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Diamond Bob's bonus protected by Chinese boom

Robert Peston | 09:46 UK time, Tuesday, 11 January 2011

In the UK, one significant economic concern is that banks aren't lending enough to reinforce economic recovery - which is why, as I pointed out last Thursday, the government is negotiating with our biggest banks to persuade them to make new promises to increase lending to small businesses.

Shanhai's financial centre

In China, they have the opposite problem. Bank lending increased an unsustainable 19.9% in December, according to figures released overnight.

That caps a year in which lending by Chinese banks rose by around a fifth, fuelling inflation in property and in retail prices.

In China the authorities are trying to increase the price of credit and reduce its supply - though not with any great determination as yet.

Those who believe a dangerous bubble is being pumped up there won't be reassured.

Which is why, as the FT points out this morning, it matters that the latest version of the Basel lll agreement on reinforcing the financial strength of banks allows for co-ordinated international action to increase capital ratios of domestic and international banks operating in bubble economies.

In theory, this would stem the supply of credit when overheating is perceived to be a problem. But, as is the way of these things, don't expect to see the new cross-border approach become a reality for many years.

Now the Chinese boom even has an impact on the price of bankers in the UK - in that one reason why Standard Chartered, HSBC and Barclays won't cut what they pay their top people and investment bankers to any significant extent is that they are having to pay more and more to hire and retain in Asia and China.

The only British bank subject to any material interference from the Treasury in respect of the bonuses it is set to pay is Royal Bank of Scotland.

As we speak, the holder of the government's stakes in the banks, UKFI, is negotiating with RBS to make sure that the ratio of what RBS pays its investment bankers to the income of the investment bank is at the bottom end of the ratio for its rivals (though not at the very bottom).

And the government is trying to influence the pay threshold at RBS at which bankers will receive all their bonus in shares or subordinated debt, as opposed to cash.

That said, as I mentioned last week, RBS is still on course to pay not far off £1bn in bonuses for its performance in 2010 - which will stir up controversy, when it happens, because bonuses paid in shares and subordinated debt will still be lovely jubbly for the recipients.

Interestingly, what the Treasury cannot directly determine is the bonus to be received by Stephen Hester, RBS's chief executive - because to do so would be micro-managing to the extent of making RBS's board redundant (and in those circumstances, the chairman and non-executives might well have to quit).

Instead ministers are looking to Mr Hester and RBS's non-execs to show what they would see as common sense, and defer any very substantial rewards for Mr Hester for a year or two - till it becomes clearer whether he has engineered a recovery at the battered bank that would benefit taxpayers as majority owner of RBS.

No such constraints for Mr Hester's most direct rival, Bob Diamond, who has just taken over as chief executive at Barclays - and whose pay package for 2011 is worth up to £11.5m.

As readers of this blog will know, the government has concluded that there is nothing much they can do to influence bonus payments at banks where taxpayers don't have a significant stake - other than appeal to the good offices of the likes of Mr Diamond.

In a minute or two Mr Diamond will be grilled on all this by MPs on the Treasury Select Committee. It's his first public outing as chief executive - and will be the first opportunity for Barclays owners to assess whether he's worth the money.

I will keep you updated.

Comments

Page 1 of 2

  • Comment number 1.

    Robert wrote:

    "Bob Diamond, .... pay package for 2011 is worth up to £11.5m. "

    I wonder if he is paying the £5.75m UK tax that the rest of us would have to pay on such and income, or if he is avoiding most of it?

    David Cameron came up with a sensible idea just after he came to office of limiting the maximum multiple a boss can earn to 20 times the minimum payment to a staff member in the same group - he must not make this the law! This may force the pay of the lowly Barclays' counter staff up a bit! (part of my Maximum National Income Campaign.)

  • Comment number 2.

    "Bob Diamond, .... pay package for 2011 is worth up to £11.5m. "

    Thank goodness for that - I was concerned Bob might be running short.

    How is this going to end? Does anyone seriously believe that such disparity in wages is sustainable?
    It didn't work in Feudal times (without oppression) and it won't work now.

    A big thanks to all the pensioners, workers and wealth creators who paid Bob his massive salary - I'm sure he appreciates it.

    The writings been on the wall for sometime now - denial is not a solution.

  • Comment number 3.

    Just one more lie by the tories and/or liberals.

    Not sure it is the biggest one for me personally.

    At the moment the issue of petrol/diesel tax is the elephant in the room for large numbers of ordinary people. Prior to the election they talk about duty cuts and fuel price stabilisation. After the election they adopt an 'inflation plus' fuel tax escalator policy gordon brown would be proud of.

    Is there some way of calculating if this bunch hold some sort of record for pre-election lies ?

  • Comment number 4.

    Grotesque. The powerless, the dispossessed, the disenfranchised, in fact most of us, are paying for the greed and incompetence of these people. QE, taxpayer bailouts, govt cuts, unemployment, zero interest rates, devalued currencies and inflation as in UK, Europe and US, or else high interest rates, overvalued currencies, asset bubbles, govt cutbacks and hyperinflation as in Australia, China and India. All to prop up the exorbitant lifestyles of these zero output parasites. It can't last folks.

  • Comment number 5.

    'negotiating with our biggest banks to persuade them to make new promises to increase lending to small businesses'

    It is now almost 30 years since an arrogant regional manager at RBS, about to enforce the redundancy of over 100 men in the week before Christmas told me that it wasn't 'the bank's job to look after people, the bank's job is to make money: the government looks after people'.

    Well, that has coloured my dealings with banks ever since and it colours my view of the likely chances of success for government trying to imbue the banks with any social conscience. And here's the point - it really is the banks' job (and for that matter all of our large corprations) to make money and it really is government's job to ensure that they pay their appropriate dues to society (through taxation): the government must then prioritise use of that money.

    So perhaps we should encourage and allow the bankers to make profit and then tax that profit at progressively higher rates of corporation tax. We who pay income tax have a nil band, a standard rate, a 40% rate and a 50% rate. Why not the same thinking for corporation tax - all we have is the small company rate. We don't have a 'super big very profitable corporation' rate.

    And while I am at it - if we are serious about limiting excess at the top of big corporations, how about a very high (80%) tax rate on all personal income in excess of (say) 20times the lowest paid in the company

    Hmmm

  • Comment number 6.

    But if the Banks truly are international institutions competing in a global market place why is it that we should expect them to do what is best for Britain? According to the logic of global capitalism their only obligation is to obtain maximum returns for their shareholders.

    Many of the bankers receiving very large bonuses will not hold UK passports or will hold dual nationality.

    Asking Cameron and Clegg to regulate the UK financial sector is like asking the Sheffield Council to regulate the UK wide activities of Sainsburys.

    The only way to truly tackle global banks and companies is through global or multinational regulation.

  • Comment number 7.

    #2. writingsonthewall wrote:

    "Bob Diamond, .... pay package for 2011 is worth up to £11.5m. "

    Does anyone seriously believe that such disparity in wages is sustainable? "

    Answer = David Cameron!!! (but you knew that!)

    I second your view that we must as a nation reduce the growing disparity in equality of outcome in our society (big or otherwise). Indeed this must be the chief method we should use in judging the effectiveness of government.

    In short: David Cameron you have talked the talk, now you must walk the walk! (or walk the plank in four years time.)

  • Comment number 8.

    "In a minute or two Mr Diamond will be grilled on all this by MPs on the Treasury Select Committee."
    What a pity this won't be broadcast live on BBC Parliament. I thought that's what that channel is for.

    If Diamond is worth the money he won't be afraid to defend himself.

  • Comment number 9.

