No deal yet on bonuses or bank lending

Time to do an Ireland and tell them who is boss.

(Who is by the way?)

"My very strong sense however is that George Osborne at the Treasury is taking a rather less aggressive approach to the negotiations with banks."

Quelle Surprise!

The only protest and objection and action that the banks will respond to is:-

1) legislation
2) customers moving their deposits

The problem is where can bank customers reasonably move their deposits to and make a protest?

Lack of options and competition ... and strong action by politicians ... I never expected the Coalition govt to be as feeble as Zanu-labour on this?

Let the 'talent' defect to other countries. No one will miss them. Trickle down is a discredited economic tool, all the £7bn bonus will stay firmly in the pockets of the masters of the universe.
Charity extends to celebrity auctions and balls where noone has paid for their own tickets and other corporate selfaggrandizing events. How can banks sponsor sporting events when 10% of children in UK are living below the poverty line?
After Vince Cable's terrible foboff of an interview concerning the FSA report on RBS and the failure to publish, just who is running Britain?
My guess is the banks.

I can now understand why the prancing no good immigration goon takes no realistic action on this ... but not George Osborne?

- 5 years to pay off a UK structural deficit
- Another 25-30 years to pay off the Goondog Trillionaire main govt debt

... and massive bonuses still being paid

The real story is not about bankers bonuses nor how much that the banks are lending to small businesses. This is simply the Lib/Dems trying to repair the damage that they have suffered as a result of their hypocrisy over student fees et al.

There can be no doubt that HSBC has firm plans prepared and is ready to move its headquarters abroad. Barclays are more likely to keep their retail operations in the UK and move its profitable commercial and capital markets operations to the USA.

What a shame that the BBC and Lib/Dems conspire to destroy London as a hugely respected financial centre

All this talk about banks lending to small businesses is nonsense. Let's be clear, high street banks have never lent to small businesses, other than highly secured lending or to very profitable businesses. I'm no fan of banks and bankers (believe me), but bank lending works on small margins of just a few % and the metrics don't stack up any other way. This is a smoke screen by the Govt. The real problem is all the ways in which small businesses and entrepreneurs used to raise start up and working capital over the last ten years have been closed e.g. self cert mortgages, leasing, personal loans etc Until the Govt / BoE, CoML are prepared to let entrepreneurs literally lose their houses if they so wish, the problem is not going to be solved. For many of the good things the Govt have done so far, there's not a self made entrepreneur in the cabinet (although plenty of rich xBankers) and their lack of understanding about where and how entrepreneurs raise their funds is badly exposed by their lack of any other policy than bash the bankers to do something they never have before. Why no-one has picked this up yet I really don't understand.

3. At 13:28pm on 17th Dec 2010, nautonier wrote:
The problem is where can bank customers reasonably move their deposits to and make a protest?
===================
How about Nationwide Building Society?

'Those who run banks tell me they dare not make binding commitments to pay considerably smaller bonuses now and in future years, because they have no doubt that many of their best profit-generators would defect to banks based in Asia, Switzerland or the US'

Question 1 - Would they?
Question 2 - Would it really matter?
Question 3 - Are these players really indispensible? Are there not equally bright and talented financial brains out there in the market?

Call their respective bluffs -after all their collective track records are not exactly brilliant.

"Those who run banks tell me they dare not make binding commitments to pay considerably smaller bonuses now and in future years, because they have no doubt that many of their best profit-generators would defect to banks based in Asia, Switzerland or the US."

Yes, this is believable but so what? As things currently stand the banks appear to be doing little to help our economy recover from the state they put it into. So we are asked to believe that IF they are allowed continue overpaying their staff and IF they then change their behaviour to meet their responsibilities to the society that enriches them, then all will be well. And... it's the banking industry that's asking us to believe this (with all the credibility that "banking industry" implies)???

Well forgive my scepticism. How about if we just call the bluff? Our economy is in a mess anyway and it will eventually (if painfully) recover. How would it be if we had an economic recovery that had much less structural dependence on a greedy, irresponsible and unreliable financial services sector?

re post 1, 2 and 3 KG, WOTW and nautonnier,

Who is running the country..... perhaps noone is at the present moment running the country?
But the masters of the universe are certainly running their own bonus/pay culture.
Time was when shareholders received some news about company performance from their boards of directors, now it is just a slip of paper reminding the poor sucker public of the names of the remuneration committee.
If the coalition has any guts, it should investigate bank management and also pension fund management these two seem to dance to the same tune of lets rip off of the public.

I could write the minutes now and save them the time and effort of turning up.

Minister: You must restrain your bonuses and preserve capital voluntarily or we will have to legislate.

Banks: Do that and we will naff off to Asia or Switzerland and take our taxes with us.

Minister: err the next topic, please lend more to small business to support the economic growth so we don't have unemployment shooting out of control..

Banks: We can only lend if they want to borrow and are deemed risk worthy - unless of course you underwrite with taxpayers money much riskier investments fully so we can relax our lending criteria.

Minister: hmmm, have to think about that one, onto the press release. Can we say we have a broad agreement on a way forward.

Banks: Say what you like - we're off to spend our bonuses.

6. At 13:40pm on 17th Dec 2010, Decentjohn wrote:
What a shame that the BBC and Lib/Dems conspire to destroy London as a hugely respected financial centre

=================================

I am afraid the City did that all on their own - no help required from anyone else.

Robert

Thanks for that. I suppose the government are beginning to worry. Even the Irish with their 'Austerity Now' plan have forced the banks to cut bonuses despite a court ruling.

Its pure madness to allow this situation to continue and has become the single most powerful totem against the current system. We bail out banks that would have otherwise gone bust and ceased trading and they use the money to spiv and speculate and pay huge bonuses. It is simply unacceptable.

Thanks North Sea Halibut for your advice a few weeks back. I took it and joined in with 'Uncut'. They are a non violent direct action group focusing on the immorality and abuse within the tax system. I know it sounds very dull and dry but its not. We have real teeth and are stuffed full of really smart people who want things to change but do not want to smash things or hurt people but redistribute wealth. Eventually groups like us will bring change when we put forward our own candidates in elections.

Tomorrow i will be attending a protest against very rich tax avoiders, which will involve a sit in explaining to the general public how the rich have manipulated an already unfair system to avoid paying their fair share. We are also interested in our politicians who have been very active in the property markets. These tax avoiders are everywhere. I discovered this week that almost half the foreign footballers here pay no income tax whatsoever. These are people earning millions who contribute nothing.

Does anyone really think that the banks are going to listen to Vince Cable? They have their own agenda and lending to small business' is off. They are happy to rake in excessive unauthorised overdraft charges for SME's suffering as small loans are chicken feed. As for them lending, of course they are; to second and third tier fast loan companies charging 15% or more and struggling self employed familiies are left to explore that as their only option. Let see action not words from Vince and his mates.

I'll admit that I don't have a clue about finance, even she who makes me afraid has to give me pocket money. But why do we run away from bankers when they say we'll go else where if we don't get our bonuses and rewards. They claim they are special people with special talents. I say call their bluff. They are no more talented than the average barrow boy, barrow boys who joined the stock markets in the 80's, or is that an urban legend. I would cut their income by 80%, and they would still be far wealthier than 75% of the population and if they don't like that hire an up and coming graduate for 80% less than what the bankers expect now . If they do go to other countries then place a ban on them coming back to the U.K. or Europe after all they are willing to see the country fail so that they can profit. They can still have their exhorbitant lifestyle but not here. Banishment is an old punishment but it might just get these people to realise that there are others who cannot even afford food or a bed for the night.

8. At 13:45pm on 17th Dec 2010, AnotherEngineer wrote:

3. At 13:28pm on 17th Dec 2010, nautonier wrote:
The problem is where can bank customers reasonably move their deposits to and make a protest?
===================
How about Nationwide Building Society?
...........................

Yeah! ... A good choice ... I think ... although we don't really fully know all what happens in the B Socs either as their accounts are limited ... except the bonuses probably are not as big?

