“The days of big bonuses are over. One of the conditions of us helping the banks is that we will have to reach an agreement about their executive remuneration”
Gordon Brown, GMTV, 9th October 2008
Clearly Mr Brown forgot to "reach" that agreement with RBS, didn't he? Despite owning more than two thirds of the shares in the bank.
13 comments:
Prezza seems to have forgotten to mention his ministerial salary and cars which were retained when he ceased to be a minister. Still, he probably still had his mind on lunch, croquet or his next conquest.
A must watch on utube re Climategate
http://www.youtube.com/watch?v=lgIEQqLokL8&feature=player_embedded
Gordon Brown really is useless - he cannot manage something he effectively controls!
Er no. It was indeed agreed the government would have a veto. Hence the current complaints from the board. No one suggested the actual bonus levels would be fixed in advance.
It won't work. If you've made 100 million for RBS and Gordon says sorry you can't have your 10%. We're not content with 90% of the profits we want 100% of your profits, that person isn't going to hang arround long.
Long enough probably to transfer 10 million of the profits with some under performing trades with their next firm
Just another empty promise by Brown.
All depends on Brown's definition of 'big', doesn't it?
As far as I can see the taxpayers' contributions to the RBS coffers are not 'big' in Brown's view.
I wonder how Barclays will respond to this blanket announcement?
"Big bonuses are over are they? We'll see about that. How much did you lend us again?"
The problem is that the traders expect 10% of the upside and none of the downside.
These traders are playing the casino not just with their customers money but taxpayers money too, and as history has proven they don't even understand the markets they're trading. I wonder if they've wrote off all the worthless paper they're already holding before calculating their bonus pool?
The banks should be forced to raise their capital ratios, so they just can't keep throwing money at the traders, and the BOE should take back all responsibility from the inept FSA.
Long term they should work towards splitting the speculative trading away from the traditional stuff so that then can't hold the nation to ransom if they screw up again in the future.
Margaret Beckett implied on QT that these million dollar traders are all Eton Toffs, no one challenged the comment but I think they'll find a fair old mix of East End barrow boys among them - but of course Andrew Lansley would have been labelled a snob if he had mentioned that in front of the class warriors.
ILLIBERAL DEMOCRATS - the whole point of setting up the structure with UKFI was to stop political meddling in something that's too important to entrust to politicians.
There's a great thread here discussing this stuff, well worth a read even if you just search for the contributions from "avidya" who claims "I used to run a medium sized investment bank". Lots of good points made, but the key one is the age-old need for much better oversight of the people who make the money.
That was the problem at Barings as much as Leeson was, and it's always been a problem at the FSA, paying peanuts so they got monkeys who didn't know their CDOs from their P&Os. Thus this focus on remuneration is endangering the one thing that could get us out of this mess, and that's getting people in to positions of authority who actually understand this stuff. The trouble is that the very people who do understand it are the sort of people who don't want to be managers.
It's a tricky one. Regulating bonuses won't work until you can get the Yanks on side - which won't happen. It's possible that some kind of mechanism involving restrictions on how much of a bank's capital is exposed to certain asset classes might work, but you're going to get arbitrage round the edges and as we've seen, at RBS they were blindly denying they had any exposure to sub-prime until it was too late. Some kind of extreme transparency policy may be the only answer.
Bonuses are a side-issue. We desperately need to get banks working again, and for that to happen, we need them to make money. At the moment all our printing money is going into paying for Gordon's profligacy rather than going into the real economy, which is why we're still in recession.
This job was given by the useless Broon to the equally useless Myners. Yes that is the same one who was told to get rid of Fred the Shred. He in turn gave the job to the RBS board who thought this meant doubling Fred pension. So history repeats itself, Broon tells Myners to get the RBS back into profit, Myners passes the job onto Hester. Hester has no constaints with bonuses, but this does become a problem when he has contracted to give then and McIdiot says there will not be any. This reminds me of the keystone cops, except these clows cost us a vast amount of money.
This government can't even nationalise a bank. The biggest socialist wet dream of all and he mucked it.
This hands off control the government insists it operates. Is it like the 'Independent Bank of England' that Brown pretends is a reality?
Twig is correct - you would have thought that in the circumstances bankers (well lets be honest they are just a bunch of barrow boys) - would do their bit for the country. Just for a year or two.
And this at a time when our soldiers are getting their legs blown off in Afghanistan.
The tories proposed bonuses in shares - and as I recall Brown and labour decried it.
Meantime
Ben Bernanke, the head of the American Federal Reserve has said, Britain was ill-prepared to deal with the banking crisis in the wake of decisions made by Gordon Brown when he was chancellor.
he blames browns tri-partite system.
The testimony was before the Senate and presumably under oath.
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