    3. At 10:36am on 11th Jan 2011, jon112dk

    I totally agree - the oil / petrol prices are the sting in the tail - you can convince people that bankers deserve their bonuses, you can persuade them that we need this failing financial sector, hey you can probably even convince them that all this is "their fault" and that they must have public services removed as a punishment - but one thing you cannot hide from is when the nation is crippled by rocketing fuel prices.
    The Government does it's usual trick of claiming it's under control - but they are actually making the problem worse - the loose monetary policy is hammering the pound and pushing up import prices in General - the only saving grace is oil is priced in dollars (but not for long) - a currency which is also devaluing as rapidly as our own.
    OPEC are going to cut supply - and beyond that there is going to be a new middle eastern currency. In addition to this everytime there is a minor (or major) disaster the oil price rises again.

    Meanwhile good old Bob makes money from all of this - I mean what else is pushing oil prices up to nearly $100 a barrel in a time of very low growth worldwide - has anyone actually considered the cost of oil if the world does recover as rapidly as desired?

    ....this is just oil - what about the gas and electric?

    http://www.bbc.co.uk/news/business-12161521

    Uh oh - looks like while we're doing our bit for austerity and taking pay cuts (and freezes) - the good old electricity companies are 'creating wealth' by blackmailing the needs of people. Sure the wholesale price is probably rising - but doesn't anyone remember that discount we got when the wholesale price fell? - didn't think so.

    ...however - at least the bankers bonuses are being dealt with - apparently Nick Clegg 'understands' - well thanks Nick, I understand you're just another lying politician who sacraficed his party's improving poll position in a glutonous grab for power driven by his own self centred ego.
    He will not be party leader by the next election.

    http://www.bbc.co.uk/news/uk-politics-12159898

  • Comment number 10.

    I wonder how many apostles to the temple of Bob Diamond we will get today?

  • Comment number 11.

    The tax on bonuses issue is irrelevant.

    I can remember when the top rate of tax was 95% (98%?) with a 10% surcharge on your investment income of the previous year. That would make the b...s squeal. Trouble was that you didn't have to be rich to suffer the top rate. Luckily (?) I was poor in those days and not much better now.

    You generate far more from 1p on the basic rate than 5% on the top rate, and even more from VAT.

  • Comment number 12.

    I wouldn't mind large bonuses for bankers is they suffered the risks. I think that what gets up the noses of most people is when you compare the risk/reward ratio of bankers to e.g. small business entrepreneurs.

  • Comment number 13.

    All this comment of limiting bonuses is missing the point.

    Any organisation that can afford to pay multi million pound bonuses is clearly benefiting from a lack of competition. In a free market any excess bonuses would instantly attract a raft of competitors, so forcing down fees and hence bonuses.

    The correct action for the government to take therefore is to ensure that new competitors can enter the banking market and effectively compete against the incumbents.

  • Comment number 14.

    What we need to understand is how can banks many still with financial problems can pay these absurd bonuses and salaries. A lack of competition bringing excess margins combined with weak and/or corrupt shareholders is a likely reason. No other industry pays so well that is the right side of the law. Workers in chocolate factories get to take home some of the produce and perhaps help themselves occasionally. Perhaps bankers feel the same and are only taking home some of the produce of their industry! Lets bring back some retro taxation rates epitomised in the Beatles line "nineteen for me and one for you"

  • Comment number 15.

    Perversely the people who push the "free" market the hardest exist in one of the most imperfect of markets.

    The barriers to entry into the banking / capital sector are enormous, and have been built up over centuries. Hence the large fees and salaries. Also built in is the cabal of understanding which prohibits a competitive market. A banker would accept a much lower salary if the market determined that level, but the market doesn't.

    It is wrong to isolate individuals who benefit from this as the situation is a product of society. What should someone in that position do? offer to waive the benefits / rewards offered to them for the greater good? when it is society that has put them there in the first place.

    Unless you impose global regulation on such entities you will not change anything but global regulation will not be imposed on such entities so nothing will change.

    Maybe we should accept this as a necessary evil, there will always be an unequal distribution of wealth / power. Instead of worrying about what others are doing (earning), concentrate on yourself. The blind pursuit of liquidity and self interest has led us to where we are.

  • Comment number 16.

    The Government seem to accept the bankers' argument that they know how to run their business which is so crucial to the economy etc etc and how this justifies the massive amounts they are paid. At the same time the Government is telling them to lend more, but presumably there is a reason for not lending, ie it's too much of a risk model.

    Either the bankers know what they are doing or they don't. Which is it Dave?

  • Comment number 17.

    Shanghaied???
    You have been!

  • Comment number 18.

    4. At 10:44am on 11th Jan 2011, Duxtungstu wrote:
    “Grotesque. The powerless, the dispossessed, the disenfranchised, in fact most of us, are paying for the greed and incompetence of these people. QE, taxpayer bailouts, govt cuts, unemployment, zero interest rates, devalued currencies and inflation as in UK, Europe and US, or else high interest rates, overvalued currencies, asset bubbles, govt cutbacks and hyperinflation as in Australia, China and India. All to prop up the exorbitant lifestyles of these zero output parasites. It can't last folks.”
    Each social grouping in society, has its own philosophy/ideology and interests which when taken to an extreme can lead to its own alienation. This extreme is likely to happen when that social grouping has been the ruling elite for a period for time. The current ruling elite are the wealthy and acquisitors, in effect corporate business barons, which the ruling politicians are seeking to appease as they share similar values. But in doing so the level of inequality in society is reaching heights not seen for probably 50+ years, as the ruling elite continue to accumulate an increasing proportion of the overall wealth in society. This cannot continue indefinitely, and probably only up to the point where the majority of the middle classes are living at subsistence levels, which with current levels of debt and increasing cost of commodities is probably not too far away. Economic chaos leads to mass discontent that leads to social change whether it is be peaceful or otherwise. The rise of Hitler in 1930s German is proof of that, as are numerous previous examples in history. Social uprisings don’t necessarily happen is everyones lifetime, but history proves that they do periodically, and I believe they will in the future, regardless of how modern society is or how civilised we think we are. It is inevitable that sycophants of the ruling elite, who most likely share the same values, are less likely to accept the prospects of social change or recognise the pressure building for social change as it does not serve their own interests, and therefore are likely to dismiss its existence. However, dismissing it does not mean it is not happening nor does it prevent it from happening. We live in interesting times.

  • Comment number 19.

    Cassandra

    You do not have to have a british passport or hold dual nationality to pay tax in the UK.

    If you are tax resident here and your pay and other remittances are paid here you will pay UK taxes. That also applies to dividend or rental income. It is possible to deal with income from other parts of the world using non dom status.

    You will be tax resident in the UK if you spend more than 183 days in the UK in any given year and more than 90 days in each of the last 4 years.

    If you are US citizen or permanent resident, you will also have to complete a US tax return on your worldwide income.



  • Comment number 20.

    Domestic opinion at home speaks volumes, yes I suspect a great many more will become part of the inflation proof breed with many wanabees queing in the wings. Those recipients simply feel thet they have earned these and any future payments, including all the others feeding from this trough. I've actually got into a habit when standing at the bank teller desk most of whom are female, I simply look at the wealth that adores these staff for sure most of the rings on their fingers would cut through plate glass and the weight in gold / platinum would see them paying for excess baggage! Well I might have exaggerated a wee bit, but I think you'll see what I mean. They are all doing very nicely, indeed a great deal better than some sections of society. In a sense you can see the argument very clearly when one looks around some of the pitiful sights from around the globe, pity that any anger from these places all to often hits other innocents ......

  • Comment number 21.

    Cassandra

    Just to add to the taxation comment....

    If you were awarded a bonus whilst employed by a UK corporation and it did not vest for three years and in the meantime you moved somewhere else, that bonus would still be taxable in the UK as it related to your period of UK employment.

  • Comment number 22.

