Banks given go-ahead to pay unlimited bonuses

[Magda Hassan]

Ministers cave in to City and reject calls to tackle highest earners as No 10 seeks face-saving deal

• Patrick Wintour, Jill Treanor and Allegra Stratton
  
• guardian.co.uk, Monday 10 January 2011 22.03 GMT Ed Miliband said the latest government moves were, in effect, a tax cut for bankers. Photograph: Dominic Lipinski/PA Britain's banks were given the go-ahead tonight to pay unlimited bonuses, drawing to a close a two-year political battle to rein in the City.
  After months in which a series of government ministers of all parties have threatened a toughening in the stance over City bonuses, Downing Street said the government did not intend to intervene in the pay of the UK's top bankers.
  Ministers are instead hoping for a face-saving deal in which the banks agree to lending targets and improve the way they disclose their pay deals. One of the options being discussed is releasing information on the five highest paid individuals at each bank.
  "We've made a broad statement which is about the need to see some restraint and some responsibility from the banks, but we are not going to set bonus pools for individual banks," the prime minister's spokesman said.
  Labour accused the government of capitulation and letting the bankers off the hook, urging the government to extend the bonus tax, which raised £3.5bn after it was introduced by Alistair Darling as a one-off measure in December 2009.
  The coalition government replaced that bonus tax with an annual levy on balance sheets which is estimated to yield about £2.5bn a year. Ed Miliband, the Labour leader, said this was, in effect, a tax cut for bankers.
  Ministers rejected Labour's proposal, preferring to work a compromise deal that would placate Vince Cable, the Liberal Democrat business secretary who has been pressing for tougher measures.
  The government said an extension of the bonus tax would be self-defeating because bankers would become more skilled at avoiding the tax.
  The levy, the Conservatives said, would raise more money in the medium term.
  City sources were reassured tonight by the government's milder stance ahead of the appearance of Bob Diamond, Barclays' new chief executive, before a potentially hostile Treasury select committee tomorrow. The government's stance will be seen as a retreat from some of the aggressive rhetoric from the Liberal Democrats, but the government believes a hard-headed approach requires the government to focus on disclosure and measures that will improve lending, seen as the single most effective way of helping the British economy recover for recession.
  Government sources said even if the government managed to get the size of bonus pools reduced by half from the expected total £7bn projected this year, there would be political flak, and it is better to focus government leverage on increasing net lending to business.
  Government officials also pointed out the Financial Services Authority has already adopted European Union rules curbing bonuses. Measures include the mandatory deferral of parts of a bonus, retention of portions paid in shares and strict conditions on guaranteed bonuses. The overall aim, the government said, was to curb risky banking practices in the pursuit of higher bonuses.
  Nevertheless, Nick Clegg, the deputy prime minister, again urged the bankers to be sensitive. "I totally accept that the kind of sky-high numbers that are bandied about in the City of London seem to come from a parallel universe to many people who are struggling to deal with increased costs and so on.
  "But I think the key issue of principle is this: those people who are running the state-owned banks, who have benefited from immense generosity from British taxpayers, they have to be sensitive to what British taxpayers want."
  The chancellor, George Osborne, will continue to seek an EU-wide deal on disclosure of pay bands above £1m, along the lines proposed by the City grandee Sir David Walker. He had initially proposed a UK-only deal before arguing international competition in banking required an EU-wide deal. It is possible Cable will get a more limited UK deal in the next fortnight, but there are concerns in parts of government that full-pay disclosure requirements will lead to inflationary pay pressures in banking as bankers realise how much their colleagues are being paid.
  The banks may be forced to agree to publish deals of their highest five paid staff without identifying them only HSBC does this at the moment, under the Hong Kong listing rules. Even so, this does not go as far as the proposals outlined by Walker, which Labour was planning to implement.
  Arguing his bonus tax would raise more than the bank levy Miliband said today: "It cannot be right that, when workers face below-inflation pay increases, if they get any rise at all, and families see prices on the high street rising, senior bankers keep raking in bonuses that are more in one year than most people can earn in a lifetime."
  He urged ministers to "take action", adding: "They should not get the scale of bonuses that is being talked about."
  Miliband also came under pressure to say the Labour government had allowed public spending to get out of control, contributing to the country's record peace-time deficit. The Labour leader is expected to argue in coming weeks that the Labour government had been wrong not to state earlier in public that the banking crash required spending cuts to adjust to sudden and permanent loss in tax receipts. A Comres poll today showed Labour had opened up an an eight point lead over the Conservatives with Labour on 42 and the Conservatives on 34.
  http://www.guardian.co.uk/politics/2011/...-ministers
  
  
  

[David Guyatt]

Bob Diamond, President and Deputy Group Chief Executive of Barclays bank Plc is currently giving evidence before the Treasury Select Committee hearing about competition.

Asked if he was grateful to British taxpayers for the banking bailout, repeatedly declined to answer that question, repeatedly saying instead that he was grateful to the worlds central banks.

Shades of Quigley Carroll's "Tragedy & Hope" anyone?

