Back with a vengeance

Ed P

As we poor suffering taxpayers own 84% of RBS, the total bonus payout could be restricted to the proportion that is not publicly owned, i.e., 16% of 1.3 billion = 208 million.

Nick

Brown's strengths are claimed to be his encyclopaedic knowledge of finance and banking affairs, a techocratic ability at details and a desire to promotoe "progress".

In which case re-organising the UK's banking system should be right up his street.

In fact nothing has been done about the banks since their nationalisation over a year ago. It's entirely business as usual.

One can only assume that this is just more of Brown's dithering and inability to take a decision. He could have clamped down properly on bonuses, called the bankers bluff, set up RBS as a national investment bank, re-mutualised the building societies. I'm not saying that any of these things are good ideas or not, but Brown keeps talking that things have to change within the banks and yet he has done nothing.

And he has the nerve to call the Tories the "do nothing" party.

stephen

My real gripe, admittedly with hindsite, is that the Govt paid far too much for their equity stake in RBS. It now clear RBS was technically insolvent at the time of the bailout and the Govt should have paid just £1! You can speculate why-incompetence by Lord Mynors or more sinisterly protecting the scions of Charlotte Square(Brown's and Darling's Edinburgh mates) who stood to loose their shirts on RBS shares!

mitch

Look on the bright side If they screw up again we cant afford another bailout so we will see who then is too big to fail.

Olaf

I'm just shocked they haven't thought of calling their 'bonuses' something else. Give it time they'll call it the 'delayed annual payment' or something equally nebulous.

Bob Dixon

So why does Cameron waste time over No.10 & 11's personal difficulties.
There are 3 financial black holes for us to fall through.
1:Governments need to find anyone to lend them £200 billion a year.
2:Clearing Banks going to the wall in the next crash.
3:Joe Public's need to raise further finance to pay off credit cards, loans,mortgages,rent & general day to day expenses.
Boy George has got it right.The Nation needs to pay down debt NOW.

oldtimer

The other overnight story (or perhaps non story for the Spectator?) was Osborne`s Mais lecture.

I think it provides a coherent, well-argued and convincing framework for the Conservatives if they win the election. I read that it was dismissed by Mr Cable as more about "the harness than the horse". It seems to me that it was the harness that was sadly missing when private and public debt ran wildly out of control over the past decade.

Moraymint

I do neither "the politics of envy" nor "keeping up with the Jones's". Waste of time, both.

But on this matter, as I prepare for work in the morning, to head out and then struggle like hell all day to keep the wheels on my business and my family finances solvent, I tend to feel physically sick when I hear about bankers pulling in billions of pounds in bonuses after all that we've been and continue to go through (with by far the worst yet to come).

The banking mafia machine exceeds our politicos' capability to control it.

That's why we got in this mess in the first place.

Indeed, it was our political class's obsession - here and in the US and Europe - with unleashing the money supply and endeavouring to make every Tom, Dick and Harry feel like he was rich on the back of unsecured personal debt and a housing price bubble, that encouraged the bankers to spew money into the economy at no risk to themselves.

Pathological political incompetence towards regulation of the retail and merchant banking industries is why we're likely to see a re-run of banking meltdown in the future: only next time, there will be actual meltdown rather than an eleventh-hour taxpayer bail out.

The taxpayer is now insolvent - this generation's and the next.

PuppetMaster

A Glass-Steagall type separation would be good, if it happens. Unfortunately we have yet to face the fact that the finance industry has captured our government, hence the looting of the public purse. Unless these criminal banksters are brought to justice, along with the politicians who allow them to steal, not much is going to change.

denis cooper

The final sentence of Osborne's lecture:

http://www.conservatives.com/News/Speeches/2010/02/George_Osborne_Mais_Lecture_-_A_New_Economic_Model.aspx

"Let us move from an economy built on debt to an economy that saves and invests for the future"

sounds as good now it did in 1996 -97 when Brown and Darling were saying rather similar things (remember that "savings culture" they were going to develop?), but then I read:

http://www.timesonline.co.uk/tol/news/politics/article7040127.ece

"The Conservatives have arranged to borrow up to £5 million from a boutique private bank once run by Jonathan Aitken, the Electoral Commission revealed yesterday".

"One Tory MP said: “We are wasting so much money at the moment. Lord Ashcroft is a net vote loser and this is putting us in the hands of people who we shouldn’t.” "

"The Tories have £4 million in loans and £10.1 million in credit facilities, while Labour has £9.8 million in loans and £6.2 million in credit facilities."

So once again it seems to be a case of "Don't do as I do, do as I say".

Pete Hoskin

oldtimer: James posted on the Mais lecture last night...

EyeSee

One of the problems in the corporate world that has led to banking failures and much else besides is the lack of control from shareholders. Companies exist to pay their shareholders, but the Executives have been getting above themselves and not held in check. Years ago, the Townsend Thoresen Ferries boss decided to do away with 'free' travel for shareholders. He was reminded as to who actually owned the company and how that wasn't him. We need more of that. If a trader makes a proit, pay his bonus, it is a commission more properly. But as the bank (RBS) has posted a substantial loss, in what way do the Executives deserve bonuses? If it was a purely commercial enterprise, without state support, it would of course have collapsed. I wonder sometimes why the government didn't simply guarantee the depositors and let the casino bit of the bank go to the wall, but that of course would support the little people, rather than those on whom politicians rely...

So value should be returned to the shareholders, which in this case would be the taxpayer. That is what the focus should be and even more reason why the bosses shouldn't be getting any form of bonus and in fact should actively be under threat. Perhaps reduce their tenure to rolling 3 month contracts for failure to perform. Not forgeting that other banks are miraculously posting large profits. Where did they come from? I mean they didn't happen overnight, so must have been coming in whilst we were supporting them. Not straightforward all this 'save a banker' is it? Too many little people pay for the big salaries of the politicians friends; the recent steel plant closure being another example of 'the club' in action. 1500 jobs? So what, compared to all the Carbon Credit money we get if we close it (and open a new plant in India) say Indian owners Tata. Carbon trading being a scam set up by politicians at the bidding of 'businessmen' such as Rajendra Pachauri, head of the UN's IPCC, a Tata man and Indian.

The government should be scared of the people.....

denis cooper

While it's a pithy description, I'm not sure that references to "casino" banking are necessarily helpful.

The word "casino" might summon up an image of frenzied gambling, minute by minute speculation in financial derivatives.

But as I recall it wasn't that kind of wild activity which brought down eg Bradford & Bingley - the problem there was its accumulation of rather stodgy, apparently safe but in fact imprudent, "buy to let" loans.

Tim Carpenter LPUK

The whole "banker bonus" canard keeps belching along with enormous help from the likes of the BBC.

Had the Government not bailed out RBS we would not be having the same conversation. This is "bootstrapped outrage". Brown moved the leaking piss-pot (RBS) into our living rooms and we have the stupidity to complain about the pot?

Get rid. End of story. Sell the shares at market price before Cameron can hand over to a few something that cost us all.

strapworld

Moraymint, I truly believe the answer to be Credit Unions! I am sure there will be one in your neck of the woods. They are growing now and, properly managed, will be a force to reckon with.

Moraymint

strapworld ... thanks ... I shall investigate!

Bohodotcom

It is a superb con. Brown knows it.
Print money... bankers get bonuses on the back of the debt buy-back that the money is used for - ie bankers get rich on the back of trades that create no real value but that devalue sterling.
Brown allows it because it creates the illusion of wealth generation.
Gordon Madoff, would be a good name for him.