    You are right Robert to point out that bank lending is going in a different direction in China to that of the UK. There is something of an irony in the UK trying to direct banks to do this is there not?
    On the subject of Chinese monetary expansion I notice that notayesmanseconomics feels the following.
    "The broad M2 measure of money supply grew by 19.7 % which exceeded the official target of 17 % by 2.7%. So we can look at this two ways firstly if we look at the level of broad money growth as an absolute we can see that 19.7% is an extraordinary level of growth for a broad money aggregate on its own flashing an amber warning light......If we use the measure of monetary growth minus economic growth we get 10.5% which turns the amber light to a red one."

    So there is a real danger of China overheating which sits oddly in a world where Portugal looks as though it may soon be joining Ireland and Greece in calling for an international rescue
    http://notayesmanseconomics.wordpress.com

  • Comment number 23.

    #14. At 11:27am on 11th Jan 2011, watriler wrote:

    "What we need to understand is how can banks many still with financial problems can pay these absurd bonuses and salaries......................"

    ---------------------------------------------------------------------------------

    It's called "Mark to Fantasy" accounting.

  • Comment number 24.

    Mr Diamion wants banks to be allowed to fail..

    Of course he does as his bank is suffering increased competition from Lloyds (incl. the walking dead HBOS) and the walking dead RBS both of these big banks should not exist according to Mr Diamond!

    But can be afford, as a country, to have just two big banks? NO! We need forty banks so Mr Diamond, if the likes of HBOS and RBS had gone under, then Barclays and HSBC would have had to been broken up - so either way you would have lost!

    The banks must be broken up so that we can get a real market in banking services for both the personal and the corporate sector.

    If HBOS and RBS had gone the economic disruption would have been immense and my guess is that all the banks would have gone!

  • Comment number 25.

    5. At 10:48am on 11th Jan 2011, hamishwashere wrote:

    'negotiating with our biggest banks to persuade them to make new promises to increase lending to small businesses'

    When you look at this - well it's clearly time to take the bankers out.

    We bailed them out (yes all of them, no distinctions between 'good' and 'bad' banks as it was a bailout of an industry - which had SYSTEMIC problems) - they owe us their survival - and now we must plead with them to lend to businesses?

    You're 100% right (well the RBS man was) - banks see their priority as making money - and nothing else. This is why they have no qualms about investing in fossil fuels and arms - who cares if your investment is used to develop radioactive shells and anti-personell mines (which kill and maim children) - as long as there is a profit at the end for us.

    Ethics? - don't make me laugh - we should treat the banks with the same distain and contempt they treat us with - any less and you're admitting you're a sucker for punishment and can find no problem with stiffing your fellow man for a quick buck.

    I shall not weep when the bankers are chased from this country and their temples of glass to the great god of FIAT money are left burning.

  • Comment number 26.

    Well, the banker bashing season is drawing to a close for another year. We can only hope that our efforts have increased their tax burdens immensely, diminished their top lines from what they otherwise might have been and further lowered their reputation.

    Well done to one and all - especially those bankers who came here to boast and brag. You have done more than we could have ever expected to damage your own cause! You have been superbly altruistic, so keep up the good work.

    To everyone else – let’s pick up again next season and really get these greedy pigs sorted out. It’s been a gas!

    Jacques

  • Comment number 27.

    During the war, there were people who bought and sold goods on the black market, goods which were in short supply and which would be considered basic essentials today. They no doubt had unique skills and talents and felt they deserved to take home massive rewards for their great entrepreneurial abilities. But it was called profiteering and was deemed immoral and illegal because it was damaging to the rest of society. Yet in 2011, you can do the same thing from a desk in The City and not only is it not prevented, it is encouraged and we are told we need to attract MORE spivs to the UK and make them pay LESS tax. How did it come to this?

  • Comment number 28.

    All this user's posts have been removed.Why?

  • Comment number 29.

    I am delighted Barclays are doing so well and their top man gets his obscene wages nothing i can do about that personally, without breaking the law.

    But, as he says he didnt get any direct help from the government, would he put into Billions how much indirect help he got and is still getting, and would he like to be the first bank to remove themselves from the depositors guarantee, on the back of his banks success ???

    They are making fools of our elected representatives, who in turn are making fools of us.If they want to drive a Ferrari bank fine by me , but they can pay the insurance for doing so we shouldnt have to pay towards it.


  • Comment number 30.

    What I don't understand is why do these people need a huge bonus to do the work anyway?Are they not self motivated with personal pride - if they are deprived of a bonus do they just lie in bed and sulk?We were told these people get the rewards because of the risk factor - well that's been blown away because they can bankrupt the western world and still get bonuses as no-one is to blame.Also are the "profits" these people are getting rewarded for sustainable or just for a quick fix?It's a game where they win and we lose.The only problem with that is that somewhere along the way we might just stop playing the game!

  • Comment number 31.

    13. At 11:16am on 11th Jan 2011, nametheguilty

    ...but can you regulate a market into being truly free? - I think not.

    The problem is that banking lobbyists will ensure their banks are treated favourably by new regulation - and thereby protect their monopoly position over any new competition - stifling it as soon as it develops.

    The free market ideology has failed, the tendency is always to grow bigger and increase your market - which always leads to monopoly. The idea that the big will fall and be replaced by efficient smaller companies has been proven to be false (they're too big to fail for a reason - economies depend on them) - and no regulation can replicate this theory, there will always be vested interests.

    I realise it's a lot to take - but forget about the free market - it works in the lab but we can see all around us - not in practice. If it did work then we wouldn't have the giant corporations we currently have and their oligopolistic, and sometimes pure monopolistic positions.

    As yet I haven't heard a single economist explain how you can solve this dilema - it's almost like they already know it's unsolveable.

  • Comment number 32.

    Robert,

    Was Diamond asked this morning about what involvement his bank/subsidiaries had in the food price bubble? Or didn't he know the answer to that either?

  • Comment number 33.

    Earlier "Hamishwashere" wrote:

    "It is now almost 30 years since an arrogant regional manager at RBS, about to enforce the redundancy of over 100 men in the week before Christmas told me that it wasn't 'the bank's job to look after people, the bank's job is to make money: the government looks after people'."

    Twas ever thus, my friend. Companies with shareholders are obliged to make money... and nothing else. What I find extraordinary is that the banking bailout was the government using the taxes it collects to pay for something it would never normally pay for (and for which the taxes were never collected).

    This is like your brother, having quit his job, sold his house and spent every penny he had on an excessive lifestyle, coming to you and asking you to pay to support him too. Suddenly you are paying for something you never planned for and cannot afford on an income intended to support your own wife and kids. Sure, this happens but nobody plans to do this from the very start. Taxation is not designed as a "safety net" for failing business so why use it as one at the expense of all of the things it WAS designed for (healthcare, education, policing, etc.)?

  • Comment number 34.

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

  • Comment number 35.

    10. At 11:01am on 11th Jan 2011, writingsonthewall wrote:
    I wonder how many apostles to the temple of Bob Diamond we will get today?

    ______________________________________________________________________

    Probably a similar number to the factually incorrect neo-marxists that call this home (and work, by the looks of it).

    That drum of yours must be getting worn out - any chance of a new tune, or is it still going to be same old, same old. I recall much of the same rhetoric during the 2010 bonus debate. Achieved a lot, didn't it?

  • Comment number 36.

    25. At 11:54am on 11th Jan 2011, writingsonthewall wrote:

    Think maybe a company law change would help sort this. Instead of prattling on about shareholder happiness as they do, then change the law to have them concerned with 'stakeholders'. Stakeholders are everyone from employees, the community where the company operates, the customers, etc.

    Might not help out directly the poor soul literally looking down the barrel of a gun, but it would be a major push in a very real direction.

  • Comment number 37.

    This morning Labour MP George Mudie said: "In the months ahead there will be hell on the streets over this!"

    Talking about the bonuses in Committee....

  • Comment number 38.

    Am getting a bit frustrating with the focus on the bonus element. We should be concentrating on reducing total remuneration. Surely many bank staff have been granted base salary increases over the last year, to help banks avoid any new bonus tax.