PS, the Britsh taxpayer provides the sustenance to ensure that banks too big too fail, do not fail - even if and when their casino operations are poorly - or even disastrously - managed and are structured to just benefit bankers bonus pools - at the cost of the taxpayer. Despite the recent bankers bail out, the thing that is becoming ever clearer is that bankers simply don't give a toss what the British (or any other sovereign) taxpayer has to suffer to ensure they continue to get their bonuses.

[David Guyatt]

I think what this proves - beyond a shadow of doubt, in fact - is who really rules us.

Everyone, bankers, politicians and even window-cleaners are aware of the immense dislike - bordering on hate - that is reserved for bankers by the public in these times.

But all that is tossed aside to cater to the greed needs of the City.

The word "disgrace" doesn't do this justice.

It's an immense travesty of public disrespect by Cameron, Clegg and the others who are supposed to act as stewards of us citizens.

[Magda Hassan]

Mark Steel: We owe it to bankers to feel their pain


Wednesday, 12 January 2011
At last someone has dared to defend the oppressed people of the banking community. Bob Diamond, chief executive of Barclays, who himself has to suffer the trauma of an £8m bonus, said yesterday that the bankers' "period of remorse and apology should be over". And you feel his pain, because the first words to cross your mind when you see a banker are "remorseful and apologetic". Then you're left worrying, "Oh, how I wish the poor souls were slightly less burdened with remorse about their bonus, and didn't apologise with such agonising sincerity about putting it into their wife's name in a series of untraceable accounts based in uninhabitable islands off Ecuador."
But at last they've learnt to stand up for themselves, and Bob Diamond has emerged as their Martin Luther King. Soon the whole banking community will declare: "Say it out loud, I'm 27 million quid in the black and I'm proud."
Eventually some of them will feel able to come forward with stories of their plight, of how they were ashamed to tell even their parents they were a hedge fund manager, and at weekends they would lie to their friends by saying they were putting up shelves when in fact they were flying to the Indian Ocean to buy one of the Maldive Islands.
Already Bankers' Rights activist Lord Jones of HSBC has protested that bankers who received smaller bonuses last year received "not one jot of praise". Isn't that always the way? It was the same with Ronnie Biggs. Everyone goes on about the year he robbed a train but no one gives him credit for all the years he DIDN'T rob any trains. So is it any wonder the bankers have reverted and taken £7bn in bonuses this year? Because last year they received the much more frugal sum of £7bn, which may look the same but that doesn't take into account the higher remorse rate and the punitively high apology index.
In this paper David Buik, a market analyst with BGC Partners, showed his analytical skills with a detailed economic response to the bonuses: "Life is not fair... Folks, get over it! Let's move on!" This is why we have to pay seemingly vast sums to people in the City, because you wouldn't get that level of fiscal genius from any idiot down the pub.
So at last the bankers may win the human rights they deserve, as even the Prime Minister seems likely to back down. According to a Daily Telegraph headline yesterday, "Cameron admits defeat over bonuses for bankers". This shows how flexible Cameron can be, because he fought so hard to reduce those bonuses, asking the bankers as many as one time if they wouldn't mind reducing them although it didn't really matter, but when the bankers resisted through the wily tactic of taking no notice, he showed he was prepared to think again. But Nick Clegg is still as tough as ever, insisting if they want to swipe this much again that "the key issue is to be sensitive".
So now the same attitudes will probably trickle down to the poor. The Government will scrap their plans for cutting housing benefit, and replace it with a voluntary scheme in which they ask claimants whether they fancy receiving less. And instead of student tuition fees there will be a "graduation loan scheme" in which students are asked to loan a sum of their choosing to the Government, unless they'd rather not. Then the head of the CBI will present a series of adverts about benefit fraud, in which he'll say: "This man claimed unemployment benefit for six months while he was driving a truck for his brother's removal firm. But when he didn't claim it one week he received not one jot of praise. Doesn't it make you sick?"
Then a social security analyst will inform us that there are deep social reasons for some people remaining on benefits, which is "Life isn't fair, get over it", and Nick Clegg will insist that when someone's caught claiming £8m in disability benefit while they're training to compete as an Olympic triple jumper, the key issue is they should try and be a bit sensitive.

http://www.independent.co.uk/opinion/com...82016.html

[David Guyatt]

ob Diamond, chief executive of Barclays, who himself has to suffer the trauma of an £8m bonus, said yesterday that the bankers' "period of remorse and apology should be over".

Excuse my french but... what a fookin' cheek Diamond has got.

Two years of pubic hate aimed at bankers for their uncontrolled and relentless greed that has placed us all in debt bondage for probably the next 30 years or more, and he wants to get back to "business as usual".

Well, they can't void their responsibility, and we shouldn't let him even try.

If he succeeds, and we fail in this endeavour, we'll just suffer another revisitation of the same plundering vampires in a decade or so.

[Peter Lemkin]

£8m buys a lot of fish and chips.....!!! Maybe even enough to feed all the hungry on the Planet for a month or six! That guy belongs in the Tower of London's dungeon!!!!