Bonus points

Not all bankers are bad people. Not all banks are surviving only with the support of the billions of pounds of taxpayers’ money. Not all bankers’ bonuses are rewards for failure.

It is important to state these things, obvious though they may be, because Downing Street has undoubtedly poured petrol on the bonfire of rage about bankers’ bonuses as a tactic to deflect public discontent over Gordon Brown’s handling of the economic crisis — a strategy that backfired when it emerged that a former Brown adviser, Sir James Crosby, had allegedly sacked someone for warning about the risks HBOS was taking. This week’s Treasury select committee show trial — like the equivalent Congressional hearings in Washington — was much more about ritual humiliation of former bank chiefs than about extracting technical evidence of their business failings. Soon the Prime Minister really will be the only person in this story not to have publicly said ‘Sorry’. At a time when the mood of the crowd is so febrile and fearful, we should be wary of politicians eager to nominate public enemies so that we might alleviate our apprehension by pillorying them.

But there is nevertheless widespread revulsion, not to mention sheer disbelief, at the crassness of bankers who still believe themselves entitled to pay packets far in excess of those awarded to ordinary mortals. Of course some bank employees have performed better than others, and deserve to be better rewarded. Some are lucky enough to have contracts which entitle them to bonuses come hell or high water — both of which might be said to have now overwhelmed financial markets — and cannot seriously be expected to tear up their own contracts. But all of them belong to a profession which stands in disarray and collective disgrace, and which must recognise the damage it has wrought through recklessness fuelled by the prospect of disproportionate personal gain.