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How would you change the banking system?

09:12 UK time, Tuesday, 13 April 2010

Gordon Brown has admitted he made a mistake in not introducing tougher bank regulation. How would you change the banking system?

The PM, chancellor from 1997 to 2007, said that in the 1990s the banks had all been calling for less regulation, "And actually the truth is that we should have been regulating them more."

Yesterday, Nick Clegg, leader of the Lib Dems, said cash bonuses for bankers should be capped at £2,500 a year while board directors in financial institutions should never earn extra payouts. He added that the names of all banking employees earning more than the prime minister (£197,689 per year) should also be published.

How would you improve the banking system? What is your reaction to Gordon Brown's admission? Do you think Nick Clegg's plans are realistic? How should employees in the financial sector be rewarded?

What would you do if you were prime minister?

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Comments

Page 1 of 6

  • Comment number 1.

    The Lib Dems can publish the Bankers salaries and bonuses till the cows come home. As we all know where there's a will there's a way so bankers and the like will find other ways of rewarding themselves for mismanaging our money for their own personal gain.

    It's about time standard salary and bonus rates were introduced and people only get paid the going rate. This works perfectly well in othr sectors so why not the banks. If these people can't put two and two together they shouldn't be in the job.

  • Comment number 2.

    'Do you agree with LibDem Banking Plans' is the HYS question?

    I'm sorry, did the BBC HYS team watch a different interview last night to come up with 'cash bonuses for bankers will be capped at £2,500 per year'?

    Carefully watched the Paxman interview with Nick Glegg last night - as I do with all political leaders! Considered Clegg's answers on ALL LibDem policy and was impressed, especially when he rose calmly to the usual challenge of Paxman 'the scary terrier' approach diving into ANY politician's obsequious hole in their 'answer'?

  • Comment number 3.

    Bonuses don't work the way their meant to. Although I didn't work in a bank, at bonus assesment time I used to concentrate only on the measurable parts of my job, which meant I got my bonus every time. Thats what people do. people will take higher risks to ensure their payments. If all bankers get capped to £2500 a year that may hit the lower paid bsnk clerks who only earn a normal salary. Let's face it there will be ways around this for the bosses. with share deals increased pensions instead etc.

  • Comment number 4.

    Limited companies should be required to publish the remuneration of directors and high paid executives but under Labour many of these disclosure criteria were dropped. The government is otherwise powerless.

  • Comment number 5.

    "The Lib Dems can publish the Bankers salaries and bonuses till the cows come home. As we all know where there's a will there's a way so bankers and the like will find other ways of rewarding themselves for mismanaging our money for their own personal gain."

    Not if they are all down the Job Centre!

    I cannot see the argument that "we have to pay these high salaries and bonuses because they attract the best people".

    These are the same "best people" who ran the majority of our banks into virtual bankruptcy and had to be bailed out with our money.

    These are the same "best people" who are still in charge of the banks we now own despite their proven incompetence.

    These are the same "best people" who are unbelievably arrogant enough to still be awarding themselves obscene bonuses for continuing to make losses in a time of supposed recovery.

    Sack the lot of them! the man on the Clapham omnibus could do better.

    Cap banker's salaries at a fair rate, after all they are in charge of a major part of the country's wealth.

    Award bonuses only for exceptional performance, not just for turning up most mornings and doing their job (badly).

    Insist that banks help small businesses, house buyers and savers rather than line their own pockets. Maybe they should have "7 lean years" in penance for the "7 fat years" (and then some) they've enjoyed until recently.

    If they don't like it then by all means let them go somewhere else and wreck that financial system with their greed. They can then be replaced with some real talent recruited from the junior ranks. I'm sure there's plenty out there who would do a better job (not difficult) for a realistic wage.

  • Comment number 6.

    I'd like to see just one party actually do something that would prevent the bankers doing exactly the same kind as business that led to the global crash.

    Because that is exactly what they are doing right now, only this time their insane risk-taking and dishonest/disingenuous accounting practices are being underwritten by us , the taxpayer.

    The current government have made no practical moves to prevent the situation recurring, neither have i heard any suggestions from any of the opposition parties.

    And all the time the banks are doing exactly what they were doing before the crash.

    Bail Out 2015 anyone?

  • Comment number 7.

    Isn't it time bankers had to follow the rules and rough it like the rest of society?

  • Comment number 8.

    "The Greedy Bankers' are above the law, They can closed down any small business, without a reason and make anyone homeless in the U.K. The counter clarks are treated like robots, by most banks, low wages' and spyed on all the time. They dont have any bonus,the way the big banks have moved the call centres' and telephone banking to cheap wage countries who you cant understand most of the time, and closed the small local banks, Where you had a good service from the hard -working U.K. staff} many have gone the rest are very lucky to have a job today? The Bankers have far to much power in the U.K. About time the laws were made in favour of the customers? The banking system needs a complete revamp .

  • Comment number 9.

    I think that the Lib Dems have got it spot on and i fully support this one!!!!

  • Comment number 10.

    Well the bankers are all greedy gits.

    The banks need to be regulated much better possibly by the BOE.

    The banks should be not allowed to make huge amounts of money out of us they should be made to serve us.

    modest fees I would say are fair.

    Bonuses should be fair, I mean why not give members abit of a slice of the cake, especialy those that keep their accounts in good standing.

    The less unfortunate customers should be looked after fairer & if bank charges are to be applied then there needs to be a fair system put in place so that only the fees that are actualy incurred bt the banks are charged to customers, now thats fair & thats all we are asking for.

    Also Banks & building societys need to be forced to put up interest rates on savings accounts, it takes them literaly a week to inform us of rate changes when lowered, however when they go up the they take months, is this fair?



  • Comment number 11.

    How do we change the banking system? We get rid of it and start again with something different it just doesn't work.

  • Comment number 12.

    They'll just find a way of wriggling around it. Anyone with enough money passing through their hands will find a way of helping themselves to some of it. What is really needed is for those getting rewarded for taking risks to also face the consequences when those risks turn bad (it's easy to take risks if you know you'll always be rescued if it goes wrong). Essentially banking needs to be returned to being a service instead of a parasite, and rewards for being part of it should be no more than is fair for providing the service and not for simply being in a position to help yourself.

  • Comment number 13.

