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Goldman's 100 UK partners make do with £1m each

Robert Peston | 00:18 UK time, Monday, 25 January 2010

Goldman Sachs' 100 UK-based partners are capping their pay and bonuses for 2009 at £1m each.

For many of them, this represents a significant sacrifice. I am told that in aggregate they are giving up pay worth several hundred million pounds.

They are doing it, according to one executive, because they wanted to be seen to be exercising the restraint on remuneration which the Chancellor of the Exchequer has urged on all bankers.

That said, many executives ranked below partner will be earning much more than £1m each. Goldman did not feel it could insist they take a pay cut, because that might have damaged its ability to recruit and retain more able bankers.

Goldman will be paying many hundreds of millions of pounds in bonuses to staff ranked below the level of partner who are based in Britain.

That is incontrovertible because Goldman has again confirmed to me that it will be paying the Exchequer several hundred million pounds for its contribution to Alistair Darling's one-off bonus tax - and that tax is levied at a rate of 50 per cent of the total value of big bonuses.

Goldman employees will this week be told precisely how much each of them earned for the firm's near record trading performance in 2009.

The big British banks, Barclays and Royal Bank of Scotland, have not yet fixed the size of its employees' bonuses. However Barclays has decided that its top executives will receive 75 per cent of their bonuses - and 100 per cent for the most senior people - in staggered payments over three years.

The UK watchdog, the Financial Services Authority, is vetting all bonus payments worth more than £1m for British-based bankers. The FSA is insisting that at least 60 per cent of such payments should be deferred for up to three years.

The bankers to whom I've spoken over the weekend are still reeling from President Obama's announcement that he wants to limit the size of banks and force them out of a series of activities - hedge funds, private equity and proprietary trading - that he regards as too risky and speculative.

Bankers intend to fight the reforms, with a lobbying effort that will begin at the World Economic Forum, the annual shindig at Davos in Switzerland of business leaders and politicians that takes place this week.

"I really wouldn't assume that Obama will get this stuff through Congress" said one banker.

British based bankers say that Obama's reforms - and his announcement earlier in the month of a new tax on banks' wholesale liabilities to raise more than $100bn - has slightly lessened bankers' ire at the British government over the imposition of its bonus tax. But only slightly.

"With regard to Darling's tax, the way I would put it," said one banker, "is that it is like finding out your wife has been having an affair. You forgive her, but you never forget."

This weekend, Alistair Darling confirmed - in an interview in the Sunday Times - that he is profoundly unenthusiastic about President Obama's plans to break up banks and limit their size.

Comments

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  • Comment number 1.

    Thanks Robert, wondered how I was going to get off to sleep tonight. No one cares about this topic anymore because we cannot do anything to prevent it.

  • Comment number 2.

    Capped pay and bonuses at (a mere) 1million.... a significant sacrifice. REALLY?
    I would accept that deal any day and would not mistakenly call it a sacrifice, in case I was lynched. But then again, I work for the NHS. That other great institution, where the public are told they do not get value for money...

  • Comment number 3.

    This article needs to be on the front page. Limited to one million. I knew I was poor but this article has made me realise just how poor compared to the banking world. give us a job!

  • Comment number 4.

    The news about Darling's position is depressing.

    I think we can say that within the UK Govt there is:
    a. no real understanding of the sort of drastic measures required to solve this problem, and
    b. no understanding of why their present proposal is so inadequate.

    It is only Obama so far who can see the scale of what is required and who has had the guts to do something sensible about the problem (....let's thank Paul Volcker for this).

    As Paul Mason has highlighted on his blog, the UK Govt position thinks there is just one trick in town - a bigger capital cushion required if you, Mr Banker, want to do this, a bit more cushion if you do that... etc etc. i.e. the whole problem solved via capital ratios.

    Darling simply cannot see why this won't work!

    Hopefully someone will tell him sooner rather than later the reason, which is.....

    .... that his solution relies entirely on us, the people, trusting the bankers and the banking regulators to do their job properly in working out this ratio and that ratio, and counting this type of risk as this and that as that and believing that the answer they come up with means anything at all (.....and is not the answer they first thought of in the first place?).

    Can they not see this, that we just DON'T TRUST BANKS AND BANKING REGULATORS ANYMORE to arrange things adequately, left to their own devices!

    The only way to recover trust is to open the system up to public scrutiny, to create many more clearly examinable lines between all financial institutions, and to remove the confusion in the public's mind about what financial institutions do what and therefore which ones they feel they should/can use themselves.

