Bankers "need to join real world" minister says

[beorhthelm]

I have a whole lot of sympathy for those that come on here and feel aggrieved by the City and what it has contributed to the country's economic woes.

i dont. i dont recall anyone complaining about the money they brought in that drove economic boom for the past 10 years. i dont recall anyone asking where the government was getting all the borrowing from to fund all Labours pet projects that couldnt actually be afforded by income that year. funny how the MPs now find it all so repulsive, while last spring many where found to have their own fingers in the till. Deflecting attention?

also funny how people forget that if RBS Investment wing has made £6 billion in profit, then the treasury has a couple of billion tax, or that of the £1.5 billion bonus pot, at least another 20% will be going to treasury.

 

[ROSM]

Okay I'll declare my hand here.

As one of these 'bankers' (22 years working for a retail bank) I have moved from branch banking into project, product, process and system roles. Prior to the 'collapse' I was working on the very self regulation that meant that peoples performance was based on a balance of targets and measures which refelct risk management, income, people management etc. It's not unique and many companies do this although it was quite rare in the banking industry.

The main basis being that people are paid based on this measure of performance. There is a base salary, benefits (health care) which are generally blanket based with minimal discretion and then there is the variable element. This model is not uncommon amongst the banking industry. that discretion can be rewarded in cash, shares, deferred payments etc. The intenion being to balance retention of employees (lock in) and immediate reward.

My salary is approx 10% less than I can get in the public sector. Some years on top of this I get no bonus, some I get shares and some I get a mix. It's my choice and I take the 'risk'. Some of my shares bonuses havn't vested as the company hasn't met the targets applied or the share price has been too low to gain.

So the real question with RBS and what the government needs to get round is:

What is the performance of these individuals and how was it assessed. And then they need to understand how these bonuses are being paid.

If on balance they are high performers and the bonuses are being paid as shares (which as we all know can go down as well as up) then it's completely different from the model that the media portray of fat cat bankers wheeling large barrows of cash.

Also for the 95% of bank employees who are on similar schemes to me, where does this correlate to that media image.

And finally, just assuming there are banks who have put in place self regulation and processes, didn't ask for government money and are rewarding their shareholders (largely your pension schemes), to what degree do you think that an employee who has implemented processes to protect that position should be rewarded?

 

[Dandyman]

Those railwaymen and postal workers don't have skills that are transferable and in high demand though, do they? Your comparison is poor.

The point was about morality not the working of the labour market.

The financial sector employs about a million people and contributes around to about 9% of GDP. It actually therefore contributes less than manufacturing or the wider service sector.

 

[Dick Knights Mumm]

I have no knowledge of the banking market - but from the outside it seems to me the problem is short-termism. If bonuses are based on short-term performance - and that leads to long-term collapse - then there is a problem.

 

[User removed 4]

The point was about morality not the working of the labour market.

why is it that its always the people in cushy but non wealth generating jobs who bang on about morality ? You're just like the ugly fat harridans who are constantly carping about page 3 girls being demeaning to women.

 

[Lokki 7]

How are those not directly involved supposed to understand how it all works and who is to blame. If the FSA doesn't understand how the hell is anyone else.

This is exactly the problem. Well put. Unfortunately there is no simple answer and politicians are being swayed by the public outrage and the need to be re-elected.

 

[ROSM]

I have no knowledge of the banking market - but from the outside it seems to me the problem is short-termism. If bonuses are based on short-term performance - and that leads to long-term collapse - then there is a problem.

spot on

 

[eastlondonseagull]

The banks have been bailed out by taxpayers' money. Yet when these very same taxpayers require a mortgage, the bankers shut the door in your face. Wankers.

So much taxpayers' money has been spent bailing out the banks, that each and every one of us - including our kids - has 'paid' £14,000 to shore up the banks. So, Mr NatWest manager, I'd like my £42,000 back now, please. Or you can add it to the deposit I'm trying to save in order to get back on the housing ladder.

 

[ROSM]

This is exactly the problem. Well put. Unfortunately there is no simple answer and politicians are being swayed by the public outrage and the need to be re-elected.