    If the total remuneration was reasonable, then I wouldn't care whether they got it all as salary or 90% as bonus. In fact, there's an argument that higher bonuses would reduce operational leverage as fixed costs are decreased.

    But "Bonus" is a word that sells papers I guess.

    Meanwhile, what is actually _likely_ to happen? Some policitians will make a lot of noise about bonuses (for their own ends). Those in power will not do much. They either beleive they can't or just wont. And we'll all get angry again in 2012.

    Does anyone know how total staff costs as % of turnover compare between banks. Or even banks vs big law firms vs accountants? Think I need to retrain.


  • Comment number 39.

    "Barclays boss Bob Diamond has said that taxpayers should not bail out banks, and that those banks that get into trouble should be allowed to fail.

    "It is not OK for taxpayers to bail out banks," Mr Diamond told a Treasury Committee hearing.

    On bonuses, he said that Barclays "paid for performance, not for failure"."

    It will be intresting to read the blogs after a few banks are allowed to fail. The impact of this would be far greater than the additional tax we are currently paying!

  • Comment number 40.

    24. At 11:53am on 11th Jan 2011, John_from_Hendon wrote:

    "If HBOS and RBS had gone the economic disruption would have been immense and my guess is that all the banks would have gone!"

    Spot on John - ideally we would have let those two fail - but anyone who tries to split Barclays (and others) away and create the impression of 'well managed banks' and the converse - simply don't understand how banks work.

    I mean it was only after the credit crunch that most insititutions started to look at their issuer risk - that's where you see how many of your instruments are issued by the same investment bank - and if they go bust - then so will you.

    Until 2008 / 2009 there wasn't a major bank in the city who accounted for this risk.

    The people of Britain are being taken for fools - I find it hard to understand why everyone cannot see this.....although judging by this blog the vast majority of people are now clued up - we just have a few stragglers and a few who think their interests are shared by the banks monopoly - a short sighted vision if ever there has been one.

  • Comment number 41.

    http://www.bbc.co.uk/news/business-12159399

    "I think I'm turning Japanese, I think I'm turning Japanese, I really think so."

    So that's why the markets are in a good mood today despite all the bad news. Oh how fickle, easy money and they're happy.

    Here's news though, a few hundred million quid aint enough.

    Also, from the Beeb website;

    "Barclays boss Bob Diamond has said that taxpayers should not bail out banks, and that those banks that get into trouble should be allowed to fail."

    Hypocrite! Maybe they should be bailed out by investors in the Far East instead eh Bob?

  • Comment number 42.

    Bob Dimond says:-

    "No bank should be a burden on the taxpayer - we have to make the system safer," he said.

    Mr Diamond also said his bank was committed to lending more to help the the economic recovery in the UK, but he would not give any figures when pressed.

    "In 2009, we lent £35bn more [than the previous year] and in 2010 we lent £35bn more again in the first nine months alone," he said.

    "Lending is what we do. We like to lend."

    But he said the bank needed to lend responsibly, with proper risk management in place. Lending too freely had contributed to the financial crisis, he added.

    This is the type of sentement we want to here; now all we need to see is it delivered!

  • Comment number 43.

    Remember those documents Barclays stopped the Guardian from publsihing?

    Here's the quote from their web page

    'A commentator to the Financial Times stated:
    I was lucky enough to read through the first of the Barclays documents...
    I will say it was absolutely breathtaking, extraordinary. The depth of deceit, connivance and deliberate, artificial avoidance stunned me. The intricacy and artificiality of the scheme deeply was absolutely evident, as was the fact that the knew exactly what they were doing and why: to get money from one point in London to another without paying tax, via about 10 offshore companies. Simple, deliberate outcome, clearly stated, with the exact names of who was doing this, and no other purpose.'

    This is so in the public interest, we can not let this continue and it can not go unpunished.

  • Comment number 44.

  • Comment number 45.

    #26. Jacques Cartier wrote:

    Well, the banker bashing season is drawing to a close for another year... Well done to one and all - especially those bankers who came here to boast and brag... let’s pick up again next season and really get these greedy pigs sorted out. It’s been a gas!

    Brave words, Jacques, but they amount to nothing more than a pre-emptive admission of defeat.

    If you think it's all over then you should at least admit and accept defeat like a man.

  • Comment number 46.

    26. At 11:58am on 11th Jan 2011, Jacques Cartier wrote:

    "To everyone else – let’s pick up again next season and really get these greedy pigs sorted out. It’s been a gas!"

    It may interest you to know that the pressure is telling. We had a memo today regarding the situation with 'banker bashing' - a security alert telling us to be vigilant because concerns about 'reprisal attacks' and to ensure we don't let people into the building we don't know.

    There is concern brewing in the city - they calculated on this all having blown over by now, but it's still going - and they are truly concerned by the depth of anger being shown.

    ....and as we saw from Mark Kennedy - the problems are not all on the outside, some people actually do put morals and ideals before duty.

  • Comment number 47.

    27. At 11:58am on 11th Jan 2011, davidbrent

    Excellent - another very good point.

    One man's "wealth creator" is another mans profiteer.

  • Comment number 48.

    30. At 12:06pm on 11th Jan 2011, Ex Sky

    What's the going bonus for an oil rig worker? - I mean that's real risk taking, but I am pretty certain it won't be comparable to bankers rewards.

    Maybe the solution is in the problem, bankers want huge pay, but we don't feel it's deserved for the level of risk they are facing. Maybe if they have to run the gauntlet through a tirade of bottles and bricks each morning then we can provide the 'risk element' they need to justify their rewards.

    ....of course some won't make it - but then I guess that's 'survival of the fittest' isn't it? - surely the free market supporters won't see a problem with that.

    This way they can keep their bonuses - and deserve them, and we can vent our anger at their mocking. No new laws required - just 'looking the other way' on some existing ones.
    I'm sure the police will be happy to engage in this - I mean they're all going to lose their jobs too thanks to the unchecked greed of the city.

  • Comment number 49.

    32. At 12:09pm on 11th Jan 2011, copperDolomite wrote:

    "Robert,

    Was Diamond asked this morning about what involvement his bank/subsidiaries had in the food price bubble? Or didn't he know the answer to that either?"

    What bubble? - I see no bubbles here (telescope to the eyepatch)

    Move along copper - or we will fit you up with some ropey 'undercover' evidence...

  • Comment number 50.

    I believe that the banks should pay even larger bonuses to their "talent". Our politicians should be commended for all of their spending plans as well.

    I feel so ashamed of what we have created in the world. A world where everybody is opposed to everybody. Where working and paying tax contributes to the continuing deaths of Iraqi, Pakistani and Afghani civillians (Yes, that means that if you work, you support the killing of innocent men, women and children.) and to our corrupt political systems and the maintenance of the status quo.

    Let's all have a go at the bankers, let's stir up society in to a hate filled frenzy, then let's go and riot. Destroying the City of London will be such a blast. Then we can guillotine all of the politicians and while we're at it, we might as well guillotine the Saxa-Coburg Gotha family at the same time.

    The last acts in a failing system are to loot it. Perhaps we need to be looking for future equitable systems that prevent corruption rather than encouraging it.

    If the banks and politicians continue with their current dogma this society is finished, maybe we need to encourage our banks and politicians to be even more irresponsible and then we can herald in a new paradigm.

  • Comment number 51.

    #30. At 12:06pm on 11th Jan 2011, Ex Sky wrote:
    "What I don't understand is why do these people need a huge bonus to do the work anyway?"

    ---------------------------------------------------------------------------------

    More to the point - if they already have enough money to buy anything and everything they desire what good is acquiring even more? What in hells name do they want to buy, the moon, the sea, the Government?

  • Comment number 52.

    #46 - WOTW;

    "a security alert telling us to be vigilant because concerns about 'reprisal attacks' and to ensure we don't let people into the building we don't know."

