Banking On A BonusDecember 8, 2009
The bankers are revolting. I could leave it there, but I’ll carry on (cheap and easy I know, but I couldn’t stop myself).
The board of RBS, a bank currently part owned by the government, have made a threat to resign en masse if the government make good on their promise to prevent them from awarding bonuses to each other this year, or if that can’t be prevented, make their noses bleed with a ‘windfall’ tax. My financial knowledge is rudimentary at best, although like most of us now, it’s improved because since we’ve plunged into this recession we’ve wanted to know what the hell happened and why. What I have understood is the concept of reward since I was around four years old and it goes like this: you’re given a reward, in whatever form, for doing well. It also acts as an encouragement to do better. Now then, going back to the banks and bonuses. Barclays found a way of hauling itself up without government help. Goldman Sachs paid their government loan back in full and as much as it sticks in our throats, they can continue in the way they’ve always done, unfettered by such silly things as government rule and a conscience. RBS is not at that stage yet. It hasn’t yet proved itself to be worthy of a reward. Because it was rescued along with other banks by the state, we, the great unwashed are part owners now. Part owners faced with a bill of approximately £40,000 per family, or £13,800 per person to be paid off in the form of higher taxes and swingeing cuts in perpetuity, mind you, but owners, nevertheless.
It is feared that these measures could result in a ‘brain drain,’ as the top people may go to other countries. The same brains that got us in this sorry state in the first place. I don’t think there’ll be many places to go as America will also be toughening up on bonuses and the superb business model of Dubai has recently proven to be made of sand.
If this board is going to resign, then they should go ahead and do it, otherwise they should put up and shut up, because the rest of us have to.