Be good to see a full list of alternatives... with comments of those who have made the 'switch'?

The simple fact is that unless bankers are squealing in pain by January then the Coalition and the LibDems will lose politically.

The LibDems will be seen to be not getting a fair deal out of the Coalition Agreement despite their 'sacrifices'.

Moreover every time the Coalition announces another cut they will be met by a "well what about the bankers" argument. If Cameron is worried about coming across as a toff just imagine how toxic this issue could become.

BTW - has anyone else noticed how the Murdoch press is suddenly appearing more friendly to Ed?

8. At 13:45pm on 17th Dec 2010, AnotherEngineer wrote:

"How about Nationwide Building Society?"

...all of your savings? - don't forget there's a limit on how much savings you're guaranteed by the Government.

(I'm not saying protest is a bad idea - but be careful as even 'safe lenders' are prone to runs in a panicky market)

To all those who suggest the bankers should be told to leave, and that we should reduce the size of "The City", have a quick look at how much they generate in Tax, and tell me where you would get their share from?

We cannot compete in manufacturing with the Far East, so we need to raise revenue elsewhere.

Stop being so angry and start thinking about solutions.

7. At 13:42pm on 17th Dec 2010, Ian wrote:

"Why no-one has picked this up yet I really don't understand."

There's a lot you don't understand - like why there's going to be a revolution for one thing!

Stop protecting the banks - they won't read this and reward you for it y'know, you're wasting your time and looking subservient in the process.

#1 Spot on.

As your previous post said Robert, the banks will be looking to roll over £500 Billion by 2012 in loand and gurantees from the UK taxmug.

Time to say 'No bonuses or no support' - pick one!

#7 Ian

The absence of home grown entrepreneurs is no hindrance to the bankers.
They merely import them. Watch what is about to happen in the North East where a Thai company is about to take over some assets of an Indian company at Redcar.
The steelworks was privatized and companies took on big debts.
Now the Thais want the UK taxpayers to give them a leg up by offering guarantees etc.
End result Thai entrepreneurs get a loan from RBS. RBS get a big arrangement fee. UK taxpayer gets the bill.
The deal will be sold as being good for employment in an unemployment black spot.
In reality the arrangement fees will be greater than any benefit in employment.
Unless you are a banker...

The main problem is not the banks - it's the unelected and unaccountable Rating Agencies.

These people passed off rubbish as AAA and collected handsome fees in the process. Now global markets and sovereign states await their pronouncements with bated breath.

They have shown in the past that they are not up to the job, and yet they are sill allowed to operate without scrutiny.

Crazy!!

No deal yet on bonuses or bank lending.
Ho-hum, NOT surprising.
Bank chief executives have been summoned to a meeting next week with the Chancellor of the Exchequer and the Business Secretary, to discuss the contentious questions of
- how much they lend to small businesses and
- the bonuses they plan to announce early in 2011 and in future years.
Ever heard the expression that you can lead a horse to water, but you can't make it drink?
No matter when the meeting happens, I wouldn't expect anything, except pretty words and obfuscation; in other words, nothing meaningful will be said or happen.
Before Christmas, after Christmas, it doesn't matter; the banks will maintain their role as the "Grinch who stole Christmas".
Business Secretary, Vince Cable, is keeping the pressure on banks to voluntarily cut bonuses. Voluntarily? He thinks the investment banks will do this voluntarily?
And to make new commitments to lend more to smaller companies.
Why would the investment banks do this when the big money is in "investment" as in derivative trading, risk-taking, speculation and gambling?
What the Business Secretary is doing is tantamount to nothing. Maybe he doesn't know what to do? Maybe the Government and the investment banks are too tight; after all, where do the big donations comes from for the political campaigns?
The Lib Dems could really step up, but will they?
The raising of responsible behavior from the investment banks is like raising the Titanic. However, I do believe if the LibDems take up this platform, it will prove immensely popular with the common fold WHO VOTE.
My very strong sense, like yours, is that George Osborne is taking a rather less aggressive approach to the negotiations with banks.
So, maybe someone should ask him why. I mean get the cards on the table: The banking cards will all be jokers, but at least the banking statements will be on record.
A senior banker: "The economic recovery will be much weaker unless we are focussed on how to support business and households...And it's much harder for us to do that when the government see us as part of the problem rather than as part of the solution".
Excuse me, but what does one have to do with the other?
Banks could easily prove that they are part of the solution, rather than part of the problem, IF they simply
1. got a handle on bonuses (rather than just calling them something else) and
2. split their investment/gambling function from their commercial/little businesses/ household function.
Seems simple enough to me; so, why aren't they doing it?
The total sum of bonuses announced by banks this year will be considerably less than last year, because it has been a poorer year for investment banking, which is where the bulk of bonuses are paid.
No, I don't think that's right.
Bonuses will appear smaller because they will be reclassified and disappear into nebulous balance sheets which will make banking income seem smaller.
Read the next banking statement (closely): Those who run banks tell me they dare not make binding commitments to pay considerably smaller bonuses now and in future years, because they have no doubt that many of their best profit-generators would defect to banks based in Asia, Switzerland or the US.
There is nothing in this statement about about actual bonus reduction, just a fear that the big profit gnerators may have to move elsewhere; that to me, sounds more like a threat than anything else. Why does George Osborne care; he should challenge these investment banks.
After all, all Brits need for the recovery is commercial banking.
Banks also remain at loggerheads with the government and Bank of England over the cause of the long-running decline in lending to small and medium size businesses.
Let me straighten this out: investment banks make little money on households and small businesses. They want the big speculation, risk-taking ventures, and that's where the money goes. Also, many of these banks are arms of huge investment banks headquartered in the United States, and the United States is controlled by nine (9) huge banks.
The banks continue to insist that the fundamental problem is a lack of demand; from the small business perspective the problem is that the banks will not lend. In stark contrast, the Bank of England recently reiterated that it believes the problem is that the banks are not supplying enough credit. Yes, this is correct; there's no big banking payback for commercial credit.

I know everyone is against bonuses, but you do realise that 51% of them (the big ones that is) are paid as tax which supports you and me, dont you?. And before you start this stuff about clever accountants reducing their tax bills, remember that most people employed in banks are in PAYE so the tax is taken up front. Perhaps there's jealousy, perhaps it is really is unjust that some people get paid so much but we are all getting a benefit aren't we? Do you want to lose the tax revenues just so you can feel better than someone else isn't doing as well personally?

To Decentjohn

The BBC and the Lib Dems did not conspire to destroy "London's reputation as a hugely respected finanacial centre". The greedy grasping bank executives have done that themselves. To have operated and traded as they did, and still do, they have shown themselves up to be the greedy idiots those of us with some intelligence and some understanding of the financial world have always known they were.

The main thing you could say they have been clever about was to engineer the system so that the taxpayer had no option but to bail them out and they were a little bit clever in hoodwinking Gordon Brown (That was not really that difficult to do though because poor old Gordon has been shown up to be a bit gullible.)", into believing that there would be "No more Boom and Bust".

They should and must be made to pay for their greed and idiocy. If they were in any other business they would be unemployed. Don't just stop their bonuses. Reduce their basic pay to a maximum of 20 times what a bank clerk is paid.

The only thing being discussed with boy George and Varley are how much and by what means are they going to sneakily pay bonuses without the general public getting too exorcised or taking to the streets like our students, the Irish, Greeks, Sanish and Italians.

Their bluff should be called. Let those who want to go abroad go but please don't let them take the money and services of the British public with them. I doubt if many nations would employee them and let them get their greedy hands on their citizen's money. They could then play their casino trading and lending games with their own monies.

Those that remain should be split up. The general public should be able to have retail banks who's sole remit is to take deposit and make loans to the general public and our own business community. While that is being done they could also be made to stop their high pressured insurance and so called investment sales which produce huge volumes of complaints from the general public.