    What about Banks that didn't need public help?

    Why do people think the banks caused the crash. It was people borrowing too much and not paying it back that was the problem. The banks let this happen but so did the borrowers.

    The only difference is that banks don't get to vote but joe public does so which one would you guess is going to get the bad end of the stick.

  • Comment number 14.

    What do you class as a 'banker'? I have a friend who is 22, works in a bank on the counter and has a salary of about £13,000 a year plus a bonus of about £4,000. Without her bonus, she would only be making 13k, which is not enough to live on. Is it fair that her bonus should be capped at £2,500, reducing her salary to £15,500 just because banks use these 'bonuses' as a way of keeping salaries down and holding employees over a barrel? Its just a way for them to say 'if you put a foot wrong we can slash almost a third of your salary for the year and there's nothing you can do about it'.

    Punish the ones that got us into this mess, take away the ridiculous, over the top bonuses that the big boys get, but don’’ punish the regular bank staff who are already being exploited by their employers.

  • Comment number 15.

    The main problem with the banks was that they all merged and became too big. They should be broken up into lots of small banks again, then no one institution would be too big to fail. Aside from that, let them run themselves; if they run themselves into the ground chasing bonuses then that's what should be allowed to happen to them.

  • Comment number 16.

    I work in the Banking sector, but I'm not a banker - I work on a back office computer system for an American investment bank. A discretionary bonus is part of my overall compensation package. For 2008 I didn't get one because the bank's profitability was down. I did receive a bonus recently based on 2009's profitability. It was in excess of the figure bandied about by Nick Clegg, but nowhere near the sort of sum that the press like to bandy about and which so inflames public opinion.

    Did I deserve it? Yes I did. Do I feel guilty? Not in the slightest.

  • Comment number 17.

    Nick Clegg seemingly has his basic principle correct in that the banking compensation system as it stands today needs to changed significantly. Where I disagree is by putting populist flat low target bonuses etc for the sake of it. Many if not most bankers remain still highly competent and qualified indviduals and at the investment banking arena will and should remain well paid.

    The key problem is that the financial industry as a whole and to some extent corporate director pay has gone up stratospherically in comparison to other profession including equally well qualified ones such as medecine and engineering for instance. For economic fairness and societal balance this has to change quickly. The deeper issue is that it has to be tackled as an industry issue, with hedge funds, regular asset managers, advisory firms, corporate lawyers and the whole support industry all being brought forth under new guidance for it to have any value.

  • Comment number 18.

    This anti Bankers rhetoric is getting silly. The main reason for the finance crisis was due to the lack of a regulatory framework, and the fact that it was in the interests of the Government in this country and others to encourage bankers to lend money they shouldn't have. This meant that when some people defaulted sentiment changed, and the value of shares and other commodities suddenly reduced creating a downward spirral.
    The majority of bankers did nothing wrong, and were hurt as much as anybody else. Indeed a lot of them lost their jobs.
    Trying to place a cap on their bonuses will either lead to banks having to pay significantly higher base salaries, irrespective of performance, or where the job is mobile simply move the jobs out of the UK, leading to lower tax receipts.

  • Comment number 19.

    No, I do not think that I have the right to interfere in commercial arrangements between employer and employee except when a dispute arises and they need mediation or a tribunal to sort it out. And as Clegg is making his pitch to be hired to act on my behalf, neither does he!

    Mind you, I am not much in favour of a 'bonus culture' even though have in the past worked in a software house where a bonus was paid based on the previous quarter's sales. It didn't make any difference to me, I wrote code to as high a standard as I could out of pure professional pride, and enjoyed making it do just what the customers needed.

    Someone commented on the 'box-ticking' mentality a bonus system can engender. If you have ever met educational 'performance management' systems, under poor management that's what they become... and you don't even get paid more for ticking the boxes! It doesn't improve anything, though. I'd just decide what I intended to do that year, write them as my 'targets' and then carry on doing what I intended to do anyway. Boxes ticked, that college's poor management satisfied... and I'd done what I thought was needed. Not quite the idea behind a system if properly managed provides for personal growth and institutional development.

  • Comment number 20.

    Though while I agree with this, I believe the bankers will find some sort of loophole to give themselves obscene salaries.

    The best way to prevent this is to introduce a maximum salary that takes into account all the bonuses, share options, etc that they pay themselves.

  • Comment number 21.

    There was a story year's ago, before the 'Big Bang', when the Financial Services Industry de-regulation began, at a Merchant Bank one of the Dealers was making FX trades which produced millions in profit. The Director responsible for FX trading sacked him, another Director asked why, the Director told him big profits mean big risks, the bank cannot afford to take such risks.
    We need to reproduce that attitude in the banking sector.

  • Comment number 22.

    It's not just their bonuses that should be capped, their basic salary should be capped too!
    The fact that some peoples income is allowed to spiral out of control is one of the major reasons why the gap between rich and poor is getting wider every year.
    All professions should have their incomes capped, look at the mess football clubs are in!!!! Because of GREEDY footballers, managers and agents!

  • Comment number 23.

    It's nieve for any politician to try to legislate any ceilings on bonuses. Don't get me wrong , there have been some ridiculous payments made to undeserving bankers (and others). But to try and bring a culture of not rewarding success in business seems to me to be anti intuative. We do need to change the banking system. It has to be more accountable. Brown ignored the warning signs for years that banking practices were getting out of hand with wreckless lending. He was even warned by the Bank of England back in 2003. He chose to ignore it. Yes some bankers were greedy. But Brown had a direct role in allowing these people negligently lend and increase levels of risk. So much for Browns prudence.
    I would change the banking system by removing Brown as far away from it as possible. That would be a true step to recovery for the banks and the country as a whole.

  • Comment number 24.

    The most stupid idea anyone can think of and I don’t work in a bank! So limiting bank bonus’s to £2,500 means as a banker it’s not worth working hard with the money to invest to get a fat bonus. May as work 9 to 4, drink coffee and watch the cash not making any more cash! Oh, and as a private bank (not a state owned one) seems if making money is now a dirty word.

    Politicians are so completely thick makes you not want to vote for any of them! I really do feel normal people on the streets have a better idea of how to run the country.

  • Comment number 25.

    Are we going to cap "obscene" lottery winners?

