Monday, 9 February 2009

Bonuses for Bankers

Bankers in government-bailed out banks are set to get £1billion in bonuses this year, with government approval. UK Financial Investments Ltd (UKFI) are a group of bankers recruited by the Treasury to manage the public's stake in the banks. UKFI are set to approve the proposals for this year's bonuses.

"Sources close to UKFI defended the proposed incentive payments. “If these guys sell RBS at a large profit for the taxpayer in a couple of years, who’s going to begrudge them a bonus?” said one."

In most jobs, any bonuses are paid by results. Why are bankers different? Although there has been the promise of a 'review' of bankers' bonuses, it's not due to report until the Uutumn at the earliest. That will be too late to deal with this year's round.

I cannot see any reason for not taking the banks into full public ownership. That way, the government would be in a position to not only ensure that bankers' bonuses are capped or even scrapped, but they would also be able to see the books. No-one knows how much toxic debts the banks have. The first bail out didn't shift credit so now there are attempts to make it happen through a second, insurance-based bail out. While it may not hurt the public purse now, it is highly likely it will in the future. If the people pay so much for them, why can't we own them? Then, if the likes of RBS do make large profits in a few years, the public purse will see the fruits of its "risk".

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