Wednesday, October 21, 2009

Mervyn King: 'Never has so much money been owed by so few to so many'.

The Governor of the Bank of England has lambasted the banking industry hours before a leading economic think-tank prepared to publish figures showing the total bonus payouts to City workers in January will soar to £6bn.

Mervyn King described the £1 trillion of support given to banks by the taxpayer as "breathtaking" and "unsustainable". He said: "To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform." Mr King argued that banks took huge risks because they knew they would be bailed out and because they were seen as "too big to fail". He called for sweeping reforms to the way they are supervised.

What astonishes most of us is that the banking industry is simply carrying on as before. They have learned nothing from their failure because they have not needed to learn anything. They are "too big to fail", so why should they worry about consequences?

If I knew the government would refill my current account every time I emptied it, what need would I have to worry about my finances?

And I say that as someone who, reluctantly, supported the bailout. The problem wasn't the bailout in itself, the problem was that no steps have been taken to change the way the banking industry behaves.
The TUC general secretary Brendan Barber said: "Bankers' bonuses might be lower this year than the bumper year of 2007 but a £6bn bonus bonanza is still absurd when you consider the depth of the financial crisis their greed and recklessness plunged the world's economies into. It's only as a result of huge taxpayer bailouts that the financial sector has been kept going, yet the banks show no sign of curbing their behaviour."
Most of us are left giddy by the sheer orgy of greed being shown by these people.

As King says, it is "breathtaking". Someone has to stop this. Especially as it is the ordinary taxpayer who is currently underwriting this huge transfer of wealth from the poorest to the richest members of society.

And the same pathetic excuses are being made to justify this. David Buik, chief strategist at BGC Partners:

"I understand the anger that is out there and accept that there have been bad practices in the past," he said. "But if you want to restore the banks to health and pay back the taxpayers' investment you have to employ the best people, and that costs money. This year's round of bonuses will be paid in an acceptable manner, whereas in the past, perhaps they were not."

Buik seems not to understand that it is the bonus culture itself which most of us disagree with. Let's leave aside the farcical notion that the people who almost brought the entire planet to the brink of financial collapse are "the best people", let's simply question why it is acceptable for certain individuals being paid six and seven figure salaries to argue that it is not possible for them to work to their full potential unless there is also a huge bonus on top of that colossal fee.

Most of us work for our salaries and, should we be unable to do what we have been hired to do, we are fired. The notion that one can under perform and claim that this is due to a lack of salary motivation, is unique to the banking industry.

We are dealing here with greedy, rich twats. The day that Mervyn King turns against them really should be the day that Gordon Brown takes decisive action against this culture of greed which almost bankrupted every single one of us.

They flatter themselves that they are "the wealth creators" when the truth is that they have created nothing other than massive debts which will probably be paid off by cutting services to the very poorest members of our society.

The very last thing they deserve is bonuses. Indeed, they should consider themselves lucky still to have jobs.

Nick Leeson was sent to jail for causing less damage than these buggers have done.

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