    Who next? If bonuses make up the larger part of someone's salary (as frequently happens in the sales industr), will salaries increase dramatically instead?


    "2. At 10:09am on 13 Apr 2010, corum-populo-2010 wrote:
    'Do you agree with LibDem Banking Plans' is the HYS question?

    I'm sorry, did the BBC HYS team watch a different interview last night to come up with 'cash bonuses for bankers will be capped at £2,500 per year'?"

    I didn't watch - was this figure not mentioned??

  • Comment number 26.

    How would you change the banking system?
    By nationalisation....
    At the moment bankers are paid by how much they can deceive customers for bank's profit margins. Only through nationalisation their pay can be in relation to the customer services and satisfaction. & I'm sure Torys with some LibDems would shout out loud against it. Sir, we already own 80% of banking system, why dont make it 100%, and put money back into customer's pockets rather then in manager's pockets.

  • Comment number 27.

    Is Nick Clegg also going to cap public sector bonus' then? Bankers aren't the only people who receive them. At least this is a wealth generating sector of the economy unlike the public sector who seem to get bonus' for turning up to work on time.

  • Comment number 28.

    I seem to recall when the new HYS was introduced that the BBC told us updates would be considerably faster.

    That hasn't happened then.

  • Comment number 29.

    Do you seriously think that the banking system will ever change? US banks are still manipulating figures to show better profits, I'm sure British banks will follow suit. Much as I and most of the country would love to see restraint on bankers perks, the taxes and political kudos that the financial markets produce is just too big a cash cow to change. I think it's a pretty sad day when there is more worry about what the banks and the markets think of the election results than who the public vote for. The bankers and their minions hold far too much power and influence in westminster and no election will change that.

  • Comment number 30.

    Bankers are very shrewd individuals. They will always find loopholes and ways to circumvent any form of regulation to meet their own parasitic and corrupt aims (i.e. ripping people off). The sooner all bankers are salaried and banking goes back to what it used to be, the better.
    Bankers are nothing more than foul, corrupt pariahs...... just like Politicians!! They are a match made in heaven!!

  • Comment number 31.

    The important requirement is to reintroduce controls on the amount of money the banks are allowed to create by means of credit. This would automatically mean that it would not be so easy for them to make huge profits and pay huge bonuses.

    If this were done and the government would be able to create more money by leaving more of the budgetary deficit unfunded. Many ordinary people are now paying the price with their jobs, for leaving private banks to control so much of the money supply needed to keep the economy functioning properly.

    Traditionally banks regarded 8% as the minimum reserve ratio they should work at. That is that they should not advance as credit more than twelve and a half times their reserves. Before the credit crunch some banks were advancing more than ten times this amount. There should be a statutory minimum reserve ratio.

  • Comment number 32.

    The government should not so heavily interfere with any industry. It should only steer a little bit and make sure that all the laws and regulations including banking regulations are adhered and if needed changed. Also the government should make sure that the taxes on bonuses, shares, etc are paid.
    The banking companies themselves should not pay bonuses according the amount of money an employee generated but how it was done and particularly how safe. The company should discourage rogue banking.

  • Comment number 33.

    Why should bonuses be capped, if people in any industry are deserving of them? I work in a bank myself, although not on an exorbitant salary sadly. Standard industry practice is not to pay overtime, and I have worked out that I do over 7 weeks unpaid overtime in a year. Why shouldn't the mechanism exist to remunerate me fairly for this?

  • Comment number 34.



    £2500 bonus cap shows how totally out of touch the Lib Dems are, or that they have developed a habit of saying absolutely anything they lack to gain votes. Such a cap would devastate the financial services market in the UK and hundreds of thousands of jobs would be lost, tax revenues plummet by tens of billions and taxes increased drastically for the remainder to pay for the shortfall and the Lib Dems other vote-craving giveaways.

    This is probably the worst policy I have seen in this crazy populist election.

  • Comment number 35.

    The HYS page is once again green with salary envy. It makes no difference to my life what anyone else earns.

    What are people going to do when they read this published list of bankers earning more than the prime minister? It is completely pointless.

  • Comment number 36.

    At least Mr Clegg is on the right lines, but I'd like something a bit more draconian.

    Why not levy the banks on their average annual clearing delays and make them pay each and every account holder compensation for such delays? The longer the delays the greater the compensation. Instant transactions here we come.

  • Comment number 37.

    All this would do would make more and more banks rellocate to other countries.

    All UK parties are shooting themselves in the foot by attacking banks left, right and centre as the finance industry brings in billions each year in tax revenue! Its all short term soundbites to get a vote - they would be stupid to do it in reality.

  • Comment number 38.

    After Clegg broke his promise to support a referendum on the EU constitution, how can anyone trust a word he says?

  • Comment number 39.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 40.

    Unfortunately, bonuses are here to stay. In this modern world, where greed is the driving factor for most people, offering people bonuses is the only way you get them to do anything beyond what would be described as adequate.

    However, in the banking sector, where what a bank does can have serious repercussions long after the deed has been done, bonuses need to be linked to long-term performance, so high-risk ventures that initially look good aren't rewarded before the true implications are felt.

  • Comment number 41.

    A dangerous thing. Banks are commercial organisations like retailers and manufacturing outfits. Government interference in how they run their business and reward their employees stinks just a little of communism.

    Enough on "greedy bankers". What about greedy supermarkets? Greedy electronics firms that make vast profits through consumer naivety and gadgetmania; what of energy companies too ready to raise prices when the oil/gas price rises but never revert when it goes back down? And why isn't this bonus cap applied across all industry?

    Government intervention has got to stop. Bnaks: all this drama about holding people's savings hostage is ridiculous. Simply reinstate the capital adequacy regulations of 30 years ago and people's deposits will be relatively safe. And while they're at it, stop banks borrowing short-term in the Money Market to fund long term lending. Make them revert to using the Money Market to balance their books at the end of the day and that's it.

    So the way I'd change the British arm of the banking system is to reinstate the type and extent of regulation enforced by the Bank of England 30 years ago. And make sure that NO financial instrument can be bought or sold until the regulator (B of E) fully understands the product, can reasonably calculate the risk and can penalise banks who try to cheat or supply false information.

  • Comment number 42.