    A solution which is based on Volcker's Plan, which includes asset limits for any organisation, and which includes a transaction Tobin tax (where "capital ratios" are consigned to a subsidiary more minor role), sounds like one that will be seen to do the job.

    PS You mean 'hundreds of millions' in your fifth para. Not even Goldman's is going to be paying out hundreds of billions of pounds in bonuses.

  • Comment number 5.

    The banks know that any regulation can be undermined if it is not brought in everywhere, by all countries. The banks thought that their lobbing influence over the American legislature was strong enough to see off any real changes to the way they wanted to do business globally but Obama's comments have caused them to re-appraise somewhat. And it may be that the President's big plans will indeed be scuppered in the committee rooms on Capitol Hill, but if not then the banks need a Plan B. Step forward our own government - whoever they may be in the coming months and even years - The financial services sector makes up a far larger proportion of the British economy than in America, and that gives the British banks much more clout over our government than is the case in America. That extra clout will be being wielded over the months ahead to lobby against and undermine the American ideas, just sit back and watch. If just one of the world financial centres won't play the game then nothing can move forward. The banking industry is not stupid, they know how to get what they want. In the end it will be our politicians, of whatever stripe, who will bend like straws and let the banks off the hook.

  • Comment number 6.

    Gawd bless them for adopting the hairshirt in these difficult times...

  • Comment number 7.

    people get irate when british airways cabin crew vote to strike yet they will not earn in their lifetime what these bankers will receive in a year.still with no incentive to work for many people the tax we need to fund the welfare state has to come from somewhere.the system has to change the question is are there any politicians out there capable of bringing us that change unfortunately i fear we all know the answer.

  • Comment number 8.

    "With regard to Darling's tax, the way I would put it," said one banker, "is that it is like finding out your wife has been having an affair. You forgive her, but you never forget."

    Hmmmm

    That's a bit like I feel about the bankers. Except I don't feel like forgiving ...

  • Comment number 9.

    "Goldman will be paying many hundreds of billions of pounds in bonuses to staff ranked below the level of partner who are based in Britain."

    No, they will not. You appear to be confusing millions with billions.

  • Comment number 10.

    Millions, Pesto, not billions.

  • Comment number 11.

    How can we make banks' risky practices riskier for bankers without hobbling the economy?

  • Comment number 12.

    Could we have some reporting please on what bankers are actually getting their bonuses for? I am thinking perhaps a couple of case histories would be nice. Thanks.

  • Comment number 13.

    1. Goldman's limits bonuses to £1m for partners.
    2. Goldman's recognises that this is not the time for 'excess' but to demonstrate some humility, and recognition of the role of financial services in the current global economic crisis?
    3. Chancellor Alistair Darling introduces 50% tax on big bonuses?
    Maybe I'm a cynic, but I would suggest the relationship between (1) and (3) is much stronger than (1) and (2). Surely this is a tool for avoiding paying a big lump of tax, to ensure the money still finds its way to partners through some other mechanism?

  • Comment number 14.

    I'm sure it is an accidental typo, but suggesting Goldmans will pay non-partners hundreds of billions of pounds is of course incorrect, careless and plays to the popular mood....

  • Comment number 15.

    This makes me furious.
    A woman who rented a room in our flat married an American who worked for Goldman Sachs over here as they were given contracts for setting up the NHS data base, which has since turned into a folly.
    Why is an American employed by Goldman Sachs living in London in a waterfront flat provided as part of his contract to the tune of £2200.00 rent. Why is the public purse over here in England being given away with government contracts to do the NHS data base with Americans afforded contracts that provide living expense perks that most of us could only dream for? Why this waste and nepotism with Goldman Sachs?
    Why Why Why doesn't BBC do expose's about all this? Where has all the money gone? Into bankers and governent sweetheart deals that UK citizens pay for!

  • Comment number 16.

    Goldman Sucks ?

  • Comment number 17.

    Can someone explain then why there is a still a shortfall on my endowment mortgage? The banks seem to be doing well - no change there - but not for the majority. Most probably its because that crisis has past away long long time ago...

  • Comment number 18.

    I'm sure the Darling Chancellor will soon be claiming this as a success - holding down banker's pay below a million a year! If that's a success then what would failure look like?

  • Comment number 19.

    lol... you can't be having a cold in banking for fear of confusing millions with billions!

  • Comment number 20.

    I think people need to wake up.

    In the year of a general election the bonus debate is a perfect distraction to allow politicians to play pantomime politics and avoid the real issues, that Britain is no closer to closing the severe social dislocation between between London (inc the SE) and a large majority of of the rest of the deprived regions in the UK. The reality is that in that UK if you wanted to earn money over the last few years and you were bright enough you looked for a job in finance probably in London, this cannot be healthy.