If you really want to do something effective George pick up the phone and have a word with Ireland's Lenihan and ask him what bogeyman he threatened their bankers with in order to get them to pass on bonuses. Don't let them get away with changing bonuses into basic pay and have a word with your pal David about executive's pay being limited to a factor of 20 times the lowest paid's as he is considering for local government bodies. It's a pity George has not got a bit of Irish blood or DNA in him.

One other thing George should consider but probably will not. Get the bankers and ex bankers out of the FSA and it's new incarnation the CPMA. They have infiltrated it right from it's inception and now run it totally. How on earth can we expect these greedy individuals to regulate anything they can not even regulate their own greed. Contrary to the belief of some people poachers do not make good gamekeepers.

3. At 13:28pm on 17th Dec 2010, nautonier wrote:
The only protest and objection and action that the banks will respond to is:-

1) legislation
2) customers moving their deposits

The problem is where can bank customers reasonably move their deposits to and make a protest?

Good question Nautonier.
Re: No.1 = https://www.positivemoney.org.uk/
Re: No.2 = Nowhere. That’s the end product of a cartel operating a closed system.

20. At 14:33pm on 17th Dec 2010, thetubbster wrote:

"To all those who suggest the bankers should be told to leave, and that we should reduce the size of "The City", have a quick look at how much they generate in Tax, and tell me where you would get their share from?"

This is akin to pointing at the leech and stating "look at all that blood it's generating" while it's attached to your leg.....and then using that blood to give yourself a tranfusion - which of course you're thankful for!

They pay taxes from the profits they generate which are extracted from the work WE do.
Imagine how much tax WE could afford to pay if we didn't have to keep making interest payments to banks!

Most people tax income could rise by between 4% and 20% a year - without it having any effect on the business owner.

Maybe you should consider the deeper question of where the bankers profits come from before applauding their generosity in paying tax.

#19. writingsonthewall wrote:

"#8. AnotherEngineer wrote:

"How about Nationwide Building Society?"

...all of your savings? - don't forget there's a limit on how much savings you're guaranteed by the Government.
"

Info.

The 'safe' savings per separate FSA registration (look it up to be sure) 'should' rise to €100,000 at the end of this year (when ever that is!) So that will be £85,000 rather than the present £50,000.

Comment.

I am really quite concerned that institutions with a huge reliance of 'secured' debt to support their balance sheets may be at some considerable risk. Rather like the banks that lend to other banks that lend to overseas housing (thinking of Spain etc.) Nowhere is 100% safe, or close to it. However if the aforementioned building society - the largest in the UK was in anyway in trouble my judgement is that they would have to be rescued, just as a bank that is 'too big to fail'. (This does in no suggest that borrowers will ever be forgiven their debts!)

More Comment.

Bonuses - We need a National Maximum Income/Wage set at twenty times the National Minimum Wage! (Thank you for inserting the 'times' in my contribution of yesterday!)

20. At 14:33pm on 17th Dec 2010, thetubbster wrote:

To all those who suggest the bankers should be told to leave, and that we should reduce the size of "The City", have a quick look at how much they generate in Tax, and tell me where you would get their share from?

We cannot compete in manufacturing with the Far East, so we need to raise revenue elsewhere.

Stop being so angry and start thinking about solutions.

===================================================

I'm no fan of bankers, period!

But I agree with you. The herd is focussed on the wrong issue and that will get us nowhere.

Step 1 to move forward - dump the Rating Agencies!

6. At 13:40pm on 17th Dec 2010, Decentjohn wrote:

"What a shame that the BBC and Lib/Dems conspire to destroy London as a hugely respected financial centre"

Hugely respected - by whom exactly?

You need to stop reading those financial type papers where sympathetic journalists keep putting the case for bankers and wrapping it up in some patriotic tale of historical significance.

Nobody ever respected London as a financial centre - it just was one (a financial centre) because most of the worlds money ended up here (after being stolen from the colonies)

This is similar to the media premise that our Royal family are popular and respected in this country. Strangely it seems when they came face to face with people who hadn't actually requested to meet them - you know, ordinary people - they shouted 'off with their heads' and such like.

It's all media fantasy - harking after a bygone era when we were never actually respected - but when nations feared us and our retribution that they would tell us we were near Gods if they thought it would curry favour.

It does make me sick this instilled sense of superiority some people in this country seem to have as a birthright. This nation is not as clever and respected as it's self-made history claims - otherwise why did all the colonies leave us as soon as they got the chance? (and kicked us out in many cases)

This same disease is spread across America - they still think they're some 'great and honest industrial powerhouse' - even though they owe more money to the world than anyone has ever done before - and with barely a working industry left - they have no means of paying it back, other than by defrauding the other nations through the printing of money.

The arrogance of some nations is truly staggering.

'The banks continue to insist that the fundamental problem is a lack of demand, that small businesses don't wish to borrow. In stark contrast, the Bank of England recently reiterated that it believes the problem is that the banks are not supplying enough credit.'

The issue is the interest rates proposed. In the high teens. It is quite clear that banks are milking the economy to plump up their bottom line. I also keep hearing of the contraction of borrowing limits and rising interest rates on small business borrowing, ie less for more. We are not seeking borrowing but if we were our answer would be Not at all interested under these rates. I presume that answer would also quoted as justification by a bank as a lack of demand.

So just to get this right. The retail banking side has massive exposure on duff mortgages domestic and commercial etc etc. And recovers any losses via very high interest rates via high street banking. And the investment banking side wants to gamble and pay bonuses and is involved in CDS game where toxic mortgages from the retail side are sliced and diced stamped as good and sold on by a man saying he is 'doing Gods work'. And any losses from either end or the middle have to be covered by the lender of last resort, Joe Public. And this is 'living dangerously'.

Meanwhile there is a risk of more stuff going toxic, ie something called 'LOSSES' showing up. Ireland, Spain of note. And lets not forget the 41 percent of mortgage holders in the US seriously considering throwing the keys in and walking, which they can do over there, and pushing a great deal more into toxic.

'Banks are an almost irresistible attraction for that element of our society which seeks unearned money.' J. Edgar Hoover. You got that one right J E.

Well the next time the banks line up for taxpayers dough should be interesting. The politicans will be fresh out of acceptable reasons to provide it. Tiptoe through the tulips, thru the tulips, 'cept the're not tulips, the're something else begining with 't'. Thru the tulips, thru the tulips.

26. At 14:48pm on 17th Dec 2010, pkr1771 wrote:
Do you want to lose the tax revenues just so you can feel better than someone else isn't doing as well personally?
===================
many of the people who post on here seem to want that.

28. At 15:02pm on 17th Dec 2010, Dempster wrote:
3. At 13:28pm on 17th Dec 2010, nautonier wrote:
The only protest and objection and action that the banks will respond to is:-

1) legislation
2) customers moving their deposits

The problem is where can bank customers reasonably move their deposits to and make a protest?

Good question Nautonier.
Re: No.1 = [Unsuitable/Broken URL removed by Moderator]
======================
Something that I have always wondered about this plan - since banks will be prohibited from lending most of the money that is currently lent, how will they get it back (preferably without destroying the economy)?

29. At 15:11pm on 17th Dec 2010, writingsonthewall wrote:
20. At 14:33pm on 17th Dec 2010, thetubbster wrote:

"To all those who suggest the bankers should be told to leave, and that we should reduce the size of "The City", have a quick look at how much they generate in Tax, and tell me where you would get their share from?"

and:-

Maybe you should consider the deeper question of where the bankers profits come from before applauding their generosity in paying tax.

===================================================

In this Mickey Mouse financial world, I suspect that most of their profits come from gambling. You know - the usual currency speculation, derivatives and M&A nonsense.

I don't like the set-up either. I believe it's a pathetic way to run an economy and an insult to the people who actually produce REAL wealth.

Regrettably, successive governments of all shades have dragged us down to this level. Whether we like it or not, this is the hand we have been dealt and we have no choice but to do the best we can.

Mind you, we should do everything we can to make sure that, in future, our economy is not run by imbeciles.

