tag:blogger.com,1999:blog-9959776.post7566071986019970769..comments2024-02-15T04:42:41.606+00:00Comments on James' Empty Blog: Bankers "have learned lessons"James Annanhttp://www.blogger.com/profile/04318741813895533700noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-9959776.post-89154535001195321102009-11-11T15:15:21.595+00:002009-11-11T15:15:21.595+00:00No, what I am saying is, to plagiarise Thatcher, t...No, what I am saying is, to plagiarise Thatcher, there is no such thing as banks. The only thing with motives are bankers. It is not the banks that have to learn the lesson, it is the banks's directors. But their salaries too are boosted by bonuses, so it is in their interests for high bonuses to be paid, never mind the future. A bonus in the hand is worth two in the pension pot to be paid in twenty years. And in the case of the bank directors they get both!<br /><br />For the traders the bonus system is a bit like footballers wages. Each team is trying to buy success with ever higher and higher wages until the clubs go bust. It is what happens with a competitive society - a consequence of Thatcherism. <br /><br />The answer is a set of ground rules. Set a limit to bonuses for bankers and footballers. Or tax them at 90%. But we live in a global economy. The US is the main player and would refuse to sign up for dogmatic reasons. In their view such an idea would be considered socialism, one step from communism. Gordon Brown's idea of a global banker's tax got short shrift from Obama.<br /><br /> So I am saying that the bankers are correct when they say that in a free society without the bonuses the traders would go elsewhere. The only answer is to end this free society where people who pay or don't tax abroad are coming into our country and ripping us off. Free trade is fine for the richest countries, but we have been impoverished by those rip off merchants from the US and it is time we ended it, unilaterally if we must.<br /><br />The whole system is out of our control. We are pawns in the control of Rupert Murdoch, the American religious right, and the Chinese Communist Party :-(Alastairhttps://www.blogger.com/profile/15152292130415788120noreply@blogger.comtag:blogger.com,1999:blog-9959776.post-64739696757694627152009-11-10T21:38:09.761+00:002009-11-10T21:38:09.761+00:00Alastair, isn't that a problem of lack of cong...Alastair, isn't that a problem of lack of congruence of bank and bank employees goals? If the bank had the proper incentive to manage this problem then maybe longer term bonus systems would be put in place to get better goal congruence.<br /><br />As it is, the bank managers want to encourage reckless risk taking so they don't want to bother with such longer term bonus systems that could achieve better results for the taxpayer. Instead the managers prefer to stick to arguing that if we don't pay these bonuses the talent will go elsewhere. If that argument fails to convince government then they will come up with a different excuse.crandleshttps://www.blogger.com/profile/15181530527401007161noreply@blogger.comtag:blogger.com,1999:blog-9959776.post-33348050995234450762009-11-10T21:13:08.067+00:002009-11-10T21:13:08.067+00:00It is not really that their bank is too big to fai...It is not really that their bank is too big to fail that is the problem. It is that even if the bank goes bust they will still wallk away with last year's bonus and a healthy pension. They couldn't give a fig for the bank. They are only out to maximise their personal bottom line.Alastairhttps://www.blogger.com/profile/15152292130415788120noreply@blogger.com