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Monday, 26 October 2009

George Osborne on bank bonuses

"High Street banks should be banned from paying bonuses above about £2,000 in cash, the Conservatives have said."

So Georgie Boy jumps on the bandwagon, i assume part of the Tories' 'party of the poor' comedy routine.
But he seems to have learnt something from Gordy: the devil in the detail.
"stop retail banks - in other words the banks that lend directly to businesses and families - paying out profits in significant cash bonuses"
Interestingly, the retail banks aren't the ones paying the huge bonuses, nor, really, the ones who brought about the problems in the first place.
"It would only apply to High Street retail banks, which means investment banks would be exempt."


I'm glad he's finally coming round to the idea of getting money out there: ""We need to take emergency steps to support bank lending and move the economy forward this winter. The banks have to understand that we are all in this together.""
but he seems to think that all banks' money goes to the same place (he may be right) and therefore it's that easy to move money around the banking system and get lending out there. Though that is not necessarily the best way to go and can lead to long-term unsustainable debt (sounds familiar)
So that's me confused. Tough choices, wish it was me making them


Vince Cable shows it's easier to be critical than correct and agrees with me:
""They have not given full backing to [Bank of England governor] Mervyn King's proposals on splitting up the banks and these bonus proposals are short-term, stop-gap solutions designed to stem public anger but which fail to get to the heart of the problem." "

2 comments:

John said...

It is interesting that the amount of bonuses paid is a substantial fraction of the amount of money needed to re-capitalise the banks. See Bank bonuses.

Bearded Socialist said...

the key word is substantial. If a 'substantial' amount of the bail-out goes in bonuses to those who screwed up in the first place, that's wrong