    The City and finance related jobs has kept the UK going for the last 20 years (the actual hard cash cash of the banking bailout in the UK is substantially less then the bonus tax will raise), I am yet to see a politician say how they are going to address the skew towards banking and finance? Brown, Cameron and Clegg where are you?

  • Comment number 21.

    This is madness;UK residents are about to incur higher tax and suffer reduced public services as a 'reward' for having bailed out the banks and kept their employees in jobs.

    All bonus payments are obscene, unjustified and fuel a culture of greed. Corporate profits belong to shareholders. Politicians everywhere should give clear directions to banks and similiar institutions that bonuses will not be tolerated and if necessary remove their regulatory permission to conduct business if they do not comply.

  • Comment number 22.

    As time moves on, government (and taxes) changes, 2011 bonuses could make up this years 'shortfall'. I expect 2011 bonuses will contain some retrospective payments as well.

  • Comment number 23.

    These bankers would not have a job if the governments had let the credit crunch run its course and not bailed them out with tax payers money.

    Why then are they getting 'bonuses'?!
    Surely any money 'made' from tax payers money belongs to the tax payer...?

    Why are they not paying all of the surplus profits the government??

  • Comment number 24.

    Some bloggers think that you are confusing billions with millions, Mr Peston .

    They maybe wrong themselves....you are surely confusing billions with trillions !

  • Comment number 25.

    Some people say that City bankers are just "overpaid paper shufflers".
    Others say that it's easy to make a billion in profit if you've got access to to a zillion in cash.
    I don't know, but it does seem that the idea of an unequal society is firmly entrenched in the minds of the financial industry.
    Most of us, including entrepreneurs, work all our lives to obtain a nice house, live comfortably, and keep a nice car.
    Many City bank employees can now reasonably expect to obtain a several mansions or country estates and a vast haul of cash, just for going to work.
    And this is an industry that's living on public handouts!

  • Comment number 26.

    I suppose for us taxpayers who are guaranteeing and subsidising this payola, we are just going to have to wait for the cheque in the post.

    When is the political class going to get some backbone?

    The real economy in Britain has been broken by these people thrice: once when they found they could get better returns speculating in debt than in commercial investment, once when they made manufacturing too expensive to survive and lastly when they broke their own financial system in 2008.

    Such self-servers are not fit to be trusted.

    If government means anything it is to protect all the people in the country. Since this and seemingly all the alternative governments in the country are behaving just like rabbits in the headlights, it is going to be left to the ordinary people to sort out this gross and seemingly perpetuating injustice.

  • Comment number 27.

    Its easy to have a knee-jerk reaction to stories like this. As far as I can see, the real question here is whether one supports capitalism, free-market trading etc. or not.

    If one does, then as obscene as the amounts quoted may appear (and they certainly do) then one simply has to accept it.

    If not, then present realistic alternatives with the hand-wringing, holier-than-thou attitude. The fact is that many of us actually enjoy the wealth that the banking industry has bought to this country. There is for example, a direct correlation between this and the massive jump in equity that hundreds of thousands of people have experienced that has enabled them to no longer worry too much about their retirement.

    The truth is that a successful financial industry in the UK leads to financial benefits for many of the population, most of whom may not realise this.

    There is of course a flip side: When the banks go wrong, many people are affected. There are job-losses, failures to keep up with mortgage payments etc. Many people experience massive setbacks in their lives.

    The difficulty is that the last year or so has demonstrated that it is very difficult to have a middle ground and regardless of which government may have been in power, they would have been roundly criticised whatever their response might have been.

    When there are no easy answers, we need to look at what we can do to control our situation. If everybody in the UK chose to live and borrow only within their means and maintain a certain degree of prudence (sorry for using that word) it would have had two effects: The boom would not have been so dramatic and the bust would not have been so devastating. To a certain extent we can still regulate the banks by our own choices. Not as much as we would like maybe, but to a certain extent.

    I honestly couldn't say what I think the government should do in response to this and I don't believe that the Tories will fare any better. It does seem vulgar to see people receiving bonus payments of £1m, the more so because some of the profit they earnt to gain those bonuses was based on security provided by state finances (primarily on the other side of the water) but as I can't suggest a realistic alternative I don't think I can complain too much. Unless people feel that a radical socialism is the way forward (and the 70s and 80s showed us that this has no future) then maybe we simply need to accept that this is the way of things, ensure we don't personally expose ourselves to massive financial risk and then put up with it?