    I assume those who call for banker's salaries to be capped (and even those who call for a national maximum wage) are too young to remember the 1960s and 1970s and the income policy laid down by govt then.

    Income policies do not work - never have and never will unless you want to live in a communist dictatorship. There is always a way round them.


    Capping bonuses is a silly idea, all that will happen is fixed salaries go up which lumbers banks with even more costs in bad times.

  • Comment number 43.

    i think people are missing something.There are only three state funded banks,two part or fully scottish incidently .Only they can have government bonus schemes possibly imposed on them.So lib dim Nick Clegg can spout his left wing clap trap as long he wants,there is NOTHING he can do about private banks paying whatever they want.Only the shareholders can vote it down if they do not like it.So get it the real world Cleggy ,just because your only hope of power is a lib/lab pact dont think it gives you the right to spout this total baloney

  • Comment number 44.

    Once again, the Lib Dems seem to be talking sense. Big bonuses seem to be gained by taking huge risks; if you succeed and make a spectacular profit, you earn a huge bonus. If you fail, the people have to cough up to stop the banking system collapsing and you still claim a slightly smaller bonus anyway.

    I didn't think Clegg was up to it, but the more I see of him, the more I like him, especially in the sensible policies his party is producing and in the way he handled the odious Mr Paxman. Cameron without the smarm!

  • Comment number 45.

    £2,500? the Lib Dems are dreaming on this one but publishing salaries greater than £198k - now that's a good one IF the bank has got a massive public investment in it otherwise the private banks are entitled to privacy because they have done nothing wrong.

    There are too many punitive proposals being banded around on an industry as a whole where a small minority got us into this mess, there should also be praise that some of the other banks has helped drag us out of this mess.

    Impartiality and all that.

  • Comment number 46.

    Until legislators develop the spine to climb from behind the weasel words that banking is a "global business, so we cannot interfere with the bonus payments", we will continue with this mess. Of course success should be rewarded but the levels of bonus payments in the banking industry shows stupefying arrogance and a complete lack of morality that ought to disqualify from office those who sanction and support them. This is the case at all times but especially now when taxpayers around the world have rescued these obnoxious people. Until the bailouts are repaid in full there should be no bonuses for any of them. If our so called "world leaders" were worthy of their name they would ensure collectively that this happpens. Oh look - a flying pig!

  • Comment number 47.

    5. At 11:08am on 13 Apr 2010, pjaj

    Spot on sir.

  • Comment number 48.

    They'd just raise the basic salary for the high flyers, who make billions for their bank each year, to compensate.

    Anyway, the Lib Dems will never hold power so its a bit like discussing something that has zero chance of being implimented.

  • Comment number 49.

    In many sales organisations remuneration is based on low basic with commission payments to reward the successful. This is also applicable in Banking. Thw suggestion of capping banking bonuses would drive a profitable industry out of this country. Lets have a bit more thought next time Lib-Dems!

  • Comment number 50.

    Trying to stick Finacial Restrictions on a bank is like trying to argue the law with a Barrister, or plain fact with a Politician.

    You may as well not bother, because they will find a way around it, after all, it is their business to do just that, and it will cost more trying to make it stick than it's worth.

  • Comment number 51.

    What goes up, must come down.

    The steeper the "up"...the steeper the "down". In the last 12 years or so, the UK's economy went up like a rocket and dropped like a stone. But it didn't drop for too long.

    You can strangle the banking industry, limit their bonuses and tax them to death. The economy will trundle along at a gentle rise whilst all the other economies in the world will be off like rockets again.

    Although it's frustrating, we have to let the banks carry on with their hunger for money. Just keep a closer eye on what they're doing next time.

  • Comment number 52.

    I would remove the right for institutional shareholders of the banks (pension funds, insurance companies and other banks) to vote at the AGM. Not just bank AGMs either - all major quoted companies, building societies etc.

    These votes rightly belong to the investors in those institutions.

    In reality both lots of fatcat bosses set up cosy deals - "We'll vote through the massive bonuses you have proposed for yourselves provided you keep propping up our share price by investing your policyholders' premiums/customer deposits in our badly run financial institution/bank. And you'll vote through our bonuses too of course".

    Let the small private shareholders decide key issues such as exec pay. And let the government encourage private share ownership rather than investment by the public through these massive corrupt organisations.

    It will never happen of course - too much vested interest at Troughminster.

  • Comment number 53.

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  • Comment number 54.

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  • Comment number 55.

    I work upto 16 hours a day in my own business, if I have time off I dont get paid. If my business does badly then I also dont get paid or get paid less.

    I used to work in the building trade, but saw this recession coming long before so called experts. I didnt want to experience same as previous recessions or have my family suffer the consequences so I took a huge risk and set up a business with a palty £3500.00, just as the banking/financial collapse was kicking in.

    For all my efforts in less than 2 years I have paid myself, contributed many £thousands in taxation and VAT, generated wealth and employment for other businesses and turned that £3500.00 into £120,000.00 of stock.

    Nick Cleggs plans would turn the UK into a Europe version of Cuba.

    Take away the incentive to create and make wealth and money and the result is you make LESS wealth and money to share.

    The top 30% ot taxpayers already contibute more and subsidise the other 70% of taxpayers.

    This policy is just so crazy.

    Its like breeding a herd of cattle and getting rid of the strongest and healthiest in preference for the weakest. Its basically economic suicide.

    Show me one country or a single species that has ever evolved and progressed as a result of the weaker being dominant.

    Yes seek a fair society, but there is nothing fair in a policy that will basically further damage our nations strengths and downgrade the best to lower levels of sustainability.

    If anything, why not introduce policys so that EVERYONE in a business, even the toilet cleaner, is entitled to a level of bonuses in line to that paid to the highest earners.

    Why this incesant DOWNGRADING, why turn us all into lower paid earners.

    Its as if Clegg & co intend to level out the economic and wages disparity with the 3rd world by ensuring we go down and not bring them up.

    Its nonsensical, unsustainable.

    I EARN my money, I have risked all for it and for this incompetant to suggest such a stupid policy idea is just beyond any intelectual sanity of worth to the sustainability of our nation and species.

    Those "obscene" people in the City pay more of percentage of his wages than the sheep millions he is attempting to seduce with his grotesque stalanist economic policys.