    --------------------------------------------------------------------------------

    Better make sure you wear a big badge letting the protestors know who you are then. Given your certainty that the protests are coming, which I dare say they are, there'd be an almost delicious irony if you found yourself physically confronted by those you claim to have converted to The WATWOTW...

    Wonder if you'd so quick to be scornful of the police and TSG if that were to the case? Given your stance on "hypocrisy", I imagine you'd be spurning all assistance from them?

  • Comment number 53.

    Oh, and here is some other than WOTW talking about Revolution. From Princeton, no less!

    'Taxpayers across the EU must have the sense that they control what they owe – and that they will not be held responsible for the mistakes and frauds of the unholy alliance between irresponsible finance and irresponsible government'

    http://www.project-syndicate.org/commentary/james48/English

  • Comment number 54.

    So much for telling the truth

  • Comment number 55.

    #50. At 12:37pm on 11th Jan 2011, SimplySimon wrote:

    "The last acts in a failing system are to loot it. Perhaps we need to be looking for future equitable systems that prevent corruption rather than encouraging it."

    ---------------------------------------------------------------------------------

    Agree entirely, some of us are looking. The trouble is the present incumbents doth protest and cry "Revolutionary" at anyone who dares to suggest alternatives. Their reactions are the attitudes of the oppressed fed the "neoliberal is normal and be thankful" line from birth yet they can't, or simply refuse, to see it. They're Ragged Trousered Philanthropists and proud of being exploited because "It is the way of things."

    I hate the following buzzphrase but it is so succint in these circumstances "Think outside the box."

  • Comment number 56.

    WOTW

    If you need to know how "clever" smith-cw is take a look at my post #217, on Roberts last Blogg. Are these poeple real???????

    #27 DavidBrent; Great post couldn't agree more, the banks would of course argue that their position is unique in society and that is why they could and should not be allowed to fail.

  • Comment number 57.

    44. At 12:23pm on 11th Jan 2011, copperDolomite

    Bank does wrong
    Bank employee leaks information (because he has a moral duty)
    Law helps bank cover up the problem by impeding the right to free speech

    Now which part of this isn't a reflection of a fascist society.

    "Fascism should more properly be called corporatism because it is the merger of state and corporate power." - Benito Mussolini.

    ...but then what would he know - he only 'invented' modern fascism!

    The people of Britain are truly sleepwalking - although it was refreshing to see last night on newsnight and elloquent and well spoken 'tree hugger' make the same point exactly. I know now that not everyone is standing by and watching this happen.

    In addition to the ex-undercover officers claim that "there are more undercover officers - and undercover private security guards infiltrating groups like these" - it's a real siren for us all. I mean at least the police are accountable - who are these security guards working for?

    It's a little undermining for those who show their false horror at fire extinguishers being thrown from rooftops - I mean was it a student, anarchist or a serving officer of the MET acting as agent provocateur?

    Oh how the sheeple suck up the lies - there are a lot of scared people out there who will accept any truth that makes them feel better.

    "oh it's anarchists infiltrating student protests" - if only life were that simple....

  • Comment number 58.

    I see the mindless bank supporters are light in number today......did anyone hear a buzzing sound?

    Someone swat that irritating fly please, we all know flies don't produce anything, have very little use and are parasitic in nature.

    They also like to hang around a certain brown stuff - well I guess each to their own eh?

  • Comment number 59.

    39. At 12:18pm on 11th Jan 2011, Bruce Tuxford wrote:

    “It will be intresting to read the blogs after a few banks are allowed to fail. The impact of this would be far greater than the additional tax we are currently paying!”

    Why would it?

    If you’re one of the last to take out your 5p then you may have a problem!

    42. At 12:21pm on 11th Jan 2011, Bruce Tuxford wrote:

    “This is the type of sentement we want to here; now all we need to see is it delivered!”

    So the FSA is guilty of not punishing the banks because they committed no crime or mismanagement

    But our Bob says:

    “the bank needed to lend responsibly, with proper risk management in place. Lending too freely had contributed to the financial crisis, he added.”

    Surely contradicting the FSA.

    He may not be as clever as he thinks by his choice of words. His pandering to the masses may open up a can of worms, hopefully some one in the correct position will spot it!

    i'm with the co-op what about you

  • Comment number 60.

    Many of you are missing the point with bonuses, there are only a handful of lucky chaps like Bob that get a bonus worth millions without necessarily warranting it.

    The bulk of the £7bn will go to the 100,000's ordinary folks that work for the banks doing ordinary jobs on ordinary salaries. This national tidal wave of money will quickly pass through their bank accounts into the local economy (throughout the country) to help pay towards a new kitchen, a new bathroom, a car, or a holiday etc. So it benefits the entire economy and HMRC is the single biggest beneficiary.

  • Comment number 61.

    Have been puzzling about the pathology of economic diseases.

    Bear with me and I'll get to banking, honest!

    1. Traditional economics seems to have striking parallels with pre-scientific medicine. You know, the "four humours" sort of thing.

    So, when an economic system is ill, the economists suggest ways to "rebalance" it, either by bleeding, venting or some other ill-conceived notion.

    2. Pathogens (I think they are called) are living organisms that do harm to other organisms. They either extract more value than they put in, or deliberately modify the working of the organism to benefit themselves.

    ===================
    I think it is easy to see, then, that for an economic system, or society to remain healthy, disease must be fought and destroyed. But the proposed macro- answers are blunt instruments that would chop off the arm for a sceptic splinter.

    QE is a blunt instrument. Bonus legislation is like a dose of antibiotics, the most robust pathogens adapt and survive.

    Perhaps what is needed is to deal with the economic disease on an individual by individual basis, like the human body does. Did this individual commit fraud? Did this judge collude with the vested interests? Is this person in a symbiotic relationship with their society or a parasitic one?

    If there are enought healthy cells, and you remove the individual pathogens from the system it will attempt to repair itself.

    CD will probably be able to tell me where the whole analogy fails. For that I would be grateful. Another puzzling moment eased.
    ==========
    I said I'd get to banking.

    We all hate the way the financial sector has skimmed society. For that we blame "bankers". But the number of over-paid parasites is actually very small. And the processes that they use, while pretending to look like "trade", are actually a mimicry of real trade.

    If, under the microscope, those "trades" turned out to be fraudulent, then the perps could be removed from the system without causing systemic shock, and the assets skimmed by those traders could be seized for redistribution by the authorities.

    Time to go and earn some more taxes...only another 200 days to go before I get to keep any of it.

  • Comment number 62.

    53. At 12:52pm on 11th Jan 2011, copperDolomite wrote:

    "Oh, and here is some other than WOTW talking about Revolution. From Princeton, no less!"

    Do you think he's been influenced by the 'leftist rantings of an envious toilet cleaner who works in a bank on an unknown BBC economics blog"?

    I am impressed with the professor - I mean using history to see what the likely outcomes are following a severe economics crisis - who would have thought of such a brilliant idea.

    (although the question should really be - which dullards didn't think of it)

    It's very in keeping with Gerald Celente's phrase - "the definition of insanity is to try the same thing over and over again and expect different results" - he of course was referring to the idiocy of US economic policy - but the same rule applies to creating the conditions for a revolution....and then not expecting one to happen.

  • Comment number 63.

    Robert,

    As readers of this blog will know - and everyone else in the UK too - the government has concluded that there is nothing much they can do to influence the fifth-rate level of customer services that banks give out to the Brits.

    http://www.bbc.co.uk/news/business-12161181

    Bet they wouldn't do that in China or Hong Kong though!

    Maybe THAT'S why the British are so outraged about the banks' big bonuses.

  • Comment number 64.

    All of this reinforces the need to split the banking industry into components that do make sense, protect the public interest, protect the national interest and allow risks that go wrong to be financially punished. I am for the market, but when the market can't work properly everyone else needs to be protected.

