Daily View: Banks and their bonuses
After Royal Bank of Scotland directors threatened to resign over bonuses, commentators are discussing how the government should get involved in the affairs of the bank.
Alex Brummer in the Daily Mail calls for RBS to be nationalised and for ministers not to give in to the threats:
"If the Government has any backbone, it must call the bankers' bluff.
Alas, what is clear from all of this is that Ministers are in a terrible muddle over RBS. They want the executives to continue to compete in the global marketplace, restore profitability and start paying the taxpayer back."
The Independent leader column says the debate highlights the need for a clear decision on whether RBS would be nationalised. However, it argues that this would be uncompetitive:
"... there seems little choice but for the Treasury to let the bank run itself as if it were still privately owned, sponsoring sports teams, treating lucrative clients to lavish hospitality, taking risks in its investment banking businesses and, indeed, paying big bonuses to successful traders, just as Barclays et al are allowed to. We may not like banks doing some or all of those things, especially the obscene bonuses, and that is why we need to regulate them all as a group."
Anatole Kaletsky in the Times also calls for the government to call the bankers' bluff:
"If these people threaten to resign, the Government should jump at the opportunity to clear them off the board, with no need for compensation payments of any kind."
However the Times' editorial begs to differ:
"The uncomfortable logic is that for the taxpayer to recoup its stake in RBS, it cannot allow the bank's rivals to scoop up all the talent. If the British Government is to get its money back from RBS then it needs the bank to be functioning effectively in the marketplace. So bonuses, for now, might be a necessary evil."
Anticipating Alistair Darling's pre-Budget report, the Guardian supports a windfall tax on the bank's profits. It says the only reason RBS has survived is because it received the biggest government subsidy in history:
"All the banks are enjoying unprecedented state support and all are set to pay big bonuses this Christmas. This is unearned money; the only sensible policy is for Mr Darling to impose a windfall tax on all of the banks' bonus pools in next week's pre-budget report - and put the money towards keeping youngsters in jobs."
On the other end of the spectrum, the Telegraph says the tax would be "killing the golden goose" and motivated by political rather than economic reasons:
"Labour has re-discovered its most unprepossessing anti-wealth instincts; bashing the bankers will be an important part of its envy-driven offering as polling day approaches."
Links in full
• Guardian | Bankers' bonuses: Time for a windfall tax
• Martin Kettle | Guardian | If Labour's class war calls bankers' bluff, bring it on
• Alex Brummer | Daily Mail | Time to call the greedy bankers' bluff
• Telegraph | Bashing the bankers will not pay dividends
• Anatole Kaletsky | Times | Big bank bonuses make failure more likely
• Times | Undeserving Rich
• Independent | The Government cannot have it both ways with the banks
• David Prosser | Independent | Darling faces an impossible choice at RBS
• Andreas Whittam Smith | Independent | Nobody should resign at RBS
• Jeremy Warner | Telegraph |Should we really be gunning for bankers?