26 pkr1771:

'I know everyone is against bonuses, but you do realise that 51% of them (the big ones that is) are paid as tax which supports you and me, dont you?..... Perhaps there's jealousy, perhaps it is really is unjust that some people get paid so much but we are all getting a benefit aren't we? Do you want to lose the tax revenues just so you can feel better than someone else isn't doing as well personally?'



I am not in the least bothered about somebody earning money and paying tax. I am bothered about corporations that provided 49 percent of mortgages at the peak as liar loans, ie self cert. That say they are private and can act unilaterally but demand taxpayer money. That charge high retail interest rates to plump their bottom line on a what appears to be a cartel basis, that have the economy in a lockdown. Normally in a business which is bust bonuses do not get paid. Oh the're not bust, fine, pay back the taxpayer money.

'It is just as important that business keep out of government as that government keep out of business.' Herbert Hoover.

It is precisely because government did not keep business regulation at the front of the list and got too cosy with the banks that this mess happened. Now the banks want to be close to government money but still say they are private. No end without separation of this ghastly Siamese twin.

26. At 14:48pm on 17th Dec 2010, pkr1771 wrote:
‘I know everyone is against bonuses, but you do realise that 51% of them (the big ones that is) are paid as tax which supports you and me, dont you?. And before you start this stuff about clever accountants reducing their tax bills, remember that most people employed in banks are in PAYE so the tax is taken up front. Perhaps there's jealousy, perhaps it is really is unjust that some people get paid so much but we are all getting a benefit aren't we?’

Answer: Well no not really.
Given that all money is created as debt bearing interest, someone, somewhere has had to go into debt to create those bonuses.

27. At 14:52pm on 17th Dec 2010, Johnjo65 wrote:
To Decentjohn

The main thing you could say they have been clever about was to engineer the system so that the taxpayer had no option but to bail them out and they were a little bit clever in hoodwinking Gordon Brown (That was not really that difficult to do though because poor old Gordon has been shown up to be a bit gullible.)", into believing that there would be "No more Boom and Bust".
================================================================

It is far worse than that. The banks have in effect taken over the government. Government on behalf of tax payers lends money to banks who buy government bonds used to fund the lending. Banks have no money to lend to on to enough low risk high return borrowers.

We'll never get agreement on bonuses as the corporate fascist elite maybe prize turkeys (I use stronger language when speaking) but they don't vote for Christmas and the politicians (NuLabour and ConDems) are too blind or stupid to realise that the bailing out of the banks has dimished their 'grip' on power.

It took me longer than it should have (18 months or so) to realise the extent of what has happened here so I urge others to wake up and wake up quickly on this. Stop apologising for these criminals who have bankrupted and continue to bankrupt this country and have a hand in doing so to many others

24 TonyH:

'The main problem is not the banks - it's the unelected and unaccountable Rating Agencies.

These people passed off rubbish as AAA and collected handsome fees in the process. Now global markets and sovereign states await their pronouncements with bated breath.'



Who pays the fees. The people producing the rubbish that want it rubber stamped.

Good stuff Robert, I think you can go home now and put your feet up.
Compliments of the season and all that.
Taking of which a typically unseasonal kicking from Moodys for Ireland. Thanks a lot. Is this the same mob handing out tripple A ratings for all that toxic dross Lehman Brothers were peddling just before they went bust? What a bunch of b*****ds, no seasonal greetings for them!
Regards, etc.

The only way to beat these guys is consumer action e.g.:, the old saying action speaks louder than words!
Move your bank account to a credit union.
Do not take out any loans with them.
Cut up your credit cards and pay them off.
Look at alternative sources for your mortgage.
Freeze them out of any financial transaction.

Other option is to nationalize them like Venezuela, sack all the dinosaurs that created this global mess, no golden handshakes. Switch the focus back to customers instead of shareholder dividends. Bring back the banking with the personal touch but controlled by the state not private institutions.

This is all leading to a stitch up whereby the taxpayer will underwrite the lions share of the loans to small business, its all so predictable. Why should the banks do anything other than sit on their hands until they get the terms they want?
Its only a matter of time before the politicians cave in and the banks know it, they make the rules. Privatised profit, socialised loss. These meetings will consist of Osborne and Cable laying out the red carpet and asking just how much more of our money they can sign over.

I thought POTUS was supposed to be sorting out banking regulation on his side of the pond, thus removing the attraction for our leading investment bankers to relocate to the USA. Similarly, I thought Switzerland were just as committed to keeping a lid on things, especially as the great and the good of world investment banking, having convened in Basel, gave us Basel III.

However, the reality would appear to be that some banks are not only too large to fail, but much too large to be influenced, let alone brought to book, by any individual country in which they operate. In effect, having gone supra-national, some banks can thumb their noses at the elected representatives of any and all of the western democracies in which they are based and can say, effectively, "we are untouchable".

The sweeping rhetoric, which is POTUS's most recognisable characteristic, is woefully empty. He is a lame duck, and has already thrown in the towel as far as Wall Street is concerned. Switzerland, and its gnomes of Zurich, have constantly demonstrated their disdain for the normal social and economic mores that govern the lives of ordinary people. One has only to look at how they guard their secrecy wrt to who they will do business with - genocidal maniacs walk this way. So no change there.

One can understand why any UK chancellor would be loathe to set out a new set of rules to govern indigenous banks given the actions of our "allies". Any unilateral action taken by the UK would be seen by our main investment banking competitors as a business oportunity rather than a sensible course of action to prevent another banking crisis.

So that leaves one with the uncomfortable feeling that the next banking crisis, and inevitable bail out, will be just a matter of time - years may be, but nonetheless inevitable. What a time to be an international banker.

The yanks are blind to their relative decline in terms of world influence, and yet still behave as if they alone make a difference. I fear this is not going to end well when the BRIC's and other asian economies effectively eclipse the USA. The Tea Party may just be the beginning of the end for relatively sane politics in the USA.

“No deal yet on bonuses or bank lending”

Irrelevant really.

What is needed is a set of rules limiting politicians from using unlimited government borrowing to increase national debt and the major debts would not arise.

Shoring up the banks and smothering them with new rules is a minor red herring in comparison.

26. At 14:48pm on 17th Dec 2010, pkr1771 wrote:

"I know everyone is against bonuses, but you do realise that 51% of them (the big ones that is) are paid as tax which supports you and me, dont you?."

Incredible - hold the front pages - 51% of your own wealth returned to you - what an incredible deal!
If you're impressed by the bonuses, I've got a great little tip for you - my mate Charles has set up a little scheme, it's a killer return and all you need to do is put down some cash and spread the word.
The scheme's name? - ah yes, the Charles Ponzi savings scheme.

"And before you start this stuff about clever accountants reducing their tax bills, remember that most people employed in banks are in PAYE so the tax is taken up front."

Most? - not in my experience they're not. Generally there is a mixture of contractors and non-doms - only the lower level staff are on PAYE - we wouldn't want the cleaner avoiding tax now would we?

"Perhaps there's jealousy,"

...or perhaps there is sychofantasy...

"perhaps it is really is unjust that some people get paid so much but we are all getting a benefit aren't we?"

...can you explain what a banker does to justify these extreme levels of reward?
Do they split the atom?
Do they perform life endangering tasks?
Do they save lives?
Do they perform work that is so brutal or haenous that nobody else will touch it?

...please do tell us what is it they do that justifies salaries and bonuses in excess of 200,000 times the average.

"Do you want to lose the tax revenues just so you can feel better than someone else isn't doing as well personally?"

Why - with the banker gone will we not need clothes? will we not need food? will we not need houses built, roads repaired, train lines constructed?

These activities are where the tax comes from - not the activities of the banks.

It's good to see the supporters of banks always have the same failed argument and always show their lack of analytical thought but never let it stop them proudly broadcasting it as fact.

Please go read a book - not a newspaper.

Although I am not surprised at attitudes like this - for about the last 3 weeks in the Evening standard the 'journalist' Chris Blackhurst has been pleading on behalf of the bankers like a screaming blonde outside a nightclub in Brentwood "Leave it, leave it" is the cry of Mr Blackhurst as the nasty public lay into the banks.