    As a starter for 10 split banks into the following components :-
    1. Banking Infrastructure - eg moving money from one account to another.
    2. Retail banking.
    3. Retail lending.
    4. Business banking.
    5. Business lending.
    6. Venture capital.

    Then only allow the components to merge if either they are very small parts of the market (so they can be "allowed" to fail), or there is a direct link between the components (e.g. Retail banking and Retail Lending).

    Once the banks are in their components, then it will be much easier to control them and set limits on what they can do. As it stands at the moment we have no transparency on what the real issues are, and how big they are.

  • Comment number 65.

    # 26. Jacques Cartier wrote:

    "Well, the banker bashing season is drawing to a close for another year.... "

    So when does the bank's customer-screwing season stop them?

  • Comment number 66.

    #56. At 12:58pm on 11th Jan 2011, creditunionhero wrote:
    "WOTW

    If you need to know how "clever" smith-cw is take a look at my post #217, on Roberts last Blogg. Are these poeple real???????"

    ------------------------------------------------------------------------

    You were commenting on a reply Mr/Mrs Smith posted to my blog about bank personal credit charges and profits aligned to BoE base rates. Have to say you took the words out of my mouth somewhat so didn't warrant further from me - cheers.

  • Comment number 67.

    #52 smith-cw

    The real irony would be if the Met officers confronted one of their own "undercover" officers!!!!!!!!

  • Comment number 68.

    58. At 13:04pm on 11th Jan 2011, writingsonthewall wrote:

    "Someone swat that irritating fly please, we all know flies don't produce anything, have very little use and are parasitic in nature.

    They also like to hang around a certain brown stuff - well I guess each to their own eh?"

    Actually, flies play an important part in the ecosystem as they break down waste matter that is then absorbed into the earth which in turn is what feeds the crops etc

    43. At 12:22pm on 11th Jan 2011, copperDolomite wrote:

    "Remember those documents Barclays stopped the Guardian from publsihing?

    Here's the quote from their web page

    'A commentator to the Financial Times stated:
    I was lucky enough to read through the first of the Barclays documents...
    I will say it was absolutely breathtaking, extraordinary. The depth of deceit, connivance and deliberate, artificial avoidance stunned me. "

    Keyword is avoidance and that, as has been said before, is totally legal. If there is a problem with avoidance it is that the rules have been written so badly that it allows people to identify loopholes. A simple flat tax of 20% and the removal of all allowances for everyone would solve this quite simply.

    28. At 12:03pm on 11th Jan 2011, baudolino wrote:
    "Bob Diamond may earn £11.5m this year. But - according to Lord Mandelson at least - this is considerably less than the £63m he made last year as head of BarCap when he was memorably described as, "the unacceptable face of banking". Still, that's pay restraint after a fashion I suppose"

    How many others do you know have taken an 80%, or thereabouts, pay cut?

  • Comment number 69.

    56. At 12:58pm on 11th Jan 2011, creditunionhero wrote:

    "If you need to know how "clever" smith-cw is take a look at my post #217, on Roberts last Blogg. Are these poeple real???????"

    It never ceases to amaze me the stupidity of some people, but not to worry, most of them are actually the same person. I know this because despite working in the most egotistical and money adoring industry in the world (finance) - and yet there isn't a single person who shares the same extreme views as some of those who come on here defending banks.

    Sure there is support for free market enterprise here - but they all agree that 'this isn't it' and although we disagree on the solution - none of us deny the size and scale of the problems - and we're all agreed unanimously that this Government doesn't have a hope of resolving it.

    Most bankers are currently hoarding wealth in preparation for the next crisis - another nail in the coffin of the 'trickle down theory' so often paraded by Capitalists.

    It's just like I said about wikileaks, and again with the collapse of the court case - the system is failing, and the biggest blows are coming from the inside - not the outside.....because there is a point beyond which 99% of people will not go.

    I have decided not to engage with the bank supporters anymore - they don't actually have a tangible argument, most of them have never been inside a bank and all they want to do is divert the debate into petty squabbles about 'facts' which cannot be resolved (for example I tried to prove my 'facts' with official US Government documents - but I was informed these are 'not reliable)
    Yes - I know, it's ridiculous.

    ...and what happened to Rebecca?

  • Comment number 70.

    Dear WOTW - did you watch Bob Diamond this morning? - you must be hacked off he did brilliantly & made the "anti-capitalists" look stupid, uneducated, naive & consumed with envy - a common theme amongst the Pestonites. Perhaps you & Peston can shut your computers down now and go do something useful?

  • Comment number 71.

    28. At 12:03pm on 11th Jan 2011, baudolino wrote:

    > "Bob Diamond may earn £11.5m this year.

    He spends £10m on hair dye!

    > How many others do you know have taken an 80%, or thereabouts, pay cut?

    Everybody at Lehmans?

  • Comment number 72.

    57. At 13:00pm on 11th Jan 2011, writingsonthewall wrote:

    I've not got time to dig it out of the internet but I do remember reading about a little bit of nature somewhere in England, a beautiful bird habitat. The locals didn't want some developer wrecking it, so they got themselves organised only to be met with by thugs in uniform. The locals ended up on some Police Chief National database as terrorists. Only they weren't dealing with people they could easily dismiss in the mealy-mouth, lazy press. It was a group of teachers, retired professors etc, people who could master any topic they wanted with a few books, and a day or two down the library. I think, though wouldn't swear it was a newsnight item. I'll dig it out for you tonight when I've time to search.

    I've tried getting it out of my bro' about what security jobs he could do when he gets his redundancy from the police but he's not sure (not talking, or doesn't know....) but it is going on. And has been for years.

    Seattle scared them bagless, because most of the protestors weren't hippies (easily dismissed) it was normal people from across America, and the poor from all over the third world. And they closed it down. What you are seeing is the beginning of privatisation of the police. I expect to see the use of private security firms in war soon to supplement UK soldiers. And of course, they'll have credit lines won't they? Loans from banks to buy their equipment. Whatever the Americans do, we do (government by franchise, I call it). There have already been rumblings of Blackwater offering to do UN work in Congo!

    We need to learn from how Latin America knocked this neoliberal nightmare on the head.

  • Comment number 73.

    63. At 13:14pm on 11th Jan 2011, Sutara wrote:

    "Maybe THAT'S why the British are so outraged about the banks' big bonuses."

    Very true - I mean the Europeans and Americans bailed out their banks - but maybe they aren't treated like dirt as customers - so they feel a little bit more affection for their banks.

    ...on this subject - I wonder how many 'bonuses' were earned through the mis-selling of PPI?

  • Comment number 74.

    56. At 12:58pm on 11th Jan 2011, creditunionhero wrote:
    WOTW

    If you need to know how "clever" smith-cw is take a look at my post #217, on Roberts last Blogg. Are these poeple real???????

    --------------------------------------------------------------------------------

    I'm sorry - which bit was confusing you? Apart from my typo of 19% that ought to have read 19.9%.

    I'll take it from the top for you slowly, if that would help.

    Let's say, just to make it easy for you, that a bank starts up a credit card. Two people take it up.

    Both spend £100 on their card in any given month, but while customer 1 pays it off in full after getting their statement the following month, customer 2 leaves the balance on the card (I'll ignore the concept of minimum payment for now, as that would really confuse you).

    So, by my count, that means that the bank now have an unsecured debt of £100 on their books for this month. However, they've had to fund £200 to pay for the transactions made in that month.

    If the interest rate, to make it really easy, is 18% (and yes, I know there are compounding issues, but I'm trying to keep it simple for you), then the monthly rate is 1.5%.

    If the funding cost the bank have to pay is 2.4% pa, again to keep it easy, then their monthly charge is 0.2%.

