Open Unionism


A forum to discuss new ideas and perspectives on Unionism…

City Bonuses are Back

The Times today
leads on the return to fortune of those dastardly bankers. As the Dow Jones yesterday surged back through the 10,000 point barrier and the FTSE posted a strong 100 point growth, bankers were once again considering the possibility of hefty bonus this year. But whereas in previous years the pension fund holding masses would have welcomed growth in the City and largely tolerated bonuses, any City largesse towards its most successful offspring this year is likely to be greeted with howls of outrage.

One of the consequences of the recent crash has been the development of a “them and us” attitude among the general public towards the bogeymen in the City. This knee-jerk reaction might be understandable, but it shouldn’t be stoked up by news editors smelling a public desire for blood.  The success of the wider economy is dependant upon a strong and healthy City. We need the banks and the banks need talented individuals; as a result the banks will continue to pay top whack to attract the best, the brightest and the most ambitious. This is a reality the public should accept, rather than pressurising the government to introduce strangling caps and limits on bonuses that will drive institutions and hence our economic recovery elsewhere. We also need to relearn that the 3rd quality I listed of those receiving bonuses, ambition, can be more of a virtue than a vice.


Filed under: Uncategorized, , ,

3 Responses

  1. northern whig says:

    “knee-jerk”, “bogeymen”, “a public desire for blood”

    How about a rational, well founded observation that banking salaries are evidence of a market failure – of transaction costs far beyond any reasonably justifiable level and that what we need is a system of capital exchange that doesn’t need an army of clerks sucking the life out of other people’s savings?

    Nothing new about Tories and their Tory Boy UUP chums defending capital but it is revealing to see yet more evidence of their own special form of producer interest (the “banking” middle man) and their continuing contempt for the consumer (the investor).

    No better than Labour.

  2. thefreshthinking says:

    I’m not a Tory, I’m in the DUP. I should have given more background on myself, I’ll do an introductory paragraph on my next blog.

    How do you determine what is a “reasonable” salary for a banker. His labour is the product he sells, it is worth whatever someone is prepared to pay for it. The banks are businesses they want to obtain the labour of the bankers at the minimum cost. If someone is able to do the work to the same quality for less then they will employ the person who is easiest to pay.

  3. northern whig says:

    “The banks are businesses they want to obtain the labour of the bankers at the minimum cost”

    It isn’t a question of the amount of the money that Goldman Sachs needs to pay to get the guy with the biggest appetite to hack the greatest lumps off the money tree.

    The problem is the efficiency of an industry – not its internal pay bargaining.

    We have rising stock prices at the moment. At their most fundamental these rises are a compound of higher anticipated discounted cash flow expectations (more profits sooner and a lower risk-free return rate), higher liquidity (more people competing for investments) and greater certainty (or at least a less worse downside) in earnings expectations.

    Nothing about this change in expectations is attributable to the work of investment bankers (despite any bragging about securing better placement for underwritten issues). All of it is attributable to the tenacity and hard work of real people in real (ie genuinely productive) industries who’ve survived the mess that the banks created in their last great orgy.

    If Goldman Sachs shared the downside there’d be a case for their share of the upside. As it is – there isn’t. They’re parasites that manage to feed off the economic body both as it grows and as it dies. It’s estate agency writ large. Maybe that’s why the pin-striped DUP are fans.

    What we need – and what we’ll eventually get – is a Google Finance disclosed, retail bank co-ordinated, fee-free IPO.

    And the sooner the better.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 25 other followers

Open Unionism On Twitter

Open Unionism bookmarks

Our facebook group page

Party histories

Here's the history of the UUP.

Here's the history of the DUP.

Slideshow app for UUP & DUP flickrstreams

Follow this link for a great slideshow from the UUP flickrstream.

Follow this link for a great slideshow from the DUP flickrstream.

UK Parliament on flickr

%d bloggers like this: