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EU plans to limit bankers' bonuses |
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dr_martinov 
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 Topic: EU plans to limit bankers' bonusesPosted: 05 March 2013 at 8:44am |
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Osbourne and Tories oppose the European Parliament plans to limit bankers' bonuses in the EU: "EU plans include limiting bonuses to 100% of a banker's annual salary, or to 200% if shareholders approve. The City of London fears the rules will drive away talent and restrict growth. Mayor of London Boris Johnson has dismissed the idea as "self-defeating". London is the EU's largest financial centre. On Monday, a spokesman for Prime Minister David Cameron said: "We continue to have real concerns on the proposals. We are in discussions with other member states." But Mr Osborne's bargaining power may be weakened further by Switzerland's recent decision to cap bonuses paid to bankers and give shareholders binding powers over executive pay." http://www.bbc.co.uk/news/business-21661089 The poor souls, how will they cope with a bonus of a mere 100% (or 200%, which is almost as insulting) of their annual salaries, which I'm sure are close to minimum wage in the first place? Good on you Osbourne in confronting this blatant attack on the working man who is scraping a living. Bloody Europeans trying to tell us what to do - we should be allowed to be as disgustingly unfair as we like to our people without your influence. There's going to be bankers aplenty begging on the streets of London after this so they can scrape enough change together to buy their espressos, cocaine and hookers, you mark my words. Pretty rich don't you think? In more ways than one. Edited by dr_martinov - 05 March 2013 at 8:47am |
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PearlJam
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Posted: 05 March 2013 at 9:10am |
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As much as the whole banking sector is a huge racket; what I will say is they provide the UK with a huge amount of tax revenue.
Whilst I'd like to suggest that every banker f***ed off the face of the Earth, the reality is if the EU imposed this rule alone, the banks would probably move their operations to the US or Asia to circumvent these rules. That means lost tax revenue for the UK and then further cuts in public sector spending / jobs losses etc. There is a tremendous misbalance in the world economy and in wage structures which values the output of a banker at a disproportionate level from say a doctor or a nurse. But hey, that's economics. Osbourne is a cretin with no credibility as a Chancellor, but I agree with him that you can't do things in isolation in economics - either the entire world does it (which it won't) or you'll probably get a shift away from the UK (the same goes for tax havens - if you have one in existence, then you might as well have a million).
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dr_martinov
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Posted: 05 March 2013 at 9:33am |
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Thanks Pearly, you have explained the position of the Tories and Osbourne very eloquently, far better than the BBC or Tories themselves did in that article, as I admit I had been struggling to understand how they could justify being against such measures.
So the gist of the issue is, if we keep the banking bonus system as moderately dodgy serving money-obsessed arseholes driven by greed but, importantly, keep it here, then we can at least profit from it, no pun intended. I take the points re them simply moving to Asia, America, or wherever doesn't have the same constrictive laws (whatever the law - there will always be some who do this) but I really think we should be able to back relatively sensible sounding measures to prevent bloody financial meltdown shouldn't we? And there would be enough who would stay to make things work in Europe, as they can't all be driven by getting the largest salary and/or bonus can they?
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PearlJam
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Posted: 05 March 2013 at 10:06am |
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The thing with banking is it does create wealth: it recycles capital and pushes it to it's most productive use. It's a big economy booster: the stronger the banking sector, the stronger the economy. Or, it used to be that way. What happened somewhere (the 80s) was that people convinced Government's that regulation restricted the levels of wealth could be generated (and shared with states). The safety nets (regulation) were there to ensure that no losses could affect depositors, businesses or countries and to control excessive, reckless lending. This was when banks had a social purpose. When the shackles came off they could do what they want and I think they realized, long ago, that if they failed the host states would bail them out as they were such an integrated part of economies. Unlike previously where they could have crashed with minimal collateral. How anyone can get banking back into the safe zone is beyond me. I don't think it can be as its such a powerful lobby. They control so much wealth and have so much influence on politics, not just in the UK, but within the EU and within the US it would seem impossible to regress back to how it was in the 70s. To be honest, in terms of "growth" - places like Vietnam, Cambodia, China and Africa are growing faster than the EU so I can imagine in 10, 20 years time business will relocate there as infrastructure, regulation and governance / judiciary improves. The EU isn't a 'growth' market any more (probably reaching the limits now - look at the unemployment, cost of living, quality of life), but merely a safe zone to do business from. It's going to take someone bold to change things - and change only seems to come after HUGE shocks - take Greece and Italy. What they've done at the ballot boxes is really a modern, Western, revolution. But then they get crippled by economics; the cost of borrowing goes up, they can't pay their bills and the public sector suffers. What a system that we've created. If you're at the top, you're fine. If you're at the bottom, you get screwed by the markets. Unless you're a shark, you're prey. Got any radical ideas, Doc? Edited by PearlJam - 05 March 2013 at 10:08am |
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dr_martinov
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Posted: 05 March 2013 at 10:24am |
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Go back to making money from hemp and then we can smoke the profits?
Plus this would have the added 'bonus' (sorry
 ) that the more money someone makes, the less inclined they will be to make any more or, in fact, do anything apart from slouching on their sofas and eating munchies. |
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omri jones
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Posted: 05 March 2013 at 11:29am |
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Bankers don't create wealth. All they do is shuffle it around to the benefit of the very top capitalists, who have become much richer since the Reagan/Thatcher "liberalisations" that removed most of the restrictions that protected the rest of us. Not only have they been involved in reckless gambling in the quest for personal bonuses, but the have broken laws and the rest of us have had to pay by bailing them out or even worse having their homes repossesed. As usual it's socialism for the rich and capitalism for the rest.
