Government backs off banks

[Sticks.]

otolith said:

Just walk us through what investments you think people lost money on, and how the bank making more profit will compensate them.

Oh I forgot, on PH no one lost any money. Guess my investment statements are wrong then. Thanks, I feel much better.

All this stuff about it's in my contract, and you're so lucky I earn so much because I pay more tax is surreal. It sounds like the trade union controlled industries of the 70s who had ridiculously large packages, couldn't possibly change the way things were, it's always been like that, the industry is nothing without us, the industry can't fail, it's too important to the govt. Can almost hear Red Robbo again now.

People voted for Thatcher becuase they were p'd off with it. Just as then, at some point new companies will come along and rewrite the rules, and provide the same services for less because they don't pay the oversized bonuses.

Pity no one in govt has the determination Thatcher had.

[eyebeebe]

Marf said:

eyebeebe said:

neilr said:

HOWEVER, institutions that had to take government bailouts are IMO not entitled to slap eachother ont heback and hand out bonuses until they've repaid the amount used to bail them out.

I posed the (loaded, because I know the answer) question below on another thread. No one answered it. Perhaps you'd be so bold...

eyebeebe said:

Serious question - how much money was lent to the banks? Backed up by a reliable source if possible, so that rules out the majority of the mainstream British media!

I thought that the government/tax payer had taken equity in the form of shares and preference shares and also underwritten some banks' liabilities in return for quite a handsome fee. I wasn't aware that there had been any loans made or bonds issued- in the sense of principal and interest to be repaid. Therefore any cash to be returned to the government/taxpayers will actually be made by market participants when the government sells their holdings, rather than the banks themselves.

We have bought stakes in RBS, HBOS/Lloyds et al through equity, not debt. There is nothing to be "repaid", only shares held by a state entity which can be sold at an opportune time hopefully at a healthy return on investment.

It is a common misnomer that the banks we own were purchased through debt and that they "owe us money", though that said there were loans made to some institutions, which have been repaid I believe.

All that aside, neilr's point is valid, the banks we own will likely not return to the bonus levels they want until the government is no longer their majority shareholder.

Edited by Marf on Tuesday 11th January 19:04

Is the correct answer of course, but I'd still like someone who says that the banks need to pay back taxpayers the loans that were made, before they can do x,y,z to show me evidence that loans were made in the first place. As you say there is a complete lack of understanding of what actually happened and the majority of the mainstream media are perpetuating it to sell papers.

Wrt your final point I suspect RBS and co will be "back-markers" on compensation until around six months before the next GE... Unfortunately for the British taxpayer, the option that would give them the best return in the long-run, is the politically unpalatable option of letting banks pay what they want without interference.

[eccles]

ukwill said:

Did anyone watch the BBC Parliament this afternoon - Johnson had called the Chancellor in for an "urgent question".

Johnson probably wished he hadn't. Osborne totally demolished him - and in fact, demolished all the Labour MPs questions. Was probably his best performance yet.

nutshell:
Labour's contract with RBS had no stipulation regarding Bonus payments for this year. They said to RBS that this year, they could pay market rates. This is the reason RBS are paying out healthy bonuses this year. There's fk all the Govt can do about it. However the govt has said nothing is off the table.

Furthermore, it turns out that over the past 13 yrs only 25 firms had signed up to the Govts code of conduct. Since Jan 1st, that figre is now 2500. (I was shocked to hear that).

Blears (yep she's still there!) questioned Osborne about the size of the bank bonuses. Osborne's riposte was "when you were a member of the Cabinet, bonuses were £11.5 billion..."

lots more but it was bloody good.

Radio 4 was quite amusing this evening, it played about 2 mins worth of quotes by the bunch of idiots that are in at the moment saying what they were going to do with the bankers when they were in power....... didn't half sound hollow now!

[turbobloke]

It's really not so good for Liarbore if a hollow facsimile of what was said in opposition is still more than they managed - as per The Boy George's reply to that hideous harridan regarding what bonuses were when she was shockingly bad enough to be in 'government'.

Even so, government should keep out of remuneration matters that are purely contractual in nature and involve people other than those in post at the time of Liarbore's ineffective tripartite framework.

[otolith]

Sticks. said:

otolith said:

Just walk us through what investments you think people lost money on, and how the bank making more profit will compensate them.

Oh I forgot, on PH no one lost any money. Guess my investment statements are wrong then. Thanks, I feel much better.

No, not what I was getting at - your investments, shares in the banks are they?

[thinfourth2]

crankedup said:

thinfourth2 said:

The governement should bring a tax of 95% on all bankers cash bonuses.

That will keep the proles happy


And if the bankers don't get paid in cash the bankers should be happy also

Thought that the larger bonus payments were paid in cash and shares, at least for the higher payments?

So the bankers get their bonus

The proles get the supertax

Evryones happier and nothing has actually changed

[Sticks.]

otolith said:

Sticks. said:

otolith said:

Just walk us through what investments you think people lost money on, and how the bank making more profit will compensate them.

Oh I forgot, on PH no one lost any money. Guess my investment statements are wrong then. Thanks, I feel much better.

