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Is it morally wrong for banks to pay big bonuses this year?
Oct 6 2009
The government is looking to curb them as soon as possible, while banks want to pay the performers who bring in the profits, but is it morally wrong to pay big bonuses so soon after being bailed out from the brink of disaster?
Alistair Darling seems intent on ensuring bonus payouts are scaled back before the FSA proposals come into affect in 2010, and Lord Myners is meeting with international investment banks this week to try and convince them to toe the line.
But while onerous regulation is one way of clamping down on bonuses, both men are hoping that banks will feel morally compelled to scale back payments this year anyway.
"Yes, they can wait for legislation if they want. But I really think that some of them should show some common sense. They shouldn’t be paying this amount out in extravagant bonuses," said Darling last week at the Labour Party conference.
Meanwhile, in an interview with Financial News, Myners said: "There is no denying that issues around bonuses in particular are a source of considerable national anger and, whilst our banks continue to draw upon significant state support, either through funding or the implicit guarantee that banks have, then it seems odd for companies to be paying out very substantial bonuses or substantial dividends.”
So, the message is fairly clear – you can pay big bonuses this year, but should you? Bonuses have always been a part and parcel of banks' compensation practices, but is it morally correct that they're paid out in 2010?
Your thoughts please…
Does it matter what Dozy darling thinks? This socially and financially corrupt government is on its last legs. My concern is that Cameron may be too intent on becoming a Tony Blair reversal figure (i.e. Blue to washed out Red) and not recognise the serious issues that gratuitous regulation will cause.
DE 06 Oct 2009
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