The recent bonuses paid to employees of nationalised (and part-nationalised) banks have really got up some people’s noses, so much so that there is now a petition you can sign to ask the Prime Minister Gordon Brown to prevent bonuses or over-inflation salary increases being paid to employees of banks where the government now has a majority shareholding.
The government should use its power as a majority shareholder to prevent banks in receipt of government (taxpayer) funding from paying bonuses and over inflation salary increases to employees. A total ban on bonus payments should be made a condition of any government loan or bail-out.
If you would also like to show your support by signing the petition with the 531 other people who have signed it (at the time of writing), you can do so here.
A certain Robert Peston is one of the names on the petition (although I’m guessing it wouldn’t be too difficult to fake it).
photo credit: Serendigity
I work for a bank and am disgusted that i might not be getting a bonus. I am not a fat cat exec or a major shareholder, I just go to work monday to friday working my ass off for people who have motor accidents, just like a cashier would work in a supermarket or a road sweeper would sweep roads! so why should i or my fellow colleagues not be recognised for the hard work we do we are not on huge wages or the ones who have decided what to do with the banks money yet we are being punished just because we work for a bank.
Hi Anon,
Thanks for your comment – that’s one of the problems of course, not everyone who works for a bank is a “fat cat” – in fact the majority aren’t.
However, it’s possible that without government money, a few banks would have gone bust, no doubt leading to thousands of job losses. Again, it would be the people at the bottom who would suffer most, but then they wouldn’t be worried about getting a bonus, they’d be worried about finding a new job.
And when there are companies in other industries going bust left right and centre, it makes it difficult for others to take when bailed out companies pay out bonuses to their staff.
My heart bleeds. Why expect bonuses? Salaries alone should reflect an employee’s worth. that’s the way it works in most jobs. Bonuses for people at the bottom of the pile are simply a device to allow people at the top to cream obscene amounts at the expense, ultimately, of the the entire country
I work in manufacturing, my company pays bonuses, but despite meeting personal goals, I will not be getting a bonus this year as the company will not achieve its targets due to the recession. If fact we are expected to take a salary reduction. Yet I am now expected as a taxpayer to contribute towards bonuses to bank employees whose banks have made substantial losses. Time for bank employees expecting a bonus to start living in the real world.
i have just had a 5 year bond with RBS.
it matured this week and guess what bonus i got on it yes your right zero.
it would have been beter in a normal savings account.
The government has created an artificial market by bailing out bankrupt banks. In doing so the current Labour government has sidestepped partial responsibility for the collapse. At least Alan Greenspan, the former Federal Reserve chairman had the integrity to admit a mistake. These banking organisations (and their employees) argue that without bonuses they will not be able to compete with other banks and similar institutions – in other words to compete in the market for the best employees. If many of these banks were truly left to compete in the market they would not exist, on the basis that they have failed. Any other business (in particular small to medium sized businesses) would have been bankrupt in a similar situation.
Now the government has created an artificial market whereby banks that are partially state owned (and in some cases fully owned by the government), continue to pay bonuses. In fact even those that are not state owned are in fact indirectly state owned by the way of the government backed insurance scheme, guaranteeing any future bad debts – many of these banks would not have survived otherwise. The recent spate of bonuses should go to paying back the tax payer, instead of the tax payer having to deal with cutbacks in public services and higher taxes. People involved in the banking industry are still arrogant enough not to see that what is happening now is not only morally wrong, but also against basic market principles which they claim they adhere to. I do believe that these banks should have been left to fail. I do not agree with the argument that allowing this to happen would have resulted in the economy collapsing. Those with guaranteed savings should have kept their savings (and correctly backed by the government), shareholders and investors should have been the ones to bear the burden of the banking collapse. They were content with their returns on investment when the banks were doing well, they should then be prepared to deal with the risks of those high returns. If they felt that the banks dealt fraudulently with their investments then this is a separate issue, they should have taken the banks and their previous directors to court to try and get back some of their investments. In other words let the market and law deal with the consequences. In fact we probably would not have the situation that those who presided over the collapse and disappeared when things went pear shaped would have been hunted down by investors.
The consequences: you cannot live by the market when it suits you, and when the market turns against you, go completely against market principles and create an artificial market financed by the government. Ordinary people will be paying for this for generations to come – in the meantime banks have not learnt any lessons. In fact we have now sown the seeds for future collapses. Banks will continue to operate in an unsustainable manor, lining the pockets of senior executives and major investors – because they have been given the green light by government. The government deficit will also have a negative impact in that other critical areas – the environment and global poverty will now take backseat to the deficit and its consequences. The banks would have survived but at what price to the country?
Nothing is free in life. The cost of propping up the banks will ultimately have an effect on Britain and the USA’s international competitiveness. This will enable Asia, other eastern countries and hopefully developing nations to take centre stage. So in the end the market will have its say.
Is there anything or anyone who can do something to get accross the message of the vast majority of people who are fraustrated by the Robber Barons of the financial sector who have not only broken the bank of the plannet but have also put the world back at least 5 years. These people who are still milking the taxpayers in so many ways whilst still living the high life be it still in employment or in retirement.
Please let me know?
Top Bankers are again starting to pay themselves big bonuses. The ongoing crunch is being paid for by ordinary people like me. Every bank baron who gets a bonus is being subsidised by pensioners like me – and others – whoo have seen their investment income more than halved in the past year. And it wasn’t that much before anyway. What a system!
Response to David Rees – David, your company works in the real economy, this is why. Banks operate in an artificial economy. How come individuals who have worked hard their entire lives – intelligent individuals, moral individuals, barely make ends meet, earn in their entire lifetime what some bankers earn in a matter of weeks. Do they have the skills and knowledge to justify this gap – I think not. Banks operate in monopolistic manor – they are able to make huge profits because of this. They can charge whatever they want to businesses and customers. They are able to create paper wealth by creating ever more complex financial instruments. With the large sums of money at their disposal they are able to influence markets with their investment decisions. It’s like running a casino, the odds are always in their favour. But there are always losers. Whether it is the pound that is being devalued, or whether there is fraudulent activity, there must be losers.
Jack Kennedy – good question. The government is powerless (or useless I am not sure). It is really up to the people. The UK needs mass demonstrations (peaceful of course) – the one thing I know is that the sentiment shared on this blog is held by the vast majority – I would say 97% of the population. Just 10% would be needed to go on a mass protest in the City – that would be millions. Then the people will be heard. There are more important issues that need to be tackled. Poverty in the UK, poverty worldwide, the environment, education etc. Something is wrong with the sums of money these bankers are making. People need to ask themselves, how come after one of the worst recessions of the last 100 years, with the real economy still struggling, are banks able to make billions in profits. Where are these profits coming from? Who is losing? With the country in negative growth, where are these profits coming from? Things do not add up. Pensions are in freefall, but banks are making billions from investments. How much longer will people stand for this?