I've been party to some interesting meetings with Global regulators over the last few years.I wouldn't expect the Bank of England solely or the Government to be any better. We brits may not like the FSA but it needs to be improved, not removed

 

[Monsieur Le Plonk]

I've been party to some interesting meetings with Global regulators over the last few years.I wouldn't expect the Bank of England solely or the Government to be any better. We brits may not like the FSA but it needs to be improved, not removed

Sure it needs to be improved....but not yet. It actually needs to turn a blind eye to the whole thing and let the billions roll into the coffers. When it does end up getting reformed it must be on a global basis as someone has already mentioned.

 

[Southover Street Seagull]

Those railwaymen and postal workers don't have skills that are transferable and in high demand though, do they? Your comparison is poor.

Are you saying I'm not skilful?

 

[Southover Street Seagull]

Sure it needs to be improved....but not yet. It actually needs to turn a blind eye to the whole thing and let the billions roll into the coffers. When it does end up getting reformed it must be on a global basis as someone has already mentioned.

From my limited knowledge on this subject you cannot reform banking on a global basis as there is never any worldwide agreement as to how banking should be reformed.

 

[User removed 4]

Are you saying I'm not skilful?

no hes not mate, wasnt there a case relatively recently where thameslink poached a load of drivers from southern or vice versa ??

 

[Buzzer]

Are you saying I'm not skilful?

Of course I'm not. And you know I back the posties.

 

[Southover Street Seagull]

no hes not mate, wasnt there a case relatively recently where thameslink poached a load of drivers from southern or vice versa ??

I am being slightly sarcastic, I wish my skills in Royal Mail were in such demand as these high flying bankers!
Not sure about the poaching but I know First Capital Connect have bought a load of Southern trains and are now training their drivers on them, due to this there is plenty of overtime to work on the trains in the week to cover the training. But the FCC drivers are not doing this as I believe they are negotiating a new pay deal at the moment.
Just like the people at RBS they are dealing from a position of strength!

 

[Southover Street Seagull]

Of course I'm not. And you know I back the posties.

Tongue in cheek my good man, tongue firmly in the cheek!

 

[User removed 4]

I am being slightly sarcastic, I wish my skills in Royal Mail were in such demand as these high flying bankers!
Not sure about the poaching but I know First Capital Connect have bought a load of Southern trains and are now training their drivers on them, due to this there is plenty of overtime to work on the trains in the week to cover the training. But the FCC drivers are not doing this as I believe they are negotiating a new pay deal at the moment.
Just like the people at RBS they are dealing from a position of strength!

just slightly off topic, did you see bob crow on have i got news for you the other week ? he got spectacularly ruined by hislop and jimmy carr , he really wasnt sharp enough to be on there.

 

[Buzzer]

From my limited knowledge on this subject you cannot reform banking on a global basis as there is never any worldwide agreement as to how banking should be reformed.

If, and it's a massive if, there's universal will to do it then it can happen. Take for instance money-laundering. All major countries have tightened up with regard to taking money from terrorists and gangsters. In turn the peripheral banking nations have had to take note of this and bit by bit it's getting more difficult for the baddies to move their dosh.

I know the analogy is flawed but it will need the full co-operation of the G7/G8 (whatever the number is nowadays) and esp London, Frankfurt, Tokyo and New York to come up with something that's equitable. And I'm guessing that there's really not the willingness to be the first country to impose restrictions and lose out.

 

[Monsieur Le Plonk]

From my limited knowledge on this subject you cannot reform banking on a global basis as there is never any worldwide agreement as to how banking should be reformed.

..and there lies the whole problem. If we regulate it will be in isolation and any power or influence that the City has will diminish almost overnight. Neither the Tories or Labour would be ignorant enough to let that happen and by the same token neither party has the influence over the USA to make them play ball.
Funnily enough Sarkozy's statement of intent to regulate the City will play into our politicians hands and give them a populist reason to reject any change pushed upon us by a bitter country that lost all it's financial power a decade ago.

 

[Tooting Gull]

The moral of the story is dont just blindly jump on the outrage bus until you know what the f*** you're talking about.

Or another moral of the story could be not to bale them out in the first place, then the govt wouldn't be left holding worthless stock.

I'd call their bluff. A few would go, most wouldn't, and maybe we could re-evaluate what is actually important in life and put people to work there. The obsession with financial institutions in this country is unhealthy.

As El Pres spelled out earlier, the model is no-lose, and the reward-for-failure culture a disgrace. Any other smaller business in the country is looking at the banks thinking 'If I screw up, I lose my livelihood and possibly my house.'