  • Comment number 28.

    Bankers are obviously still living in their dreamworld which bears no relationship to the world the rest of us live in. By taking such obscene payments they rob the rest of us, from our pensions, our savings and our investments - and this year from our bailouts.

  • Comment number 29.

    Banks are businesses dealing with money. They attract and employ people who are entirely devoted only to money.

    They claim to need vast salaries to employ hundred and thousands of people on 7 and 8 figure incomes and salaries. These people are clearly "outsanding" in their abilities.

    In spite of all this collective "incentive" and picking the "cream" of the wolds financial minds to ensure their business' success they appear to non-banking people to be utter failures. Greedy and uninspied people who have become confused. They have confused their ability to be so chameleon like that they stick to the most slippery of poles and take that as proof of their ability. It is proof of something. Utter selfishness.

    Which is where it all falls down and why there is no point in a discussion with banks or their management. Like many in politics - there is no shame or remorse and they do not even recognise those sentiments as having any relevance. We, colectively, need to recognise that fact. They are oblivious to any feeling of being culpable or suffering from self doubt. The very arrogance and rank lack of interest in others is why they have these positions in the first place.

    There are many very interesting, creative and sharing people in the world. Don't look for them in the banking sector, however. They are just in a profession which has looked after itself even more than the law and academia.

    They pretend this is not so by portraying it as a "dog eat dog" culture and highly competitive. But it is high risk at othes expense. Not the kind of risk which most others face in their lives.

    My hope is that we can leverage our hold on them. Squeeze them and get every cent or penny fom the holding we have with them.

    We are in a strong position to make a profit and play these banks now. We can use our collective input if there is the political will.

    And we must never bail a bank out ever again. We have to allow more to fail.

  • Comment number 30.

    This Goldman's nonsense is exactly why we urgently need a Nation Maximum Wage! We can't go on with allowing such gigantic and unsupportable differences between the income of rich and poor to grow, or remain, without it inevitably leading to an increased propensity to social breakdown and revolution. We must act now!

  • Comment number 31.

    27. Deep-heat wrote:
    "As far as I can see, the real question here is whether one supports capitalism, free-market trading etc. or not.

    If one does, then as obscene as the amounts quoted may appear (and they certainly do) then one simply has to accept it."

    You're missing the main point here, and that is that the 'free market' died the day governments across the world used tax payers' money to support the banking system.

    Whether or not that was the right thing to do in the circumstances is a matter of separate debate. What is not a matter for debate is that the people of the Western world are mightily, and rightly, angry that the banks continue to act as if they are working in your 'free-market economy'. They are not.

  • Comment number 32.

    Settling for a million?! Bankers salaries are obscene. This seems obvious to everyone here but the bankers who clearly do not care that they are vilified, and appear indignant to the point of hostility when their disproportionately huge salaries are threatened.

    These inequalities harm everyone, but I still don't understand how the banking world obtained the power to screw everyone else like this in the first place?

  • Comment number 33.

    "17. At 08:42am on 25 Jan 2010, Lividov wrote:
    Can someone explain then why there is a still a shortfall on my endowment mortgage? The banks seem to be doing well - no change there - but not for the majority. Most probably its because that crisis has past away long long time ago..."

    My endowment has managed a shocking 1-2% compound growth over the last 20years. The stockmarket over that time has performed much better! If I have put it in the bank earning 1.3% per year I would be better off!

    My parents endowment paid out 3times its original prediced value, mine will pay out 1/3!

    All my investment gaines have been stolen in fees, dividend tax credit and "traiding costs".

    1% anual fees looked good and was well below average when we took out the policy (intreset rates had been around 10% for years at that time), but now look really bad!

    But at least my endowment is growing faster than my pensions! All of which are with major brands who regually appear in the times best buy tables (as for that matter did my endowment!)

  • Comment number 34.

    Have the banks "made" enough profit yet so that they will start paying tax again or are they still offsetting the gains against there massive losses from a few years ago?

  • Comment number 35.

    I note that the link to this story from the news front page, is opposite a story about a 7 year old riding his bike & raising £70k+ for Haiti. Bankers please take note! And, for the rest of us...maybe this shows there IS hope for the future...!

  • Comment number 36.

    Sorry, but I do not understand. Where, in these difficult times, has all the money suddenly come from to make the profits and pay the bonuses. Who created this wealth, at its source, that then enables a few to benefit so enormously from simply handling it, as opposed to creating it. Why and who allows this?

  • Comment number 37.

