Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:

Britain's highest-profile banker argued that it was not possible to stop paying bonuses without severe consequences for business and the broader banking sector.

(...)

"There was a period of remorse and apology; that period needs to be over. We need our banks willing to take risks, to be confident and to work with the private sector in the UK to create jobs and improve economic growth," he said at a hearing examining the retail banking sector.

FT


Wind power

by Jerome a Paris (etg@eurotrib.com) on Wed Jan 12th, 2011 at 03:57:53 AM EST
Because under a system where margin requirements are effectively enforced, bankers can pay each other all the bonuses they want without irritating public scrutiny of their remuneration.

Of course, there won't be as much easy money around to pay bonuses with...

But actually, the problem is convincing the central bank to do this. The retail banks can be bought simply by paying the policy rate on regulatory reserves as well as excess reserves. Do they deserve that subsidy? Arguably yes, since regulatory reserves arise when people deposit money (or keep borrowed money) in the bank. So the difference between the support rate and the retail rate would be the government subsidy for banks who manage the payment clearing infrastructure.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jan 12th, 2011 at 06:26:43 AM EST
[ Parent ]
"There was a period of remorse and apology; that period needs to be over. We need our banks willing to take risks, to be confident and to work with the private sector in the UK to create jobs and improve economic growth," he said at a hearing examining the retail banking sector.

After all, the politicians expect their contributions, don't they? Where do they think they come from?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jan 12th, 2011 at 09:11:57 AM EST
[ Parent ]
The European Commission agrees: EUROPA - Press Releases - Annual Growth Survey : Summary of the economic analysis and messages
Repairing the financial sector swiftly to find the path to recovery

There is a strong correlation between healthy credit expansion and sustained economic development. Balance sheet repair in the banking sector is essential to improve cost efficiency, restore competitiveness and return to normal lending. A swift exit from sizable public support to banks will remove possible distortions to competition in the financial industry. Furthermore, confidence in the banking sector is a prerequisite for maintaining financial stability. This is now being corrected through a more robust EU regulatory framework, a future permanent "European Stability Mechanism" to be established by 2013 to safeguard the financial stability of the euro area as whole, as well as tougher capital requirements on banks (Basel III agreement).



Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Wed Jan 12th, 2011 at 09:36:01 AM EST
[ Parent ]
There's one question I'd like to ask publicly - of Bob Diamond, for instance - "You've had all these millions in bonuses. What do you spend it on?"

You can't be me, I'm taken
by Sven Triloqvist on Wed Jan 12th, 2011 at 05:21:55 PM EST
[ Parent ]
The Big Boys, (capitalists), measure their power in accumulated wealth, so most of the money likely has been retained to buttress that power, and to provide "fuck you" money. I would guess that about 10-20% has been spent on political contributions to insure that the game continues and that about 5% has been spent on "charity" to provide PR cover.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Jan 14th, 2011 at 09:15:50 AM EST
[ Parent ]

Display:

Occasional Series