Banking bonus culture – Back to square one?

According to recent reports it looks like corporate banks and business banks, both at home and in America, are due to hand over record amounts of bonuses this year, despite recovering from one of the biggest financial crises the western world has ever experienced. Over the last year and a half, governments across the globe have pumped unprecedented amounts of money into the financial industry in an effort to boost failing banks, but even thou taxpayers have stepped in, essentially saving Wall Street and The City’s bacon, financial institutions still seem to think it’s acceptable to pay millions of bonuses each year. A recent article in the Guardian suggests that The City is due to hand out over £6bn in bonuses this year, 50% more than what was awarded last year. Similarly, over in America Goldman Sachs is reportedly readying a giveaway of over £10bn to hundreds of its investments bankers after having announced record profits received within the 3rd quarter of over $3bn.

So where does that leave us all? After fears of a total collapse of the banking system; mass panic, government bailouts, repossessions, runs on savings accounts, G20 meetings about bonuses and bonus culture, nationalisation, bankruptcy, job cuts, rising unemployment, insolvency and the potential loss of Britain’s AAA rating we are absolutely, 100 %, no doubt about it, slap bang back exactly were we all started. The banks, bankers and financial institutions haven’t learnt a thing, some have even made a profit thanks to collapse of other companies, and all the while Joe Bloggs’ hard earned tax money has gone to prop up a few, incredibly rich shareholders.

Today Alistair Darling condemned the actions of Wall Street and their intention to pay out billions of dollars in bonuses, yet the Chancellor appears to be reluctant to get into specifics when it comes to curbing the bonus culture within his own financial domain. I must say I totally agree with one commentator on the Guardian who proposed that the government should for once show their true socialist colours, instead of pretending to be red…

“Alistair,

The banks were drowning & you saved them. They are thanking you with a punch in the face. Nationalise the remaining 30% of the RBS. Put all public sector & government business through it. Make our pension institutions perform their trades through it. Don’t give them our money to play with. Make sure the nationalised bank is a secure place for our money. Make it clear that all other banks are risky because they will never be bailed out again. Folks & businesses who invest, save & trade through them do so at their own risk.”

Makes sense to me…