Clearly this shows the standard of journalism in the UK today, the journalists think of an opinion and then write a piece to justify it - rather than gathering the story and allowing the reader to make an opinion based on the facts.

How sad that it has come to this - journalists who support banks who support politicans who support wars and corrupt Governments.....and poor old us left in the middle paying for it all.

Here he is claiming we shouldn't kill the golden goose - which is quite appropriate as this is a journalist reporting on a fairytale (or more accurately an Aesop's fable) but presenting it as fact.

https://www.thisislondon.co.uk/standard/article-23907659-dont-kill-the-city-goose-that-lays-the-golden-egg.do

It's such a pleading letter I might send it on to Santa for him....

28. At 15:02pm on 17th Dec 2010, Dempster wrote:

3. At 13:28pm on 17th Dec 2010, nautonier wrote:
The only protest and objection and action that the banks will respond to is:-

1) legislation
2) customers moving their deposits

The problem is where can bank customers reasonably move their deposits to and make a protest?

Good question Nautonier.
Re: No.1 = https://www.positivemoney.org.uk/
Re: No.2 = Nowhere. That’s the end product of a cartel operating a closed system.
..........................

Hi Dempster

A quote from the Positive Money web-site:

'Laws that make it illegal for you to print your own £5 or £10 notes have been in place since 1844. But those laws haven't been updated to account for the fact that almost all money now is electronic. Because of this loophole, banks worldwide now have the power to create money, effectively out of nothing.'
..........................

Potentially, not only have 'the banks' over-leant ... they have also been lending out money which did/does not actually exist?

Britain is indebted for the next 30-40 years as a result of the chaos/crises? Why pay any bonuses?

So it doesn't matter who we bank with .... at some point in time ... the entire national, european or even global monetary system can be worthless.

No wonder some of the banks will not allow any thorough independent analysis of their accounts ... as some (?) of the banks cannot properly account for their finances anyway ... potentially 'they' have simply lost control! (?) ... and all bank bail outs are just a temporary fix.

What some may think as FRB is in effect due to printing money which does not exist and I'm not talking about the risk effect here on outcomes... I'm talking about money which did not exist before the transactions were made - possibly with staged payments/advances?

The difference may be subtle but it is an important issue?

The difference between incompetence and outright blatant fraud/criminal negligence.

So why pay any bonuses until a full and proper investigation is made?

The government should play no role in deciding who banks lend to. Unlike WOTW and other bank bailout supporters, I have always maintained that they should have been put through Chapter 11 style bankruptcy and the bad debt liquidated.

Because we took the cowards' way out we now have the mother of all moral hazards, stealing the money of the working poor and pouring it down a bottomless pit. You should only lend money to people who you think will pay you back, this includes lending to banks by way of deposits.

21. At 14:35pm on 17th Dec 2010, writingsonthewall wrote:
7. At 13:42pm on 17th Dec 2010, Ian wrote:

""Why no-one has picked this up yet I really don't understand."

There's a lot you don't understand - like why there's going to be a revolution for one thing!

Stop protecting the banks - they won't read this and reward you for it y'know, you're wasting your time and looking subservient in the process."

--------------------------

You are confusing yourself here, WOTW. Still that won't be the first time although on this ocassion it is not entirely your fault.

For some reason there are two bloggers with the same name here - not sure how moderators allowed that to happen. One of us is just less prolific than the other. Check it out by clicking through on my posts and the other Ian's.

But - you'll be delighted to hear - I'm still very much around :-)

35. At 15:34pm on 17th Dec 2010, AnotherEngineer wrote:
‘Something that I have always wondered about this plan - since banks will be prohibited from lending most of the money that is currently lent, how will they get it back (preferably without destroying the economy)?’
The methodology of the whole process is contained in:
‘THE SUBMISSION TO THE INDEPENDENT COMMISSION ON BANKING’
It runs to around 40 pages and is in pdf so I can’t post a link.

You’d have to go to the website (https://www.positivemoney.org.uk/ ) to read it.

36. At 15:35pm on 17th Dec 2010, TonyH wrote:

"Mind you, we should do everything we can to make sure that, in future, our economy is not run by imbeciles."

Unfrotunately the candidates we have to choose from are all from this set.

Look, basically all we intelligent, useful and productive people have let this happen, we thought we could get on with our lives while the buffoons of politics played their little (what we thought were harmless) games - but they couldn't. We let the bankers think they were clever and pay themselves loads of money as long as it didn't interfere with our lives - but they managed to mess it all up.

Now we're going to have to stop what we're doing, come out of our sheds and put this thing right.

Nobody wants to do it, nobody has the time to do it - but we now have no choice.

Parents will know this feeling, it's like when you leave the kids to play nicely in their rooms and eventually you have to go upstairs because it sounds like the 'new game' is knocking plaster off the ceiling in the living room.

40. At 15:51pm on 17th Dec 2010, Not Buzz Windrip wrote:
24 TonyH:

'The main problem is not the banks - it's the unelected and unaccountable Rating Agencies.

These people passed off rubbish as AAA and collected handsome fees in the process. Now global markets and sovereign states await their pronouncements with bated breath.'

'Who pays the fees. The people producing the rubbish that want it rubber stamped.'

==================================================

I agree!

But just imagine the alternative scenario if the Rating Agencies had said "Get lost pal. This stuff is rubbish!"

I don't think the banks would then have been so keen to deal.

Let's be honest, you'd have to possess knuckles that scraped the pavement to pay good money for that junk!

46. At 16:11pm on 17th Dec 2010, writingsonthewall wrote:
Here he is claiming we shouldn't kill the golden goose - which is quite appropriate as this is a journalist reporting on a fairytale (or more accurately an Aesop's fable) but presenting it as fact.

https://www.thisislondon.co.uk/standard/article-23907659-dont-kill-the-city-goose-that-lays-the-golden-egg.do
================================================================

A case of the Blinded having been lead by the Blind. Not so much a journalist as a merchant of propoganda. Maybe he should have a chat with Creationist and then he can publish an article that the earth is only 6000 years old as he seems to have been born yesterday. Muppet!

As you say bankers have never saved one life - all they have done is punched numbers into self-regulated spreadsheets and decimated (paper or otherwise) wealth on the grounds they can’t spot or don't care about the fact that they were knowingly part of and/or created huge Ponzi schemes.

To me the problem of bonuses is quite simple. The principle is that banks are free to pay what bonuses they feel will motivate their talent. However should they need bailing out some formula would come into force where the share holders (who are suppose to approve the bonus system) lose their holding completely. Should the share holder be an institution or fund investing on behalf of individuals then the management team of that fund should have some personal financial consequence which is only partly insurable.

The whole objection to bonuses is that you get them if your gambles come off. If they don't come off nothing much happens. If they go sour all that happens is that you lose that job and waltz into another one. There are no serious consequences to those playing roulette.

This isn't a fully thought idea, but I hope you understand the principle.

41. At 15:51pm on 17th Dec 2010, RWWCardiff

What's most imteresting about the Moody's move (and the others since Ireland got bailed out) is that being bailed out seems to mean your credit rating hits the 'junk' level pretty quickly.
It's a default - because what nobody realises is that to repair that junk rating will take a lot of time - time when Governments show fiscal discipline and growth - and all during that time the Government in question will be reliant on alternative funding (i.e. the EU).

This doesn't seem to have been considered by our lackey media - too busy worrying about the feed of information being cut off.

Greece and Ireland will be reliant on EU funding for at least 10 years - as they cannot afford the market rates when they requied bailing out - and now their ratings are several notches lower.

Logically they will need to return to better than the last rating they were on before they came out of the market before they can return to the market.

....and does the EU (or rather France and Germany) have enough money?

Don't forget Spain, Portugal and Italy will merely compound the problem.