No, not what I was getting at - your investments, shares in the banks are they?

Sorry. What were you getting at?

[shauniebabes]

Bing o said:

Who cares what the proles think? The banks have done at least as well under Labour as they did the Tories, and no-one will shoot the golden goose.

As said, it's 50% to the treasury, so it's win win.

A banker lost control of his car last week causing several thousand pounds worth of damage to public property. The Government decided to let him keep driving, rather than lose the road tax. In fact they even lent him the money for a new car.

[otolith]

Sticks. said:

otolith said:

Sticks. said:

otolith said:

Just walk us through what investments you think people lost money on, and how the bank making more profit will compensate them.

Oh I forgot, on PH no one lost any money. Guess my investment statements are wrong then. Thanks, I feel much better.

No, not what I was getting at - your investments, shares in the banks are they?

Sorry. What were you getting at?

How exactly the banks making a bigger profit would benefit people who had lost money on their investments, given that most of them did not have investments in the banks but investments originated or administered by them.

[Marf]

eyebeebe said:

Is the correct answer of course, but I'd still like someone who says that the banks need to pay back taxpayers the loans that were made, before they can do x,y,z to show me evidence that loans were made in the first place. As you say there is a complete lack of understanding of what actually happened and the majority of the mainstream media are perpetuating it to sell papers.

Wrt your final point I suspect RBS and co will be "back-markers" on compensation until around six months before the next GE... Unfortunately for the British taxpayer, the option that would give them the best return in the long-run, is the politically unpalatable option of letting banks pay what they want without interference.

Agree with everything you say. Not only are the media perpetuating it, but I find people are wilfully ignorant of the details. They'd rather throw anger at "the bankers" than spend a couple of minutes trying to understand the situation in context.

[Beardy10]

Ali G said:

Beardy10 said:

The fact is the Govt had the banks where they wanted them when they bailed them out....at that stage they could have changed the way the industry was paid as they literally had all the power. Except they didn't...they wrote a cheque to the industry with no strings attached.....Brown did it here and Bush did it in the US.

Except that they did not bail out Barclays or HSBC so did not have any chance of influencing the management in those organisations.

With due respect that's a common misconception....by bailing out the banks they did they effectively also definitely bailed out Barclays and HSBC would probably have played ball to some extent (they pay lower bonuses anyway). It's pretty well known that Barclays were in a whole heap of trouble but they had a much stronger management team and I would say were a bit more creative in their accounting.....there's is absolutely no way Barclays would have survived if RBS had gone bust. Also all the banks were being funded by the BoE to a much greater extent than the market was aware at the time...so they had leverage through that as well.

[BMWBen]

I'm getting quite sick of this now.

The press seems unable to print the actual facts about what has happened over the last couple of years. In today's standard there was a whole editorial full of vitriolic bks most of which was basically incorrect.

The people who are most angry about the whole thing are the ones who have the least idea about what's actually going on.

Despite every shouting "WE HAVE TO FIX THIS", nobody has come up with a way of doing so that wouldn't give Stalin a woody and is actually based in some kind of scenario that is close to reality.

The same mongs, who say "screw the bankers, we don't need them, anyone can do it", should have a watch of the Bob Diamond questioning. Very very few people in this world are capable of doing his job. VERY FEW. That is why people like him are paid so much. If you're not capable of it, fking get over it.

This has descended into confused ranting now so I'll stop.

P.s. I work at a bank, but I'm not a banker. I would never be one, because for me, the lifestyle is not worth the money. Yes, I said that, and it's true for the majority of the intelligent population who could perhaps have a chance of making it big in a bank.

[Silver]

BMWBen said:

I'm getting quite sick of this now.

The press seems unable to print the actual facts about what has happened over the last couple of years. In today's standard there was a whole editorial full of vitriolic bks most of which was basically incorrect.

The people who are most angry about the whole thing are the ones who have the least idea about what's actually going on.

Despite every shouting "WE HAVE TO FIX THIS", nobody has come up with a way of doing so that wouldn't give Stalin a woody and is actually based in some kind of scenario that is close to reality.

The same mongs, who say "screw the bankers, we don't need them, anyone can do it", should have a watch of the Bob Diamond questioning. Very very few people in this world are capable of doing his job. VERY FEW. That is why people like him are paid so much. If you're not capable of it, fking get over it.

This has descended into confused ranting now so I'll stop.

P.s. I work at a bank, but I'm not a banker. I would never be one, because for me, the lifestyle is not worth the money. Yes, I said that, and it's true for the majority of the intelligent population who could perhaps have a chance of making it big in a bank.

This is spot on.

[BMWBen]

Silver said:

BMWBen said:

I'm getting quite sick of this now.

The press seems unable to print the actual facts about what has happened over the last couple of years. In today's standard there was a whole editorial full of vitriolic bks most of which was basically incorrect.

The people who are most angry about the whole thing are the ones who have the least idea about what's actually going on.

Despite every shouting "WE HAVE TO FIX THIS", nobody has come up with a way of doing so that wouldn't give Stalin a woody and is actually based in some kind of scenario that is close to reality.