    The Lib Dem Policy manifesto should state.

    STOP GLOBAL WARMING- DONT GO TO CUBA- WE WILL BRING IT HERE (excluding the cigars and weather) EXPERIENCE CUBA or USSR AS THEY WERE 20 YEARS AGO VOTE LIB DEM

  • Comment number 56.

    No chance.

    The Lib-Dems can propose ridiculous measures like this because they will never have the chance to put them into practise. Neither this nor the comparably 'Soviet' proposal to house MP's in some allocated block of flats will ever be a reality.

    Don't people realise that the banking system will just migrate to some country (like Dubai) where we will exercise no control whatsoever over our finances.

    The bankers bonuses do not amount to the deficit. The Credit Crunch was caused by rampant consumerism and the work-force trying to maintain a lifestyle beyond their means by taking out loans and credit cards.

  • Comment number 57.

    Another stupid idea from Vince ,when are people gomg to wake up to the fact that he is not very clever. He is now bringing out his true beliefs which are nearer communism. He has become a mean and vindictive individual.

  • Comment number 58.

    This demonstrates why the LibDems should not be allowed near any sort of government. They have no idea how business operates. Get off the Banker Bashing bangwagon or else you will kill the City of London and give it away to another European City.

  • Comment number 59.

    The most intelligent policy of the Liberal Democrats on banks is to 'separate' the essential consumer day-to-day banking that the majority of us are forced to have for our salary; direct debits to pay utility bills to to avoid unlawful 'penalities'/EU illegal too, but allow ALL utility companies to 'fine' consumers if we don't use DDs?

    Separation of your banks' 'investment arm' from above 'consumer arm' described above will not be popular with banks who 'spot' invest/gamble £billions of YOUR expected current account salary income on the 'Markets' before it even enters your bank account? Most of the speculation on your 'expected' salary is operated by amazing computer systems?

    The reason for the recession caused by global banking collapse is that investment arms of banks was not separate from consumer arms of those same banks?

  • Comment number 60.

    Stuff the banks - There are many ways you can manage your finances without a bank account. Everyone's been sucked into paying on line direct debits etc that's what the banks want, they want to control your finances to the extent you have to rely on them, then they rip you off (they're already ripping off those that are struggling to survive). They're already trialling top-up cards to do away with cash, keep well away from it, if they ever get a foot-hold on that one, every transaction you make probably will cost you money and by then you'll have no other choice. And let's have the choice back (particularly low earners) to have wages in cash.

  • Comment number 61.

    #13. At 11:24am on 13 Apr 2010, Richard From Leicester wrote:

    "Why do people think the banks caused the crash. It was people borrowing too much and not paying it back that was the problem. The banks let this happen but so did the borrowers.

    The only difference is that banks don't get to vote but joe public does"

    No. The difference is that bankers are self-proclaimed financial experts whilst the general public have never professed to be experts in anything.
    You cannot equate ordinary peoples' financial ignorance with the failure of highly paid professionals to do a very basic part of their job properly.

  • Comment number 62.

    Its clear that the current incentives have led to public sector debt repayments being the fourth highest spending government department after the bale out. So it is very clear that we should not allow them to continue in their present form. Unfortunately the financial system that they run has the capacity to pay a lot of taxes so I don't think anything is going to change. The next bust will be just as bad as this one and we will all be the poorer for having grossly overpaid leeches as the most well remunerated people in our society. The only way to fix it is to fix the financial system itself, but no one has a clue how to do this.

  • Comment number 63.

    As ever the LibDems response is good in parts. However, the key here is to ensure the banks remain profitable and those who perform well are rewarded properly. Some ideas on this could include:

    + Shareholders get one vote to remove the imbalance of large corporates
    + No bank salary & bonus to exceed UK average wage by more than 100 times.
    + All details of salaries over £150,000 to be revealed
    + No main Director may have a paid non executive directorship
    + Credit card charges and interest rates unregulated but all interest rates in excess of 5 times base rate to be taxed at 25% as a deficit tax
    + Bank directors must retire at 67 and can stand for a maximu of 15yrs with any one bank.
    + Non Dom employees limited to a maximum of 0.5% of those on salaries exceeding £150,000.
    + Auditors period of tenure limited to 3 years and no consultancy
    + 10% of all bank staff must be "home workers"
    + Banks must employ 5% of all new employees from the long term youth unemployed (under 25yrs old unemployed for 9+ months)
    + All UK banks must have capital ratios 20% higher than minimum international standards
    + All Bank directors must hold accounting qualifications
    + Bad debt cannot be provisioned against profits and tax

    The aim being to encourage care in lending and effective stewardship.

  • Comment number 64.

    The banking industry does need regulation but a £2500 cap is not the answer the fat cats will find a away round it and regular staff will suffer.

  • Comment number 65.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 66.

    Regulation of the banking system, and remuneration and it's consequences particularly, is a complex issue. Neither Nick Clegg or anyone else is going to come up with a totally satisfactory framework quickly or be able to express it in terms that wouldn't bore 99% of the population in seconds.

  • Comment number 67.

    Thousand of people work for banks within the bankinc sector, they are not all 'bankers' the counter staff, managers, business managers, those who deal with mortgages are not bankers, they are bank employees. If a bonus is part of their terms of employmentthen they are justified in receiving this bonus.

    Banks have many different purposes, they are also businessess and as such need to make a profit. Individuals buy bank shares, in a good year their shares value rises and vice versa.

    It is grossly unfair to continually attack the 'bankers', the banks did not cause a financial crisis, it was fuelled by lack of regulation by Brown's FSA and people taking out unrealistic loans for the purpose of buying a property. Brown was warned about the potential problems and chose to ignore the warnings.

    In the case of Northern Rock, media fuelled panic led to customers withdrawing their money in much the same way that the media fuelled panic over the so called 'swine flu' epidemic led to tax payers paying for millions of unused vaccines.

    the banks that were forced to accept tax payers money are paying this back and the reluctance to lend is because so many loans required are for the repayment of debt, not a sound reason for lending.

  • Comment number 68.

    Under Bank's read capitalisim, both of which failed globally and greater than the failure of Communisim, I know what 'C' I'd prefer. My first choice would be to make all financial institutions answerable to the public in a criminal court with pulic juries!!