One reason I gave up watching club football many years ago was the development of the individual self-interest of the players. At one time players had a local town, city or at least national affiliation with a team and the pride and attachment that resulted from that connection - now they have no allegiance to their clubs at all beyond their salaries and marketability. The teams now do not exist in any meaningful sense of a semi-permanent unit with a connection to the physical location to their grounds. When was the last time a UK national team did well in a tournament and is there a connection?
But at least footballers are generally paid for by the people who want to pay for them

So it is with the banking “stars”. They have no allegiance at all to anyone - their employers, teams, location of workplace - nothing beyond their own wallets.

We must be loopy to want to attract people like that, to pay them anything above minimum wage and to base a large proportion of our entire economy on them. But we are gibbering, table-leg chewing, salivating, cretins to fund their avarice with our taxes.

49. At 16:26pm on 17th Dec 2010, Ian wrote:

"You are confusing yourself here, WOTW. Still that won't be the first time although on this ocassion it is not entirely your fault.

For some reason there are two bloggers with the same name here - not sure how moderators allowed that to happen. One of us is just less prolific than the other. Check it out by clicking through on my posts and the other Ian's."

All the posts seem to be attributed to this login - not sure this is a different ian. Maybe you've just seen the light and are trying to keep your head down.

Don't worry, I won't make it painful for you - all are welcome in the new revolutionary force sweeping Britain.

If you want a huge bonus work for a bank. Supply and demand.
To stop it just name and shame, government could legislate to force the listing of anyone earning over £1M gross including bonuses in any business. In that way the clever media could produce a simple league table of the big bonus payers and the public could choose their bank accordingly.
Nationalisation - a certain success, it's always worked well. Let's get real ~ we need successful banks.

At 14:52pm on 17th Dec 2010, Johnjo65 wrote:

To Decentjohn

The BBC and the Lib Dems did not conspire to destroy "London's reputation ......

To Johnjo65 - I think that you will find that there has been a world wide recession and a world wide squeeze on credit. The problems have not been confined to London nor to Gordon Brown - a little reading of the worlds press might help.

The points that I made are
1 Other countries hold London in high regard as a finacial centre
2 The Lib/Dems are merely using bank bonuses as a smoke screen to cover their own problems. In that endeavour they have been assisted by the BBC. How often do business issues (other than banking) get discussed on this site?

48. At 16:26pm on 17th Dec 2010, truths33k3r wrote:

"The government should play no role in deciding who banks lend to. Unlike WOTW and other bank bailout supporters, I have always maintained that they should have been put through Chapter 11 style bankruptcy and the bad debt liquidated."

...and the savers? - they shoudl have been allowed to burn?

Anyone who happened to be moving house / liquidating their business / retiring - should all have been swept away and been left with the maximum £25k?

I'm not a supporter of bailing out the banks - I just say by that stage we had little choice.
I would have nationalised the lot, then started to dismantle them after taking back all the CEO's shares and holdings and using them to pay creditors as I wound the banks down citing 'gross negligence' as the reason for such action.

Eventually there would have just been 1 state bank - and every voter in the nation would get a share (no vote, no share) - then we could have a true democratic banking system where we all genuinely have a shared vested interest.

Your way would have led to chaos and retribution - because in case you didn't notice those folk queing outside Northern Rock weren't going to walk away quietly when you came out to tell them "sorry, there's no money left".

...and it would have been all the banks - because the 'wonderful' thing about globalisation and diversity is that when one goes down the rest follow in a very large game of dominoes.

Before the crunch, banks and other financial institutions provided masses of credit by levering up upon a very small proportion of reserves. After the trauma of the crunch, when they were only saved by the generosity of governments in converting their bad debts to sovereign debt, they are unlikely resume lending with such abandon for many years to come, even if they are allowed to do so.

The government is beating a dead horse when it tries to revive bank lending to its former level. It must accept that businesses need to be enabled to accumulate more of their own capital. This means more QE and fiscal easing to allow the new money to get to where it is needed.

So bankers are all welcome to naff off, are they?

Well I'm not a banker but thankfully have a decent grasp of mathematics.

Now as the "City" accounts for almost a quarter/fifth of tax revenues generated, if even half of them ship off we're faced with a further 10% deficit, meaning yet more spending cuts.
Now a few percentage points in cuts, not even yet enacted, has lead to rioting in the streets in some parts. What do you think it'll look like if you double or treble the proposed cuts?

I dont enjoy the way the world works, and certainly not the way London works, but there was never a more appropriate time to be discussing noses and faces.

The UK is stuck with a bloated financial services sector and chasing them away will only make our woes far worse.

I'm sorry - I've just got to get this message across!

The banks were the 'fall guys'. The real villains in this tragedy were the Rating Agencies.

If all the toxic rubbish that was dumped for sound money had been honestly rated, our banks would not have been suckered, and would be in a much stronger position today.

Bankers bonus's really are a relatively minor issue. Think global. Think yesterday's downgrade of Ireland's credit rating! Whose expert opinion has determined the economic fate of thousands - the Rating Agencies!

Who are these people? What are their qualifications? What's their track record? Can we trust their judgement? What's their motivation? How are they paid? Who assesses them?

Aren't I the boring one!

What annoys me about modern day British politics is the fact that officials (professional politicians) are appointed to jobs to which they are not qualified.

Lets look at the last few chancellors:
Ken Clark - solicitor
Gordon Brown - journalist
Alastair Darling - solicitor
George Osborne - studied history and wanted to become a journalist

Is it too much to ask for an accountant to run the books of the nation?
Or is it a case of Oxford not offering such a degree and thus no members of the Bullingdon Club being accountants?

How is it any surprise that Britain's finances are in a mess if they refuse to appoint somebody who has the skill set actually needed?

It has always been like this.
W H Smith was made fun of as First Sea Lord in Victorian times

https://en.wikipedia.org/wiki/File:Our_New_First_Lord_at_Sea.png

Again:

Shareholders equity and taxpayers bailouts have been used to cover the bailouts.
So in effect, until both have been repaid, there isn't a profit to pay a bonus on.

So no bonuses for investment bankers or traders involved with the bailed out banks.

Any other response is not just.

57. At 16:43pm on 17th Dec 2010, writingsonthewall wrote:

Don't worry, I won't make it painful for you - all are welcome in the new revolutionary force sweeping Britain.

----------------

I worry not, my friend. Quite the opposite. I have been keeping low profile lately as you seem to be in good form and are actually quite entertaining. You even moderated your usual discourteous tone to your opponents. Must be that Christmas spirit appeals even to you....

On bankers and the banks I agree entirely with your sentiment and arguments you provide. Although I feel they should be allowed to fail like in Iceland.

So, you haven't found yet out how to check past posts belonging to individual bloggers? Perhaps technology is not your strongest point. Allow me to elaborate here.

Go to post 7 and click on "Ian" (one in bold). You will be sent to User Profile page that shows for that Ian all his three comments made between 16 December 2009 and today. Then go to post 49 and do the same. Notice any difference? See, we all learn something every day... :-)

#41

"Is this the same mob handing out tripple A ratings for all that toxic dross Lehman Brothers were peddling just before they went bust?"

Yes and no. It was the same organisation. However the techniques involved in country credit ratings are quite different to the discredited methods used to rate CDO risk. It is an unrelated (and far more established) discipline involving economic reckoning rather than quantitative analysis and would be done by entirely different teams.

This comment was removed because the moderators found it broke the house rules. Explain.

46. At 16:11pm on 17th Dec 2010, writingsonthewall wrote:

"Please go read a book - not a newspaper."

How arrogant. How do you know what I read? How would you like me to say that you're obiously a Guardian reader? I've studied economics (but please don't call me an economist) and I know a little of the banking world as well as the real world. I wouldn't have replied to you other than this ill-informed comment. Forums are about debate but you can't do that without getting personal.


"Incredible - hold the front pages - 51% of your own wealth returned to you - what an incredible deal!"

This might be true if the banks only operated in the UK re-circulating the same money but that's not the case. Banking may be a zero sum game but not when you take into account national boundaries. If UK banks are profitable then that is wealth creation by net exporting. Sorry if that offends you because it doesn't involve digging things out of the ground but it still benefits us all.

