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EDITOR’S TAKE: No, banks are not free to pay big bonuses

When I wrote something last month saying that banks will pay large bonuses at their peril this year, someone said this wasn’t so and that banks have no need to consider the opinion of the general population.

Events of this week suggest that that someone was wrong.

After allegedly suggesting late last week that bonuses in 2009 will enormous, on Monday Goldman felt the need to deny that it said any such thing.

Meanwhile, there has been public disapprobation over Hester’s pay deal at RBS, the Guardian is asking searching questions like, ‘Is the gravy train back?’, and the currently impotent Mervyn King is expressing disappointment at the apparent return to bonuses as usual.

Do banks care? They should. The UK faces a soaring budget deficit and an election within the next 12 months. The payment of big bonuses in 2009 will be an invitation to further increase income taxes. It will also reduce public support for the City at precisely the time when the government needs encouragement to protect the financial services industry from over-zealous European regulation.

Big bonuses now may mean much smaller bonuses forever after.

Comments (7)

Comments
  1. nonsense, sorry.

  2. So what is your point ?
    Big bonuses and small d*ck who cares

  3. Folks, Folk folks…. Personally, I don’t care about the banks. They were all bailed out directly or indirectly cue AIG paying out on CDSes. What I do care about is the proposed forthcoming regulation of HFs…. That could make people rethink working in the industry cos no one is in this game for the love of it.

    ps: I personally think it would be foolhardy for the house of Sachs to splurge out…..!

    Mr. Frank White Reply
     
  4. Mervyn’s impotent? Well i’ll have you know “efinancialcareers”, though we are old, we are still enjoying a very fulfilling sex life.

    Mrs Mervyn King Reply
     
  5. When inflation hits high single digits in the coming years (so the Government can inflate their way out of this huge debt mounain), bonuses are going to need to be bigger to keep up……or will the last one out pls switch off the lights

  6. @Charlie Brown
    junk post
    you think bonus levels are sensitive to price inflation moves?

  7. Everyone’s overpaid but me.

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