  • Comment number 69.

    "5. At 11:08am on 13 Apr 2010, pjaj wrote:

    I cannot see the argument that "we have to pay these high salaries and bonuses because they attract the best people".

    These are the same "best people" who ran the majority of our banks into virtual bankruptcy and had to be bailed out with our money.

    These are the same "best people" who are still in charge of the banks we now own despite their proven incompetence."

    No, they are not "the same people". The causes of the economic downturn are complex, but focused around a small minority acting on a tiny sector of the economy. Don't tar them all. They were also removed from their posts, so they are not "still in charge".

    And yes, you have to pay good wages to the people who make huge sums of money for the banks (that we then put our hands out to for tax money) who don't do anything underhand or illicit. You need to keep them if you want the Taxpayer's investment to grow.

    What do you think would happen if Manchester United capped wages at 20K a year? Would the players stay? No, of course they wouldn't. They'd be headhunted by all the other teams and Manchester United would be left with people who nobody else wants, or are no good. Even if any of these "new" players turn out to be any good, they will quickly be headhunted as well by other teams offering a darn sight more than 20K.

    Same principal applys to banks. Don't skimp on talent!

  • Comment number 70.

    I had considered a Lib-Dem vote (as I wouldn't vote Lab or Tory) but this has convinced me otherwise: Nick Clegg really doesn't know the time of day, just as he didn't know what the basic state pension is.

    1) A cap of £2500 is ridiculously low. It will harm many clerical and counter staff in banks whose salaries are barely a living wage.

    2) If you're going to apply it to banks you have to apply it across the board, surely. Why banks alone? The rationale if it exists eludes me.

    3) It's dead simple to get around the bonus issue. Just record it as "performance related pay". Problem solved.

    4) As for publishing the names of everyone who earns more than the Prime Minister that's dead simple too, the operative word being "earns". That means that most working people in the country will find their names published.

    If we're talking about what people get that's different. For goodness sake, if any top executive made such a total mess of their company as the PM has this country, then they'd be out on their necks - far from being allowed to stand for re-election! If Clegg/Cameron/Brown are so good why aren't they out there running big corporations, earning the same money?

    No use shouting "Ah, the crisis is global!" Multinational corporations function in the global economy and survive because their strategists and economists know what they're up to. Evidently the job descriptions of the parliamentary front benches list no such requirement.

    Leave the banks alone, leave bonuses alone. Unless its CEO is barmy, no company will award lavish bonuses for failure - only state-run institutions do that.

  • Comment number 71.

    Interesting. This election one of the debates seems to be about voter apathy. Yesterday I looked at a web site about it (www.ubovvered.com).
    This site and the Tax Payers Association want us all to be much more concerned than we are by the level of national debt. I found this a bit rich. We are told the banking sector is the main cause of the current ‘excess’ debt. It also seems no government has the power or willingness to reign in or reform the banking sector. They are too concerned about making powerful enemies and risking Britain’s exile into some financial wilderness. So until a party comes along that is prepared to genuinely tackle the banks, voters have little power to influence the national debt or how it is managed. If we can’t influence it where’s the sense in worrying about it?
    Maybe the Lib Dems are on the right track here.

  • Comment number 72.

    Popular choice from Nick Clegg this one, bash someone the public loves to hate.

    The problem with bankers is not the payment of bonuses, its the way bonuses are paid to all as a must-have requirement to recruit anyone of ability, and keep them.

    To go off message, 20 years ago we had a managerial disease in this country, compay cars. Always part of the job pay/perks package, argued over repeatidly in meetings etc. Companies wanted deperatly to get off the treadmill of renewing cars and fending off repeated attempts to get upgrades because someone else has had one.

    The end came when the government changed the tax system, once it was inconvenient to pay company car tax, then it became that the tax was more than the car was worth and that was that.

    If we have banks and investment houses assessed and rated on their lending (any bank found to have concelead lending to be automatically downgraded) then directors will be motivated not to give bonuses to salesmen who put the banks share price at risk by dodgy lending.

    What we need is far more transparency. If every bank, by law had to disclose the details of everyloan over £100K to an assesor we will stop incidents like Sir Fred the Shred lending £2 1/2 Billion to one russion (its all gone).

    Now that to me would be a real vote winner.

  • Comment number 73.

    Yes - I fully agree the 'bankers' bonuses should be restricted

    If they help the economy over a 5-year period, they should get a realistic bonus

    If they fail - they should be sacked, without any £ compensation




  • Comment number 74.

    I wouldn't change the banking system at all, BUT I would like to see banks audited more frequently and thoroughily for high risk behavour that puts it's customers and the general public's money at risk.

    I will reiterate that I really don't have a problem with banks giving out large bonuses if they are performing well and/or if the public/govt don't have a majority share.

    People forget that there are many banks that haven't acted as incompetently as some of the banks that have had to be bailed out by the govt. They have spread their risk more evenly across markets and have only come to grief because of the way businesses around the world are now intrinsically linked...but unfortunatley this goes against the common public view that we tarr all in a group with the same brush regardless.

  • Comment number 75.

    No, I don't agree.

    I'm not sure why bankers have to be singled out (I'm not a banker, BTW).

    Surely bonuses are up to the employer and shareholders.

    In the case of the banks which have been bailed out, the government can do something as a majority shareholder, but I don't see that it is right for them to impose restrictions on banks in which it has no interest.

    Why is it seen as acceptable for a banker at Santander or the Cooperative bank to have limits on their bonuses (I don't know if they have high bonuses, I'm just using those as examples of banks which didn't need bailing out) just because the government chose to use our money to buy massive shareholdings in HBOS and RBS?

    If bank employees are limited to £2500 bonuses, then why shouldn't everyone else?

    I suppose the government could set bonus limits as a condition of an extended guarantee scheme, but again, that should be left up to the bank to choose whether to use the scheme and have bonus limits, or not use the scheme and not have limits (as long as customers can know whether the bank is in an extended guarantee scheme)

    Also, members of the public already have a say. You can choose which bank to use. If you don't like bankers getting big bonuses, choose a bank which doesn't pay big bonuses. It's quite simple.