The extension of your argument is that because taxes redistribute our money that they don't damage wealth creation. Perhaps you'd agree but you'd be wrong.


"Most? - not in my experience they're not. Generally there is a mixture of contractors and non-doms"

Our experiences differ. I doubt the FSA would allow contractors to hold restricted positions within banks. Hedge Funds might allow this but they aren't banks, don't get tax payer support and don't 'gamble' with the public's money. UK citizens would struggle to hold down a full-time job in the UK and claim non-dom status. Not impossible but I doubt it's common. Anyway, as IT contractors found with IR35, taking contractor status doesn't hide you from income tax.


"...can you explain what a banker does to justify these extreme levels of reward?"

That's difficult, because of course all bankers do is type numbers into spreadsheets - everyone can do that can't they?

I think you're mistaking value to humanity and society to an economic value. Capitalism doesn't work that way, no matter how much you think that isn't fair. Being a fireman, for example, is a most noble of professions and undoubtedly of enormous value to society. But society won't pay 100k a year to the fireman even though he or she risks their own life to save others. That's probably because there's a queue of 30 people ready, able and qualified to take any vacancy. Economics, you see. That's why your income multiples don't work; they're artifical and have no basis in how the world really works.

So why are bankers rated highly from an economics point of view? It's certainly nothing to do with hours being worked. Partly they're high paid because they work in an environment that can afford it. Given that most of the banks in the City are foreign, is it not better that they pay UK citizens who pay UK tax and spend into the UK economy than to repatriate their profits back to their base country. Other than that, on the presumption that banks (nor any other rational organisation) will not pay over the odds for staff then they we must assume they are paid the market prevailing rate. Bankers aren't unionised so there's no collective bargaining to distort the supply/demand relationship.

I admit that the argument is less clear for the banks that accepted (or at least asked for) tax payer assisitance. The individuals whose decisions led to the banks failing must go, if they haven't already. Tax payers will recoup their stake in the banks quicker and with higher return if and when the banks make profits. Understandably, society doesn't want to see these banks pay large amounts, partly it feels like we're paying the very individuals who made the mistakes. Not sure that's true.


"Why - with the banker gone will we not need clothes? will we not need food? will we not need houses built, roads repaired, train lines constructed?"

Will we not want fixed rate mortgages? so you can pass on interest rate risks to the banks. Who will fund the building of houses by taking a risk on future repayment? Who will fund the companies who invest in train lines? It's possible your answer here involves nationalisation. I think I trust governments even less than the markets.

“63. At 17:09pm on 17th Dec 2010, TonyH wrote: Think yesterday's downgrade of Ireland's credit rating! Whose expert opinion has determined the economic fate of thousands - the Rating Agencies!”

You are confusing cause and effect. The agencies downgraded Eire debt because the government decided to absorb more of the private bank debt into national debt making government default more likely, i.e. the government did NOT decide to absorb more of the bank debt into its national debt because the ratings agencies downgraded Eire!

The fall guys are the banks as you say but the problem lies not with ratings agencies but with the governments. Banks did not create unsustainable national debts hundreds of times larger than the pinpricks borrowed to bail banks recently.

The vast national debts plaguing the West are solely the prerogative of governments and the voters who chose to select the politicians that comprise them. You want fall guys? Look in the mirror Mr and Mrs Voter.

50. At 16:27pm on 17th Dec 2010, Dempster wrote:
You’d have to go to the website (https://www.positivemoney.org.uk/ ) to read it.
======================================
Yes, I had read it before but missed where they say that the BofE will print money to replace that tied up in the banks, a big improvement!

70. At 17:47pm on 17th Dec 2010, pkr1771 wrote:

UK citizens would struggle to hold down a full-time job in the UK and claim non-dom status.
==============================================================

What do you base this statement on?

Non-domiciled status does not relate to your citizenship, your place of residence, or where you are employed. I worked in the taxation field for 30+ years, so I actually know what I'm talking about.

As regards citizenship, very large numbers of those working in the financial sector in London are not UK citizens anyway. Why did you think they would be?

Your figure of 51% of bonuses reaching the exchequer as tax is simply nonsense. I doubt if the true figure reaches 25%.

@70 said -The individuals whose decisions led to the banks failing must go, if they haven't already-

Go where? Another bank in Switzerland? Or should they just slink off somewhere? Do we know who they are? Doesn't it need some sort of inquiry to establish who's "guilty" and who isn't? Doesn't it need to be published... Oops , sorry I'm getting into the realms of fantasy now.

I don't think it's anywhere near good enough that those responsible for the national banking disaster are simply required to "go".

I suspect the subject of bonuses is craftily engineered to keep Joe Public away from the real issues in the banking and monetary systems. I don't really care how much someone is paid - as long as they don't screw things up on a national scale.

71. At 17:56pm on 17th Dec 2010, Paul J Weighell wrote:

Do I spot a logical inconsistency here? You say:

"The agencies downgraded Eire debt because the government decided to absorb more of the private bank debt into national debt making government default more likely".

Your very next sentence:
"Banks did not create unsustainable national debts hundreds of times larger than the pinpricks borrowed to bail banks recently".

In the case of Ireland, the state has underwritten all private bank debt. That is a bail out of the banks, and is why the state is bust.

You say "The fall guys are the banks ". Sorry, but the fall guys here are the Irish taxpayers, who are being comprehensively screwed, not for their own sins, which are many, no doubt, but for the idiotic mismanagement of the banks.

71. At 17:56pm on 17th Dec 2010, Paul J Weighell wrote:
“63. At 17:09pm on 17th Dec 2010, TonyH wrote: Think yesterday's downgrade of Ireland's credit rating! Whose expert opinion has determined the economic fate of thousands - the Rating Agencies!”

and:-

'The vast national debts plaguing the West are solely the prerogative of governments and the voters who chose to select the politicians that comprise them. You want fall guys? Look in the mirror Mr and Mrs Voter.'

====================================================

Our banks are sick because they consumed the poison dished out by the Rating Agencies.

National debts have nothing to do with it - that's a smokescreen!

The banks were dumb enough to fall for the story and that's why taxpayers are bailing them out.

I don't like it when my pocket is picked!

74. At 18:54pm on 17th Dec 2010, The-itinerant-ex-pat wrote:

"Go where? Another bank in Switzerland? Or should they just slink off somewhere? Do we know who they are?"

============

Partly right.There probably is a bit of a merry-go-round but I you'd hope that word would get out if you lose a load of money and no-one will touch you any more.

Alot of them will just go and do something else - nothing to do with banking. Perhaps they feel that nature has told them something.

Just to scare you though, after the 2007 credit crisis there was a massive surge in ex-finance people applying to become school teachers. On one hand it must be a good thing that more people are available to teach the next generation. On the other, these are the people who, together with Gordon and friends, helped stuff the kids' future.

73. At 18:49pm on 17th Dec 2010, haufdeed wrote:


==============================================================

"Non-domiciled status does not relate to your citizenship, your place of residence, or where you are employed. I worked in the taxation field for 30+ years, so I actually know what I'm talking about."

"What do you base this statement on?"



I don't pretend to have your experience in taxation and won't argue the on how to get no-dom status. I guess all I can base this on is how difficult or inconvenient it would be for me personally to change my status. Tell me if I'm wrong but, as a UK citizen I surely can't just elect to pay tax elsewhere. There must be rules that I'd have to follow such maximum number of days I can visit the UK? Those of us who work 9-5 Mon-Fri can't just do that. Again, at the risk of using an ill-informed example, isn't Lewis Hamilton restricted on how many days he can visit the UK since he became domiciled in Switzerland for tax?

=============
"As regards citizenship, very large numbers of those working in the financial sector in London are not UK citizens anyway. Why did you think they would be?"

I know alot of City people are not Uk citizens. I was talking about those who are and that I don't think (again I accept this is your area of expertise, not mine) that it would be easy for them to move to non-dom status. If it's that easy then why don't more of us do it?

