When banks are under pressure not to pay bonuses or just to reduce the bonus levels what do you think will happen? I expect those at the bottom of the tree – administration and ancillary services staff – will be the ones to suffer. How long before we hear ‘We’ve cut bonuses this year by 50%’ sotto voce ‘by only paying the top people’? After all, they are the ‘skilled’ people they can’t afford to lose. What a disgrace.
And what of the latest idiocy to come from Government – blaming everything on bankers when it was they who put in place the state of affairs that led/allowed the banking behaviour to develop. Despite their greed I do have a little sympathy with the bankers when they say what they did wrong was fail to anticipate the scale of the collapse. They worked within the framework that existed in order to maximise profits. That’s what shareholders expect.
The fact is that government policy (low interest rates for far too long), regulatory conditions (lax rules and not enough policing) and the (entirely natural) greed of bankers led virtually everybody in the banking industry to participate in practices that ultimately led to our current situation. The fact that they didn’t understand many of the financial instruments they were using is the part for which they cannot be excused. They didn’t understand the risks but proceeded with the gamble anyway. Or worse, they understood the risks and thought they could escape with the cash before being rumbled. Who could have predicted they would be rumbled yet still escape with the cash?!
Those at the top walk away with their millions from years of gambling excess while the rest suffer job losses and eroded savings. As usual the blame and the money goes right to the top.
UPDATE: an interesting take on the american solution