    (NB - the big bonuses only generally go to investment bankers, not to the employees of the 'consumer' part of the banks)


    (PS - I personally don't like bonus culture, so I wouldn't be too upset if there was a country-wide limit of £2500 per employee per year bonus. My problem is that I don't see why bankers should be singled out as a special case)

  • Comment number 76.

    I'd not cap any bonuses. However, by law, bonuses would only be used to reward success and not failure. If any organisation pays bonuses when that organisation is failing, a 90% tax will be applied to the organisation and 66% tax applied to the receiver.

  • Comment number 77.

    The Lib Dems have it spot on but the reality is that it will never be imposed.

    I would like to vote Lib Dem but I cannot agree on their pro-Europe, pro-immigration policies so like many others, will not be voting for them and once again, I feel their chances of power are very slim.

    The Tories just cannot wait to get their snouts in the taxpayers trough and have many friends who work in the City so they will not impose tough rules on these arrogant and vile people despite what their pre-election sales pitch is trying to convince us of - its all a smoke-screen to try to convince us that they will do something about it but look and listen closely and you'll see its the usual Tory spin with no action for the voting public. The Tories, once in will be as sleezy and as corrupt as they were in the 1980's - 1990's.

    Labour deregulated the banks when they came to power and have had since the collapse of these banks some 18 months ago to change things but havn't - this is just incompetence on top of incompetence.

  • Comment number 78.

    8. "The Greedy Bankers' are above the law, They can closed down any small business, without a reason and make anyone homeless in the U.K.


    How does that work then?

    I'm not sure how they could close down my business. We don't have a loan or overdraft, so even if our bank decided they didn't like us any more, we could just move to another bank. There are ethical banks around, so they would be happy to have customers who have a positive balance.

    Banks would also have trouble making just 'anyone' homeless. Lots of people don't have mortgages, and most of those who do could easily rent somewhere if their mortgage was foreclosed (not that foreclosure is even possible in the UK if the payments are up to date).

    Yes, some businesses, and some people are relying on the beneficience of bankers - but is that wrong? Why should it be a human right to be able to borrow whatever money you want? If you borrow money, you are in debt (literally) to the lender, so they have some power over you. In the UK that power is very limited if you go through a proper bank.

  • Comment number 79.

    Is it me? Or is everyone missing the point?
    Why pay bonuses to anyone simply for doing what they are employed to do?
    If they don't like it they can leave and find another mug to pay them. Let us not forget - the basis of ALL banking is that we allow them to use our money for a while. If a profit is made from this, it can go to reduce bank charges - BEFORE anything goes to shareholders, and as a shareholder as well - I resent bonuses being paid contractually whilst the value of my investment has shrunk tenfold over the last 18 months. I know shares are risky, but compounding the losses by paying bonuses to employees is beyond the pale.
    I for one do not agree with anyone in any job anywhere receiving a bonus EXCEPT in exceptional - and not contractual - circumstances. You take a position at an offered salary - if yo don't like the salary, don't take the job. To offer contractual bonuses is just a joke. So I would go further than Mr Clegg - No bonuses to Bankers - full stop. At least not a penny till they have repaid us our billions, and then greatly controlled thereafter. I don't care what their employment contracts say - we own most of them - WE should decide.

  • Comment number 80.

    The Government should never tell a private company how to run it's business. Once the banks are back as private companies the government should step back. I don't like the meddling attitude of Vince Cable.

  • Comment number 81.

    Nick Clegg can promise what he likes. He'll never be in a position to implement any of his policies.

  • Comment number 82.

    Oh please, they will just use their expense card with even more abandon....a bit like MP's really.

  • Comment number 83.

    Cuckoo! Cuckoo!

    Nick Clegg - Leader of the twinky-twonky party!

    £2.5k bonus!!!! I get more then that and I'm a telephone engineer who gets his hands dirty for a living.

  • Comment number 84.

    Yes - I fully agree with Nick Clegg

  • Comment number 85.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 86.

    1. At 09:57am on 13 Apr 2010, ziggyboy wrote:
    "It's about time standard salary and bonus rates were introduced and people only get paid the going rate. This works perfectly well in othr sectors so why not the banks. If these people can't put two and two together they shouldn't be in the job."

    So who is going to decided what the 'going rate' is in the banking sector? Many would argue that the 'going rate' is exactly what most people in banking currently get.

    Most of the traders and investors don't earn huge salaries, but make up for it bonuses. So how do you decide how big a bonus someone should get? Put yourself in their position...if you'd just made an investment/trade that's pulled in MILLIONS for your company, are you going to be happy getting a £1000 for it? Of course you wouldn't, and why would you? That's the reality of banking, a canny trade here and an investment there, and suddenly you've netted millions.

    I agree that IF a bank is MAJORITY owned by the public through a govt bail-out or if they have performed poorly, then they shouldn't be giving out big bonuses...BUT if the bank is wholly private and is performing well it's not for me or anyone else to say what they pay their employees. The ONLY regulation I want to see on banks is for them to be monitored more closely and thoroughily for high risk behaviour that put's it's customers and the general public's money at risk.

  • Comment number 87.

    The LibDems are the only party i'd trust with anything especially the economy.

  • Comment number 88.

    Bankers are manipulating financial instruments fraudulently every day, they ought to be robustly policed.

  • Comment number 89.

    I work in the financial sector (not in a bank) and I still support the Lib Dems. We should be clear though that the £2.5k cap is window-dressing because there are so many ways around it. The banks can, as a crude example, simply increase salaries and other benefits to make up for "lost" bonuses, in turn driving up salaries (and tax revenues of course) in other areas of the economy. Higher inflation, anyone?
    That said, the Lib Dem plan to take the first £10k of earnings out of tax wins the argument easily for me and is by far the fairest way of shifting the tax-burden away from the low-paid. I'm amazed Labour haven't done that already, but Gordon does love his tax-credit tinkering.

  • Comment number 90.

    Leader of the Lib Dems, Nick Clegg, has said cash bonuses for bankers should be capped at £2,500 a year while board directors in financial institutions should never earn extra payouts.

    To make up for loss of incentive for wealth creation Nick Clegg and Lib Dems will be setting up a new agency to monitor both ends of rainbows watching out for sparkly goldy bits. A special unit will also be set up to gather as many 4 leaf clovers and national observatorys will be utilised to look for fairys with the teritorial army on standby to capture and collect them for purpose of government use of 3 wishes.