Without data to support me I would say that the majority of people working in London are UK citizens. Hopefully, there are UK people working in NY, HK, etc. although I doubt whether they would then pay tax at home like US citizens have to do. Do they have to pay tax on any earnings they re-patriate to the UK?

=======

"Your figure of 51% of bonuses reaching the exchequer as tax is simply nonsense. I doubt if the true figure reaches 25%."

Clearly neither of us know the precise answer on this one. I'll accept that overall it'll be less than 51% but that is the figure that applies to the majority (I presume) who are UK tax-domiciled citizens. I guess this is why the Treasury is looking at extending Alistair Darlings One-Off Bonus tax because that hit the bonus pool itself.
=======

73. At 18:49pm on 17th Dec 2010, haufdeed wrote:

"As regards citizenship, very large numbers of those working in the financial sector in London are not UK citizens anyway"

One additional question for you (if you don't mind). Do EU citizens working in the UK have to pay UK taxes? Can you be from another EU country and remain domiciled for tax at home? (sorry that's two questions).

78. At 19:47pm on 17th Dec 2010, pkr1771 wrote:


Just like most people, you confuse citizenship, residence, and domicile. Lewis Hamilton is, I suppose, a UK citizen, who is domiciled in the UK, but resident in Switzerland (or wherever). As you correctly say, there is a limit to how much time he can spend in the UK without losing his non resident tax status. Citizenship really has little to do with it.

Domicile is totally different. It is a fascinating legal concept, and is still the biggest hole in the UK tax system for those with pots of money. Believe it or not, it is quite possible for a UK citizen, born in the UK, to have, or even acquire foreign domicile. You can spend as much time as you like in the UK and not lose your non-domiciled status. If you are ever in line for a multi-million pound bonus, it would be well worth your while seeking advice on the subject, preferably well before pay-day. The government could of course close this loophole tomorrow, if they wanted, but I assure you that they won't.

Nulabour made a pathetic, half-hearted effort at reform in this area, which did not really affect the super rich in any meaningful way.

So please don't delude yourself that a large percentage of these superbonuses is coming back to us via tax- that is simply not the case.

79. At 20:08pm on 17th Dec 2010, pkr1771 wrote:

One additional question for you (if you don't mind). Do EU citizens working in the UK have to pay UK taxes? Can you be from another EU country and remain domiciled for tax at home? (sorry that's two questions).
=============================================================
An EU citizen living and working full time in the UK will be resident in the UK for tax purposes, but generally non-domiciled.

For an Italian waiter, for example,earning less than 30k, his/her domicile status will in reality make no difference, he/she isn't earning enough to make it worthwhile to exploit non-domiciled status. For an Italian investment banker in London, earning over a million, it is extremely worthwhile setting up his/her contracts so that he/she is paid by an offshore entity, and keeps the bulk of his/her income offshore. Of course it is actually more complex than that, but not much. The banks will be happy to assist in such arrangements, in my experience.

Before the complaints begin, I am not stereotyping Italians, the waiter/banker could be Polish, French, or whatever! Anyway, I hope this helps.

Thanks haufeed for the excellent explanations. Happy to have been set straight on these points.

I'd still like to maintain that we all benefit from bonus payments - just that they'd benefit us all even more if HMG decided to collect the taxes fully.

The argument that the Banks are finding it difficult to contribute to the economy (by restaining bonuses or increasing lending to small businesses) because the Government is criticising them for excessive bonuses and not lending enough is manifestly specious.

If it amounted to an offer to reduce bonuses and lend more, then they could do that and the Government would no longer have a grievance. It is obvious that they have no intention of doing either.

So what is the real story? It seems likely that the bansk are going to need more Government support next year, anfd maybe they're trying to talk down the price? Maybe the threat of moving abroad is enough to leverage more money out of the Government: or maybe they could threaten to precipiate and orchestrate a run on the pound in new year.

Whatever they're doing, I just don't believe that they're so stung by the Government's criticism that they're refusing to lend: and if they are then they're to childish to be allowed to run the shop!

It will be the same old story.Tough talk by a bunch of pansies but no real change.Anything these corrupt bankers lose as a result of government "action"will be quickly re-imbursed by other means.They sold out our industry for the sake of easy money in Banking and its all we got so they get away with it continuosly.

On the first day of Christmas, my banker gave to me, a mortgage on my proper-ty (+15% cashback),
On the second day of Christmas, my banker gave to me, two credit cards and...
On the third day of Christmas, my banker gave to me, three private pension funds, two..
On the fourth day of Christmas, my banker gave to me, four CDOs, three...
On the fifth day of Christmas, my banker gave to me, five Gold shorts, four CDOs...
On the sixth day of Christmas, my banker gave to me, six months deposit (at a rate below inflation), five Gold shorts..
On the seventh day of Christmas, my banker gave to me, seven other ways of saving (all below inflation), six months deposit (at a rate..)..
On the eighth day of Christmas, my banker gave to me, the bubble market, seven other ways...
On the ninth day of Christmas, my banker gave to me, one market meltdown, the bubble market...
On the tenth day of Christmas, my banker gave to me, "quantitative easing", one market meltdown...
On the eleventh day of Christmas, my banker gave to me, sovereign debt crisis, "quantitative easing"....
On the twelfth day of Christmas, my banker gave to me, inflation, recession and spiralling costs of repayment against the cost of borrowing however by this time I had worked out that he hadn't actually given me anything at all but a legacy of debt to be handed down to future generations whilst walking away with impunity and paying himself a 'bonus' for orchestrating or at the very least acquiescing to such a colossal (and criminal) theft from the hard working taxpayers of the world. Then I stopped believing in Christmas.... it's only for people who can afford it.

I wish all my friends, a very happy, corporate, Christmas.

NOT.

I work for a main UK bank dealing at SME level. What I think people fail to realise is that when the media frenzy refer to us as "The Banks" earning huge bonuses, the reality is far different.

Before you say: - "no silly, boy - we don't mean you and your colleagues!” the situation is that we are all affected as staff by this UK obsession in bringing the banks into shape for our wrong doings back in 2008. I suppose it keeps MP's out of the limelight for expenses, coalliton "in fighting", etc!

Firstly - we all know previous lending was reckless and in some cases very wrong and there are no excuses for the past mistakes. However, we are past that now and if you look at the main core of the major banks in the SME and Corporate Markets, you can clearly see that these operate sensible lending policies and is usually profit making divisions that are currently open for business.

What I am trying to say is that if you leave us alone to recover, operate in an entrepreneurial way, whilst providing facilities to customers, without taking unnecessary risks, then why is paying us the bonuses or salaries that we are due is such a dirty word?

If this snowball continues, picking on "The Banks" (as it is so loosely put) will only make the situation worsen. Good staff continuing to leave banking altogether or going elsewhere. So what? Who cares about the staff at greedy banks with just their bonuses in mind? Look deeper, has your bank manager changed 5 times already in the last 2 years? Do you get the same level of service you always did when you ring customer services or want a loan? Is it getting more like ringing a Government run Department such as the Inland Revenue every time you need to speak to someone?

Banks have cut their staff in half as a rule of thumb recently and deferred or stopped bonuses to normal, hard working people with families and a mortgage to pay. SME's operate salaried and bonus related schemes and they too are recovering from a true and deep recession. Only difference here is that they have not been bailed out by the Government, but you and I know that had to happen - major banks cannot go bust; it would have had profound consequences for all of us.

I can't help but think that the media and government see us as an easy target for news and career progression in constantly attacking previous, rotten elements. If we want to grow the economy then go and find the next unfortunate target to focus your attention on such as Rail Chiefs or BAA and their profits vs. people stuck in the snow, it will have less impact on us all in the future!

Tommy Jumper:

At 13:06pm on 17th Dec 2010, Kit Green wrote:
Time to do an Ireland and tell them who is boss.
(Who is by the way?)

It`s the Taxpayers, considering the ammount we bailed them out with!
So tell the Banks who`s Boss!