The same mongs, who say "screw the bankers, we don't need them, anyone can do it", should have a watch of the Bob Diamond questioning. Very very few people in this world are capable of doing his job. VERY FEW. That is why people like him are paid so much. If you're not capable of it, fking get over it.

This has descended into confused ranting now so I'll stop.

P.s. I work at a bank, but I'm not a banker. I would never be one, because for me, the lifestyle is not worth the money. Yes, I said that, and it's true for the majority of the intelligent population who could perhaps have a chance of making it big in a bank.

This is spot on.

It was entirely prompted by the Evening Standard on the way home. Several pages of junk, which was either: completely untrue and twisted, or, a postulation based on previous untrue and twisted statements which even had the previous statements not been untrue and twisted, would still be ridiculous.

[Sticks.]

You may well be right about the detail, it's probably as accurately reported as pub sec pensions. But to the general public the 'bankers' issue makes the govt's assertion that 'we're all in his together' look shallow at best.

That's why the govt needs to show it's doing something to level the playing field. If it tackles the benefit scroungers because it's not fair, and pub sec payouts because it's not fair, but leaves the banking industry alone, despite the public's perception that it's unfair, it will be seen as weak. The same old Tories, the electorate will say, looking after their mates, while the rest of us pay.

There's certainly a lot of tough cuts to come, and for the public to accept those the govt needs to show we are in this all together, otherwise it won't get re-elected.

Then where will we be?

[Lardydah]

Who cares what size bonuses bankers and people that work in banks are due to be paid?

Why are we concentrating on the select few who are getting bonuses, which is probably due to the fact they've work 60 hour weeks for the majority of their working lives and put a lot of effort in at school + university. As has been previously said 50% of the total will be going to UK PLC, then you forget all the nice things they will buy that will incur VAT, all the restaurants they eat at that will profit (and in turn pay tax and pay staff, who will probably pay tax) etc etc.

The UK is spending ~180 BILLION £ a year on welfare, I have know idea how many people are on JSA but I bet it's a large multiple of the number of people receiving bonuses. I remember not long ago there was an alarming statistic that something like ~1million people had been on JSA for 9 of the last 10 years (don't quote me on that).

How are they any more deserving than the evil bankers?

Personally I know which group I'd rather be larger in the UK...

[munky]

On a technical point there were emergency loans made
http://www.telegraph.co.uk/finance/newsbysector/ba...
but that is not the "bailout" as we know it now which is in pref shares, which of course rank higher than ord shares and unlike ord shares pay a fixed, mandatory dividend to the taxpayer.

I remember at the time (during the crisis, after NR but before the HBOS & RBS loans above) there was some panic in the markets as talk of an emergency loan to HSBC or Barclays circulated, turned out there was such a loan but only because of a tech glitch in a payments system somewhere. This can happen at any time but in the middle of the crisis it caused undue panic and could have sparked a bank run... which is why they kept the RBS and HBOS loans secret

[BMWBen]

Sticks. said:

You may well be right about the detail, it's probably as accurately reported as pub sec pensions. But to the general public the 'bankers' issue makes the govt's assertion that 'we're all in his together' look shallow at best.

That's why the govt needs to show it's doing something to level the playing field. If it tackles the benefit scroungers because it's not fair, and pub sec payouts because it's not fair, but leaves the banking industry alone, despite the public's perception that it's unfair, it will be seen as weak. The same old Tories, the electorate will say, looking after their mates, while the rest of us pay.

There's certainly a lot of tough cuts to come, and for the public to accept those the govt needs to show we are in this all together, otherwise it won't get re-elected.

Then where will we be?

What I don't understand is why people think it's not fair. There is nothing stopping anyone from starting a career in banking. THere are plenty of people in banks who come from modest backgrounds.

If the entire intelligent population decided they wanted to become bankers the salaries and bonuses would tumble.

The fact is, it's a job that not that many people are capable of, and that even fewer actually want to do. At the same time it generates lots of money.

That makes for a very well paid job. If you want it, go get it.

Where does "unfair" come into it?

[Randy Winkman]

Shelsleyf2 said:

Can anyone tell me have the government done anything to ensure that in another 20 years when we have all forgotten this mess, we won't be bailing out the banks again?. I thought it was planned to distance high street banking from merchant and investment arms, giving the government the option of letting the speculators carry their own risk.

Jimmy

Did anyone reply to you?

[Pupp]

BMWBen said:

What I don't understand is why people think it's not fair. There is nothing stopping anyone from starting a career in banking. THere are plenty of people in banks who come from modest backgrounds.

If the entire intelligent population decided they wanted to become bankers the salaries and bonuses would tumble.

The fact is, it's a job that not that many people are capable of, and that even fewer actually want to do. At the same time it generates lots of money.

That makes for a very well paid job. If you want it, go get it.

Where does "unfair" come into it?

What struck me about this is that you could substitute pretty much any of the more technical public sector disciplines for 'banking' and 'bankers' and the same logic would apply but they're fair game for a hounding on the strength of being 'overpaid'. Except, of course, they don't get 6 figure bonuses; or any bonus at all...