Thursday, December 03, 2009

Bankers 'need to join real world', minister says.

They're not bankers, they're wankers. Royal Bank of Scotland directors are threatening to resign unless they are allowed to pay out million pound bonuses.

City Minister Lord Myners has stated that they need "to come back into the real world".

RBS reportedly wants to pay a total of £1.5bn in bonuses to investment banking staff, and the board has threatened to quit if the government blocks the move.

The Treasury said it would intervene if it was in the interest of taxpayers.

[...]

Lord Myners has estimated that at least 5,000 bankers in the UK will earn more than £1m this year.

He told the BBC that the median wage in the UK was just over £20,000 a year, and yet some bankers expected as a matter of course to receive bonuses, in addition to their salaries, of millions of pounds.

He also said banks needed to be mindful of the fact that much of the profit they were now making was due to "the benign conditions" created by the government pumping billions of pounds into the economy to stimulate demand.

These buggers were bailed out to the tune of billions of pounds in the hope of ending the credit crunch and yet, because of their banking practices, credit remains as crunched as it ever was.

The bank base rate is currently 0.5%, but look at the rates they charge to borrow.
On Sunday, the chancellor said he was concerned that the cost of loans to small firms had risen in recent months, despite the UK's record low base interest rate of 0.5%.

He added that banks had a duty to restore lending levels, and that the government did not rescue the banking sector "out of some charitable act".

However, Ms Knight said the banks could not lend at 0.5% because they had to pay much more than that for the funds they themselves borrowed in the wholesale money markets.

She said the wholesale price of money was about twice the base rate.

No-one is even asking the banks to lend at 1%, which is the cost of money according to Knight, but I know of people who are being offered mortgages at an 8.1% rate.

So, the banks are not doing what they were given billions of pounds in order to do, and yet these same bankers are now threatening to resign unless they are able to pay themselves and others millions of pounds in bonuses.

Let the buggers resign. The government simply cannot be blackmailed in this way.

I'm with Vince Cable:
Liberal Democrat Treasury spokesman Vince Cable said the government should "call the bluff" of the RBS directors and accept their resignations.
In a recession which was caused by these bankers, most people are happy simply to have a job, and yet the very people who caused the problem appear to think that the market will snap them up should they resign because they are not being paid million pound bonuses.

I say we should let them test that theory.
One banking analyst went a step further, suggesting the directors should be sacked. "Their job is very simple - to fulfil the requirements of the shareholders. If we tell them to paint everything blue, everything has to be blue," said Ralph Silva at SRN. "They should not be going up against shareholders. I think we should fire them [before they resign]."
Now that's a plan. Simply fire the buggers. After all, we are now the shareholders. And their rampant greed disgusts us.

Click here for full article.

3 comments:

daveawayfromhome said...

They threatened to quit? Did they really think that pretty much everyone wouldnt be glad to see them go? That's one threat you'll never hear here in the U.S. (though they get awfully close with their "need to pay competitively" line), because the reaction would be dont let the doorknob hit you on the ass!

Kel said...

It's insane isn't it? They think threatening to resign will scare us...

Boot them out I say...

John said...

I am perplexed at the government's approach to the bankers. The banks were technically bankrupt, most of these bankers are second rate and would all have lost their jobs without our money to stop their banks going bankrupt. Anyone can make a "profit" by declaring money that they have not actually received on the company's books but a day of reckoning will come and it did come. The bankers paid themselves vast amounts for false "profits" and we are now just letting them continue. Why?? See Bankers Bonuses for some thoughts on how to deal with bankers and bonuses.