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PearlJam
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Posted: 05 March 2013 at 1:31pm |
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Privatized profits, socialized losses and all that...
But lending does create wealth as the returns on the loans are sent out to seek further returns - like a lovely pyramid scheme that works while the investments are good. However, yeah, if you remove the safeguards and allow reckless lending on speculative property deals and ignoring economic realities (like "Bubbles" which has been a macroeconomic feature for decades / centuries even) then the outcomes should have been obvious for all to see. But the crooks who let this happen continue to work and because of their entrenched positions as principal wealth creators, continue to prosper. We on the other hand get stuffed with falling house prices, un-affordable energy bills and failing cities with outdated infrastructure. It was all coming, but nobody wanted to see it. |
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dr_martinov
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Posted: 05 March 2013 at 1:51pm |
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If there are those who are making money then surely there has to be some who are losing?
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9331101972
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Posted: 05 March 2013 at 3:02pm |
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What are you a doctor of?
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dr_martinov
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Posted: 05 March 2013 at 3:15pm |
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Definitely not economics (chemistry actually). I suppose my rhetorical question was in response to the defence of the bankers in terms of "creating wealth", "growing the economy" etc. because, in the bigger picture, someone must be losing out for this to happen yes? But I don't pretend to understand any of it one iota, even though it's obviously pretty important stuff. |
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aber-fan
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Posted: 05 March 2013 at 3:47pm |
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Does it, fu**? Are you saying these comedians don't employ the same accountants/dodges as Starbucks/Amazon/Vodaphone etc etc? If so, I'm very surprised! The argument usually employed is that, if we rein in their bonuses, we'll lose all this TALENT to countries overseas. Yes - the same TALENT that has obliged us taxpayers to stump up BILLIONS of pounds every year for several years to stop their crappy banks going down the tubes. despite this, they expect BONUSES FFS! The sooner these c***s move offshore, the better as far as I'm concerned. (BTW - there is strong evidence that societies in which wealth is spread proportionately, as opposed to being in very few hands, are healthier and more productive. Why should we encourage inequality by retaining these clowns?) |
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“You cannot reason a man out of what he never reasoned himself into.” (Jonathan Swift)
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omri jones
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Posted: 05 March 2013 at 4:48pm |
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Was it on Any Questions? on friday that an appologist for these bankers (whose patriotism goes no further than to threaten to go abroad if they don't get any more huge and undeserved bonuses) suggested that there were some really nice countries they could go to like Switzerland who are outside the EU and where the ruling wouldn't apply. Well over the weekend the Swiss had a referendum in which they voted by a large majority to cap banker's bonuses.
Ah well there's always the USA, but they might already have their quota of greedy barstiward bankers so let's see how our incredibly gifted bankers cope with real competition.
My main worry is that they come back and become a burden on our welfare state.
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9331101972
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Posted: 05 March 2013 at 6:09pm |
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You have certainly asked an important question, which I recognize science is all about. In summary, if a banker lends money to a chap who makes a component for a car, the banker's profit is more or less the interest he charges on the loan. The component maker makes his profit when he sells his goods to the car manufacturer. He then sells the car to you for your personal use and he makes money on the deal. You derive pleasure and utility from using the car. The value of that pleasure and utility only you can judge! It may be more than you paid for the car, in which case you have gained (a good buy), or it may be less, in which case you have lost out (a bad buy). During this entire process people are employed and they pay taxes which sustain public services and they contribute to their pension funds. That is how the world should work. At the moment there is a serious lack of confidence in the economy generally and businesses are not borrowing the huge amounts of money that are available. If a bank is wholly owned by shareholders in the private sector then the bonuses that are paid are a matter for them and no one else, although tax is payable at 45%. If however a bank is partly owned by us, the taxpayer, because the government bailed them out four years ago then any bonuses paid are very much a matter for us. This is the point at which we may be entitled to shout foul. I know nothing about chemistry!!
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dr_martinov
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Posted: 05 March 2013 at 6:41pm |
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Cheers Numbers.
I do struggle to see justification over this "bonus" culture - when one is talking about such large bonuses, anyway. I can see it is a job needing doing (not quite sure we need so many but that's another debate) and we all want our money to be safe, both on the personal and national/international level, but it does come across as a very greed-driven and selfish industry at times. Hence the general public will have little sympathy for them and why I posted my initial criticism of Osbourne. But I accept it's more complicated than I really understand. |
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PearlJam
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Posted: 05 March 2013 at 7:32pm |
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There are taxes like NI and income tax that you can't avoid. You're thinking of corporate tax avoidance which is a global issue. Moving these guys off shore won't help anyone; especially not in terms of regulating them and taxing them. Off shore means they keep everything and you get a wild west. In terms of who loses when people profit, in good times, no-one is supposed to lose. The money supply increases and GDP outstrips inflation (amongst other things) so as more goods (stuff) are created, more wealth is generated and more is consumed. Taxes filter down and everyone gets richer. The thing here is that "stuff" is made from resources which increase in value when "made". I.e. wood into deck-chairs, gold into rings, leather into coats and shit like that. But that only goes so far until things fall apart. |
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If you're losing your soul and you know it, then you've still got a soul left to lose.
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dr_martinov
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Posted: 05 March 2013 at 8:51pm |
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I don't like it but I took that slime mp's point on Channel 4 News tonight that this is also an issue of government involvement (and in this case European at that) - whilst I still find the very idea of a 200% bonus nauseating, should government really be the ones deciding things like this? What next, them capping the equally absurd values of football players' salaries?
The above is mainly just for argument's sake and, for what it's worth, there are many over-paid jobs in this world Imo - bankers are an easy target at the moment (and for good reason!  )
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