    Thus, their P&L for the month shows a gross interest income of £100 * 1.5% (£1.5). Annualised, that makes the % return 9% (against the £200 spend).
    However, they have to fund the £200 of spend at 2.4% (annualised, again), at a cost of £0.40. Net interest income of £1.10, or 6.6%.

    It's not that hard, really, and it doesn't make me clever. I can simply read. It does make me wonder whether some others can, or just find it easier to rubbish numerical examples without reading them first.

    Oh, and the 2.5% on spend you talk about - I think you'll find the lion's share goes to VISA or Mastercard - you might have heard of them? The 2.5% is the charge to the retailer, not the amount received by the card issuer.

  • Comment number 75.

    66. At 13:18pm on 11th Jan 2011, NorthSeaHalibut wrote:

    "You were commenting on a reply Mr/Mrs Smith posted to my blog about bank personal credit charges and profits aligned to BoE base rates. Have to say you took the words out of my mouth somewhat so didn't warrant further from me - cheers."

    See what can be achieved when we work together and don't follow self interest - not even the paid stooges of corporate Britain can keep up with the huge numbers of disgruntled people out there.

  • Comment number 76.

    70. At 13:26pm on 11th Jan 2011, suffolkbanker wrote:

    > consumed with envy

    For goodness sake, Capt Mainwaring, who could "envy" Bod Diamond? He's an old man.

  • Comment number 77.

    Why don't the gov't follow the lead set by the Eire gov't, withdraw all support and guarantee's from any bank that pays bonus.

    I'm sure our banks would welcome the opportunity to stand on their own feet.

    If any banks fail as a result, a few of their "high fliers" on the dole will soon bring down the costs of keeping "our best staff".

    I know its simplistic, but I doubt it will do our Credit Union any harm, were not trying to rip people off in the first place.

  • Comment number 78.

    '58. At 13:04pm on 11th Jan 2011, writingsonthewall wrote:
    I see the mindless bank supporters are light in number today......did anyone hear a buzzing sound?'

    Monbiot noticed the number of paid people writing comments over at the Guardian too.

  • Comment number 79.

    Did someone not flush? - who let all the flies in?

  • Comment number 80.

    68. At 13:20pm on 11th Jan 2011, yam yzf wrote:

    Can you please read the article. Thanks

  • Comment number 81.

    It all goes back to the "Implied" £100 billion annual support from Uk taxpayers to the banks.

    If tax's from the UK Merchant banks is greater than this, there might be an argument for keeping the status quo .If the tax's are less than a fundamental change in our banking structure is required.

    Another banking crisis will happen again (Probably another Asian crisis) within the next 5 years , the UK taxpayers need to be protected to avoid another bail out.

    The answer is split the retail from the merchant banking, I appreciate its extreme but it is the only real solution.

  • Comment number 82.

    On the other hand, I suppose he'll be able to buy himself a gold plated artificial hip!

  • Comment number 83.

    #66 northsaehalibut

    Noted.

  • Comment number 84.

    It's a little undermining for those who show their false horror at fire extinguishers being thrown from rooftops - I mean was it a student, anarchist or a serving officer of the MET acting as agent provocateur?

    ................................................................................................................

    Correct WOTW, it was a young student, it looks like he is going to prison, His mum was in the paper yesterday, broken hearted of course, real people caught up in a real mess, exploited by both the left and the right, shame, he looks a nice lad.

  • Comment number 85.

    Just to add to the frustration felt by many of us that we still don't know the 'ins and outs' of the banking crises every time we got to a point where a crucial question was asked this morning and a forthright answer looked forthcoming the plug was pulled by both BBC and SKY for some unimportant news event like yet another MP pleading guilty to fiddling expenses.

    No matter how good the reporting it cannot make up for the detail and attitude of the people doing the questions and answers for this can tell more than a thousand well written words.

    How many times can the general public have access to people like Mervyn King and Bob Diamond and yet we are constantly cut off in mid stream when it starts to become really interesting.

    There is still much we don't know and this only feeds ignorance and judging by the lack of knowhow by some of those doing the questioning some of the answers given by Mr Diamond such as banks who fail through bad management should go down may have come as quite a surprise.

  • Comment number 86.

    72. At 13:28pm on 11th Jan 2011, copperDolomite

    What always fascinates me is the number of people who are adamant that the students protesting were in fact anarchist hijackers - but not a single one of them attended the protest.

    I was actually totally surprised to see that this was not the case - in fact I looked and looked but I couldn't find an anarchist in sight anywhere - maybe they're ghosts or have the ability to make themselves invisible.

    The plebs of this world can tell themselves these are fringe groups and radicals - but anyone who was there would know this is total nonsense.

    Now I wonder what they tell themselves about Mark Kennedy - perhaps he's one of those 'bad apples' they keep talking about and that really the police are all out fighting terrorism and not wasting valuable resources on infiltrating climate change groups.

    When the next terrorist bomb goes off this will be the first question that gets asked - funny how the 'solution' to terrorism was to lock people up for 40 days and use control orders - rather than actually ensure the resources were allocated appropriately for the threat they pose.

    ....now where is Theresa with that document laying out the police cuts - I can't wait to see the cuts coming for undercover operations. I mean the hilarity of it all is while the Government is blleding poverty - Mark was actually paying the fines imposed on other group members with the finance from the police themselves!!

    If you can't find that funny - go and see a doctor - your heart might have stopped.

  • Comment number 87.

    Did anyone hear Bob being told "I ask the questions ... you answer them!" during his grilling? He didn't appear to be over-enthusiastic about thanking the British public for our subsidy (which is worth £100bn per year to the TooBigToFail banks). The old fool's life is almost over - he devoted it to "the City" - I don't expect he'll be missed.

    But it's a shame he has to face this at his age. I almost felt sorry for him. Almost.

  • Comment number 88.

    The banks i.e. commercials banks are not the only problem the BOE are also to blame. They have deliberately set the bank rate at .5% for the longest period anyone can remember. They know this has failed to increase lending to small business, they know inflation has remained above there threasholds, and they know savers have effectively lost the value of their money.
    They could influance to a greater extent the actions of the commercial banks but they choose not to in effect there all in it together. QE should be used to pay savers when commercial banks fail not to help prop up said banks. Bob Diamond and his colleagues know by a combination of the global reach of the banking system & threats they can act like legalised gangsters holding everyone else to ransome and there is nothing we can do about it.
    However as has been said before if every single saver took their money out of Barclays overnight there would be a run on the bank and it would collapse. If this threat was used all the banks would sit up and take notice that they need systemic change. Or take it on another approach every time a banker wants surgery charge 400% more than anyone else or for any other service they use they would certainly get the message then.

  • Comment number 89.

    Well now bloggers we really are having a ball aren't we.
    At least all of this should make "the people" more interested in politics. If so which way do we bloggers wish them to lean. Free market economics, libertarian, anti-European, sustainable, big society, and other such meaningless drivel? Or how hard you work is related directly to the lifestyle you can have? It's the latter for me. It seems a bit simple I know.
    Some investment bankers are paid too much money. Some premiership footballers. So are certain media folk. Some royal family members. So are local council chief executives. Some on benefits who shouldn't be.
    Some people are not paid enough. People who clean out the sewers for instance. People who risk their lives for others.

    It's not the politics of envy. It's the politics of fairness.
    It's not the politics of socialist dogma. It's the politics of practicality.
    It's not the politics of disestablishment. It's the politics of realism.

    Oh and by the way. When UK business is striving to deal with record commodity prices, inflationary pressures on overheads, downsized markets why are you still writing about banking bonuses Robert? I was hopeful that starting with Chinese growth as a subject held an opportunity for us to discuss the exchange rate, the commodities the Chinese control, low product quality etc, sadly not.

  • Comment number 90.

    70. At 13:26pm on 11th Jan 2011, suffolkbanker wrote:

    Diamond did well did he?

