only story like that and that the banks therefore don’t contribute to growth in any way. I’m also sure that some of our staff contribute a portion of their wages to 51ck’s other sustainable long term growth business, prostitution

    Reply
    Please complete the required fields.



  • Flash I agree – but as soon as anyone mentions regulation they threaten to leave too.

    Reply
    Please complete the required fields.



  • But will the banks all up sticks and leave if they’re subject to closer regulation, including disclosure of bonuses? I don’t think this automatically follows. Banks have abused their economic power for a long time now, leading to the recent near collapse. The level of economic rent they exact is bad for the economy, no matter how much tax they pay, which in any case they are adept at avoiding (Barclays shenanigans over project Valiha, to name one egregious example).

    Reply
    Please complete the required fields.



  • flashman @4. You must be thinking of a different planet. Here on planet Earth bankers do not pay for our books and medical treatment. Also, had it been up to us the taxpayer for whom the governments of the world work for, we would have let the banks fail. We just missed a great opportunity to move forward into a new realm in the 21st century where people are in control of their own countries, not governments or financiers. Instead all countries are now one by one being occupied by a banking cartel who are making themselves richer and more powerful than ever before. You are a fool if you think the banks are there for your benefit.

    Reply
    Please complete the required fields.



  • letthemfall: I suppose I’m an awkward customer but I always balk at statements like: “Banks have abused their economic power for a long time now”. You might be right but I would like to see that statement quantified and qualified.

    The banks would definitely not up sticks if they were subjected to sensible regulation. They were amazed that the regulation was removed in the first place and acted like any other fox when ushered into a hen house. We have now regulated the banks again and as long as we stay vigilant, there should be few further problems. Properly regulated banks are a vital part of our economy and as long as they remain properly regulated, we should encourage them to stay and participate in a way that is beneficial to all of us. It would be great if they could start, once again, providing capital for nascent businesses and technolology. No one else is going to do it.

    Reply
    Please complete the required fields.



  • Next time you visit your library or have an appendix removed, do try to remember the tax contribution of the banks that are domiciled in this country.

    I guess that means that all the [higher] taxes I have paid all my life account for nothing. It’s only the bankers taxes that really count…..actually most bankers I know as so tax efficient, they probably pay far less in tax that the receptionist! Now that is very tax efficient – it’s because they can afford the accountants.

    The sensible thing to do is to properly regulate the banks, not send them on their way to gleeful foreign lands.

    I think the banks are probably the most regulated industry in the World. But in the UK, was the instability not a direct result of Gordon Brown’s incompetent restructuring?
    I seem to remember him describing it as ”light touch, not soft touch”. Moreover, I did actually read somewhere that it was Gordon Brown’s changes in UK banking, that actually led to the changes in the US – as the US government didn’t want to get left behind and see Wall Street come to the UK.

    The banks will go where ever it is better for them to be – they have no loyalty to any country – although, sometimes I think the UK would be far better without their destabilizing influence.

    Reply
    Please complete the required fields.



  • hpw: Yes, the banks make a contribution and the UK needs all the contributions it can get. Did you seriously think that I was suggesting that the banks are the only contributor to the UK tax base? Sometimes I think people are so desperate to find something to argue with that they will shout at shadows (apart from anything, I even mentioned the tax that my own company pays and we are clearly not a bank). 51ck cited the exact banking sector contribution, earlier in this thread (and that was the worst ever year). Yes, I agree that the last government de-regulated the banks to an unacceptable level

    Paul: You need to grow up a bit. Everyone can see that I didn’t say that the “banks are there for my benefit”. I clearly said that a bank once lent me money to start a business. It was a simple statement of fact and the fact that you needed to pretend I said something else, speaks volumes for your inability to make a sensible argument. It is obvious to any sane person that UK banks pay tax and that they therefore contribute to the purchase of our schoolbooks etc (please remember that the banks have been around for hundreds of years preceeding the recent banking crisis). We have to make grown up, long term decisions and that precludes us pandering to the spiteful thoughts of reactionary children

    Reply
    Please complete the required fields.



  • flash said…..”It’s easy to type the words “good riddance” and it might make you feel good for a few seconds but every other country in the world dreams of welcoming our large profitable banks to their shores.”

    Would these be the countries that have been destroyed by these same banks? Think on matey!

    Reply
    Please complete the required fields.



  • Flash, if you were in charge, how would you focus banking efforts on the long term and arguably lower return investment required for the likes of Landrover and others you mentioned, rather than the speculative short term but potentially high return kind of investment that got us into this mess? Bottom line is that investing in “proper” companies might well be in the best interests of the country as a whole, but banks are far more inclined to put their money where the return will be highest, and, often as important, quickest.

    Reply
    Please complete the required fields.



  • timmy: I would tax the banks,at a much higher rate on any activity that is purely speculative and/or for their own book and I would make the capital adequacy regulations a little tighter than required by Basel 111. I would also initiate joint ventures between the banks and the government where certain types of industrial and scientific activity were incentivised by cheaper lending rates. I would also tax the fruit of these strategic projects at a lower rate (including any profits the banks make from these areas of lending/investment).

    Reply
    Please complete the required fields.



  • [email protected] : The Far East, Switzerland, Frankfurt and New York are the favoured destinations and all of these destinations are laying out the red carpet. There is a good life to be had in all of these places. I’ve worked in the financial districts of two of the above and it was a hoot

    The Baldman @7: No they weren’t. For example, the biggest two banks were not bailed out.

    Where do these posts come from (like 6 and 7) that are out of time sequence?

    Reply
    Please complete the required fields.



  • flashman
    Perhaps your phrase about the fox in the hen house supports my blunt statement. Why should banks behave like foxes (go on a “killing” spree) just because they can? That would seem both irresponsible and an abuse of position.

    I don’t know if UK banks were amazed at the deregulation, but AFAIA, US banks lobbied for it.

    I certainly don’t hate the banks (well, only a little), but I do think their behaviour – not just the investment banks’ recklessness with derivatives but the retail banks’ loose lending and flogging of lousy products – deserves all the opprobrium levelled. As you say, banks are a vital part of the economy and they should act accordingly.

    Reply
    Please complete the required fields.



  • It seems to me that overall the banks take way more than they are due, morally speaking. The huge profits that they are able to skim from genuinely productive activity are a result of sypathetic legislation and underhand practices. For a long time they have acted collectively to lobby governments to maintain their monopoly on the monetary aspect of society. A benevolent force for the good of society they are not.

    Unfortunately they, along with those whom sympathise with their ideals, would appear to have the rest of us over a barrel. For various reasons we have become too reliant on this small group.

    So the question is how to bring about an end to the obnoxious aspects of banking without harming ourselves in the process?

    Reply
    Please complete the required fields.



  • letthemfall: There is something about the money business that brings out the worst in people. We have known this for thousands of years. For me to say “it’s just the way it is” is perhaps a little inadequate or even defeatist but nevertheless, it really is just the way it is. History has taught us that bankers have consistently acted like rotters and rogues, so as far as I am concerned, any lapse in regulatory diligence is unforgivable (it goes without saying that we shouldn’t forgive the bankers either). It can also come as no surprise that the banks lobbied for deregulation but I bet they were as surprised as anyone, when they actually got their licence to steal.

    Reply
    Please complete the required fields.



  • Flashman,

    Any thoughts on Glass-Steagall style restructuring? Banking is essential for a modern economy. I’d like to see a return to the days when banking was quietly respectable.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>