    The unemployed will also be utilised and provided with metal detectors to seek out and find magical jeanie lamps.

    I have an idea for Nick & Lib Dems to get loads of money to pay off national debt and give every 10 year old a Mars bar

    He could dig up graves and re-cycle any gold teeth from corpses, which have more life in them than many of his partys economic policys/ideas.

  • Comment number 91.

    Get rid of fractional reserve banking (AKA the FIAT system) and replace it with a sensible, not parasitic system for small business's with a good business plan to loan sensible amounts of money for a sensible period of time. At the moment all business, government and families are in a state of perputual debt, where we have all become slaves to the corperate elite.

  • Comment number 92.

    Hmm, banking system? Separate consumer banking from investment banking to avoid another banking catastrophe that LibDems advocate? Or is that too obvious?

    No, not decided on my vote, but very afraid of Banker Nanny Cons? BNC?

    While writing, still awaiting a HYS question on Conservative mandate?

  • Comment number 93.

    #1). Get rid of the fractional banking practice.

    #2). Get rid of the Central Bank and the Federal Reserve bank.

    #3). Get back onto the GOLD standard.

    The Governments of Great Britain and the U.S. should declare bankruptcy and get rid of the national debt FIRST.

    After that is done, the inflation rate will be slowed by a SUBSTANTIAL margin. There will never again be a recession or a depression.

    What's wrong with that?

  • Comment number 94.

    13. At 11:24am on 13 Apr 2010, Richard From Leicester wrote:
    What about Banks that didn't need public help?
    Why do people think the banks caused the crash. It was people borrowing too much and not paying it back that was the problem. The banks let this happen but so did the borrowers.
    - - -

    You must be new to HYS. No one here is interested in a balanced opinion of what happened!! THey are only interested in blame and no one is going to look at themselves for that


    26. At 11:37am on 13 Apr 2010, SherryShamsi wrote:
    How would you change the banking system?
    By nationalisation....
    - - - - -- - - - - -
    The problem here is that governments are terrible at running anything! NHS? Teaching? Police? Civil Service? WSocial Services? what has this government run well? Many of these people have never worked in business either. All we'll do is exchange the obsence amounts of money made by the banks for obsence amounts of waste from the government.

  • Comment number 95.

    37. At 11:59am on 13 Apr 2010, unounos wrote:
    "All this would do would make more and more banks rellocate to other countries.

    All UK parties are shooting themselves in the foot by attacking banks left, right and centre as the finance industry brings in billions each year in tax revenue! Its all short term soundbites to get a vote - they would be stupid to do it in reality."

    Absolute nonsense. There is world-wide condemnation for what the banks have done so fail to see where in the world they would set up. Governments can easily respond by setting up 'peoples banks' or re-introducing building societies but they won't because they have too many bank and corporate friends - this is the reality and this is the reason nothing will ever be done. You have to remember that these bankers have been employed to do a job which description will include making money from stocks, money markets, bonds, gilts etc. However, they have failed this on a gargantuan scale and have created financial hardship, job security, home reposession issues for the rest of us, simply because they are greedy. This is totally immoral as many of those who made these decisions are still in bank employment and are still raking in millions in salaries and bonuses but their actions have affected millions of people who have no control over what the bankers do - this must change, irrespective of the so-called billions they are supposed to make for the economy - the economy should not be putting all its eggs in one basket which sadly now in the UK is the case.

  • Comment number 96.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 97.

    So far the Tory and New Lie Bore parties have totally ignored the many Pensioners with only the state pension incomes of less than £10,000 per year and nobody from the BBC has questioned any senior politician over it. I am aged 72 and in that category so I have to pay tax.

    I therefore think in view of the obscenity of only a £2.40 per week increase for the 2010-2011 tax year in my case,
    1. The next government ofany colour should immediately exempt anyone from paying Income tax on anything less than £12,000 per year income and less than £10,000 in savings.

    2. The next Government should set up a law to force the Banks and building societies to pay out much higher rates of monthly interest on savings accounts and fixed rate bonds from which we used to be able to supplement our state pensions before they were baled out by us, the tax payer.

  • Comment number 98.

    13. At 11:24am on 13 Apr 2010, Richard From Leicester wrote:
    What about Banks that didn't need public help?

    Why do people think the banks caused the crash. It was people borrowing too much and not paying it back that was the problem. The banks let this happen but so did the borrowers.

    The only difference is that banks don't get to vote but joe public does so which one would you guess is going to get the bad end of the stick.

    All the banks benefited from the lowering of the BofE base rate, they won't have a better time to make money it's not rocket science and that's my point. Sure people shouldn't have borrowed so much but any decent businessman/woman wouldn't have lent them the money in the first place. Wanting own a home isn't a sin but luring unsophisticated people into loans they know themselves the borrowers wouldn't be able to pay for once the introductory offer ended was a sion. So the bankers did cause the crash because they weren't well run business's. Don't forget this all happened in America and the banks over here who invested in the bonds that came out of the States didn't exercise due diligence when investing in them. The question should have been raised how can the market expand so much it would have been obvious from a market previously concerned too dodgy to lend to. Capping the bonuses at £2,500 however is unrealisitic. The only way these bankers wings can be clipped is if the shareholders vote against the remuneration packages will that happen? probably not as the pension fund managers are all in the same financial services business. More regulation but you can't make a business (directors that is) that has been morally corrupt for centuries to change

  • Comment number 99.

    #69 - your argument is a joke.

    Manchester United are currently second in the league and whether you like them or not (I don't) they have been hugely successful.

    Contrast this to the banks who have held the purse strings and still brought our economy to its knees.

    If these are the experts that we need to pay so well I'd rather have Joe Soap off the street. It is a fallacy that they are talented - they are utterly incompetent failures.

  • Comment number 100.

    If these bankers are so talented at making money then why aren't they all at home making their fortune of the forex markets? The truth is that they need their employers much more than their employers need them. That's not the way round that it's works for everyone else. The status quo is that bankers are systematically overvalued. The so-called job market that pays them for their so-called talent is just as false as the booming markets that they collectively manipulated over the last 10 years. I hope that at least one bank has the courage to declare that these emperors have no clothes and pay them a more modest wage closer to what they deserve.

 

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