    'Curiously, Diamond not taking opportunity to apologise to shareholders for slashing dividends'

    'Diamond simply won't agree there is any tradeoff between bonuses and dividends.'

    'Diamond says prime minister and chancellor haven't asked him to show restraint on his bonus'

    'Gripping exchange between John Mann and Diamond on how Barclays pumped up bubble to generate bonuses'

    'Mann: will you agree to take no bonus this year? Diamond says too early to make decision coz he hasn't been offered one yet'

    'Diamond - Why would the UK not be proud of having one of the world's best investment bank located here?'

    'Diamond won't answer why bankers need bigger variable pay or bonuses than other industries. Mudie filleting Diamond on this'

    'Diamond - it is hard to give specific targets for small business lending because of the risk management issues'

    'Diamond says shareholders haven't asked for specific info on this year's bonus round. Tyrie bemused'

    'Jesse Norman asks Diamond whether he would have done job for nothing? Diamond says that was not his decision to make'

    'ex Barclays banker Andrea Leadsom says Diamond in denial about extent of support from taxpayer - calls Diamond emperor with no clothes'

    Didn't look like that to me and other's publishing proceedings.

  • Comment number 91.

    76. At 13:31pm on 11th Jan 2011, Jacques Cartier wrote:

    "For goodness sake, Capt Mainwaring, who could "envy" Bod Diamond? He's an old man."

    More money = less sense. I don't envy Bob at all, I'd rather have my brains, my looks and my personality than all the money Bob has.

    ...although it would be nice if the 5 beggars I saw on my way to work this morning didn't have to sleep on the streets because 'uncle Bob' wants to expunge himself all over his piles of cash.

  • Comment number 92.

    #69 - WOTW

    My dear old friend - I've not previously made any statement of position on bankers or bonuses - for or against.

    You'll remember my original "mission statement" - I was simply sick of seeing the since-lablled neo-marxists jumping down the throat of anyone daring to oppose them, by picking their strands apart a piece at a time and firing statistics and links left right and centre.

    My goal has simply been to serve up a dose of their own medicine to some of the more obvious exponents of this "art", and have therefore selected the more vitriolic posters to examine their own postings in the way they do to others. I apologise if this has led you to draw the conclusion that I'm a banking sympathiser, rather than simply someone keen to see debate being level headed and rational.

    It's pretty clear from how quickly you, Jacques and others get personal in your abuse that you don't really like the shoe being on the other foot, however.

    For the record, I completely agree that the mega-bonuses of the investment bankers are over the top in scale, and are both symptomatic and a cause of the current crisis. I also suspect that there are those guilty of calamitous errors pre 2008 who still work in the system.

    I don't believe that the "ordinary" bank worker - the branch employee or the back-office IT analyst - who make no strategic decisions, but have a contract that pays some form of bonus payment - should be the target of your venom, but few seem to be able to draw the distinction.

    However, I don't claim to have a one-line answer as to how to resolve the situation, save only to point out the futility in shutting the banking system down en bloque, or rampaging through the streets of London. I don't share your doom and gloom view of the world - I won't apologise for it, but I trust you maintain sufficient integrity to understand that people will have differing views on any given topic, and to respect that fact.

  • Comment number 93.

    Now here's an interesting guide - 14 signs of Fascism - how many can you spot in the UK today?

    http://www.informationclearinghouse.info/article4113.htm

    13 is the subject of this blog no less.

    Looking down the list - maybe we should note the ones we haven't actually seen in Britain in the last 2 years...

  • Comment number 94.

    From the man in front of me in the Shell garage this morning who couldn't pay for his fuel, to a friend of mine who is about to lose her small business due to a banks reluctance to lend, to the taxi driver I spoke to at the weekend who told me all he hears about these days is that people are broke and are all disgusted at bankers and their bonuses, to some of my colleagues being given their notice due to the current financial climate......

    I have a simple question:

    WHAT ARE OUR ELECTED POLITICIANS DOING ABOUT ALL THIS?

  • Comment number 95.

    84. At 13:37pm on 11th Jan 2011, AudenGrey wrote:

    "Correct WOTW, it was a young student, it looks like he is going to prison, His mum was in the paper yesterday, broken hearted of course, real people caught up in a real mess, exploited by both the left and the right, shame, he looks a nice lad."

    2 years - well at least he didn't actually cause anyone brain damage with a cracked skull from a baton - because then he would have to wait 2 years for an internal inquiry to find that he was not guilty.

    ...and still the stooges support this corrupt and disgraceful system.

    ...or maybe he just didn't go to the right school....

    http://www.thisislondon.co.uk/news/article-23532691-public-schoolboy-drink-driver-who-ripped-cottage-in-two-gets-off-with-pound400-fine.do

  • Comment number 96.

    86. At 13:40pm on 11th Jan 2011, writingsonthewall wrote:

    I used to think the way to stop terrorism was to stop bombing them and stop telling them 'we'll run the country 'cos you don't know what you are doing'. Now I think we need to and in that we need to stop gambling with the global food supply, and wrecking the environment.

    See bankers at the bottom of that as well.

  • Comment number 97.

    70. At 13:26pm on 11th Jan 2011, suffolkbanker wrote:

    Dear WOTW - did you watch Bob Diamond this morning? - you must be hacked off he did brilliantly & made the "anti-capitalists" look stupid, uneducated, naive & consumed with envy - a common theme amongst the Pestonites. Perhaps you & Peston can shut your computers down now and go do something useful?

    Personally I don’t think he did (refer to post 42 last few paragraphs), Now we, i.e. Joe public, need a champion from government to step forward (Cable’s second coming perhaps). And we need to keep the pressure on and the topic alive!

  • Comment number 98.

    88. At 13:42pm on 11th Jan 2011, jeffa4444 wrote:

    "They have deliberately set the bank rate at .5% for the longest period anyone can remember. They know this has failed to increase lending to small business, they know inflation has remained above there threasholds, and they know savers have effectively lost the value of their money. "

    Spot on Jeffa4444 - we're reaching a point where the people of Britain cannot actually save for their futures (hence the rise of the stock market) The BoE has engineered a system where only those who take big risks (in the stock market) can keep ahead of inflation and maintain their purchasing power.

    Anyone who wants to 'play it safe' will lose their purchasing power through inflation.

    ...now what's that going to do for attitudes towards borrowing and prudence from the population?
    The banks are making us all gamblers - because they want to fleece those who missed the last fleecing.

  • Comment number 99.

    90. At 13:46pm on 11th Jan 2011, copperDolomite wrote:

    'Diamond says prime minister and chancellor haven't asked him to show restraint on his bonus'

    Whoops!

  • Comment number 100.

    60. At 13:11pm on 11th Jan 2011, doubledip wrote:
    Many of you are missing the point with bonuses, there are only a handful of lucky chaps like Bob that get a bonus worth millions without necessarily warranting it.

    The bulk of the £7bn will go to the 100,000's ordinary folks that work for the banks doing ordinary jobs on ordinary salaries. This national tidal wave of money will quickly pass through their bank accounts into the local economy (throughout the country) to help pay towards a new kitchen, a new bathroom, a car, or a holiday etc. So it benefits the entire economy and HMRC is the single biggest beneficiary.
    ...............
    You would be referring the the concept of trickle down. Trickle down is the perpetual myth (also know as the American dream) spoon fed to the masses by the ruling ‘elite’ to convince them that inequality is a justifiable and necessary consequence in achieving social and economic development; as part of their quest for enhanced prosperity. This myth allows inequality to continue to increase (between the ruling ‘elite’ and the rest of society), until inequality hits a crisis point, most likely the point at which the majority of society are spending the vast proportion of their labour derived income simply just to survive, with little in the way of spare income for non essential “enjoyment” purposes; in stark contrast to the ruling ‘elite’. At this point the masses will force a social change or revolution (could be peaceful or violent) to re-address the inequality in society to create a more equal distribution of society’s wealth.

 

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