    30. John_from_Hendon

    I think you're right. The 'free marketeers' will scream and shout, but the fact there is a 'minimum wage' shows that 'society' (alright, the Labour government) already thinks there are some restrictions on a totally-free 'free market' which need to be enforced by law.

    As the gap between rich and poor has grown more under this Labour government than at previous time in history, one would have thought that they, of any political party, would be up for this.

  • Comment number 38.

    I'm sure that financiers will kick and scream like banshees at any proposal that potentially reduces revenues, no matter how important to economic stability. Authorities and Governments must, for once, stand firm in the face of intense lobbying and threats and do what is best for long-term stability.

    Most no longer believe that maintaining the regulatory status quo is good for us in the long or short term and changing the way they do business will be good for the economy. Bankers would remain among the best paid in the country but would hopefully become answerable to the wider economy rather than dictate from above how it should be run and how much they will charge for the privilege.

    On the subject of bonuses, the last two years have demonstrated that they are often not rewards for performance for several reasons: they were paid from revenues, not profits, and often the results of those trades or bets will not be realised until many years time, win or lose; they were paid by loss-making banks to retain staff; they were, and still are in many cases "guaranteed", an oxymoron if ever I heard one. The banking sector is opaque which is why the famous and succesful institutional investor Antony Bolton avoided it, and for a long time Warren Buffett was of the same mind. As it is so important to the economy it cannot operate in the wild west any more. No-one still really knows whether it actually adds or extracts value to or from the economy in the long term, see Haldane's comments from the BoE. We need many questions answered

  • Comment number 39.

    @1. SmilySpook
    (Politely!) If nobody cares - why are there so many comments...?

  • Comment number 40.

    # 3. At 01:51am on 25 Jan 2010, Nicholas wrote:

    > I knew I was poor but this article has made me realise just how poor
    > compared to the banking world. give us a job!

    Sure. Can you count? Are you an avaricious, close-fisted, grasping, guzzling, rapacious, selfish glutton?

    Then you're the ideal CEO for RBS. And if you trash it, you could have a pension like Sir Greedie Goodwin!

  • Comment number 41.

    It has occurred to me that the number of staff the big bonuses go to has not gone in print of on line.
    Approx. how many bankers have these big payouts?
    In football the number with the big pay packets is reasonably well known. (by big, more than the average yearly wage per week)

    Or is the number still the great banking secret?
    Someone can earn the money, but I would like to see the return for the work involved.
    And taking cash off the governments for mistakes and risks does not seem to be a good days work.

  • Comment number 42.

    Oh dear ! Somebody's got more than me. This attack on the banks is like a pityful ,envious sqeal from a five year old. If the banks make money, that's their affair, what is Darling going to do about it ? Zilch. Not even this ultra incompetent government dare take on the banks, or they'll find the city of London has moved to the banks of the Seine. It is all a ruse to distract from the pain that is to come when the government eventually makes a belated attempt to balance the books.

  • Comment number 43.

    27 Deep-heat

    You state `There is ....a direct correlation between this (the benefits of the banking system) and the massive jump in equity that hundreds of thousands of people have experienced that has enabled them to no longer worry too much about their retirement.'

    Then why is it that my pension fund is knackered? Sure, I can sell my house but I still need to live somewhere?

    I don't believe that we have free market capitalism. If that was the case then the banks would be broken due to their own stupidity. As it stands the taxpayer is now expected to subsidise them and protect them from the consequences of their own greed. Sorry, I don't know a name for what we have at the moment but this is not free market capitalism.

    There is in my view nothing wrong in an individual or a group of individuals investing their money in a commercial venture on the assumption that they take the risks for the profits. Even the Co-op started in this way. This is my understanding of capitalism but this is not where we are.

    I am one of those many people who lives within their means, am fiscally conservative and have savings. There are more savers in this country than borrowers. So why are the savers being screwed with a base rate well below inflation? Again, who are these borrowers who have had such a good time?

    No: we are not looking at free market capitalism. Would that we were! We are looking at a smash and grab in which Big Government and Big Business have set out to rob the little people.

    Once you have accepted that point and, like me you are connected by your work with the real economy, you begin to realise that for at least the last twenty years the moral method of earning your living through making, buying and selling has been progressively undermined by the financial services industry perpetually raising the ante not for the broader interests of the economy and the secure return this would provide for the generality, but for the benefit of their own bonuses.

  • Comment number 44.

    They have not "earned" it. So "Sacrifice?" I don't think so.

    But as some others have mentioned in earlier blogs, the problem is millions of Ordinary Joe's have been "conditioned" (if that's the right word,) to just accept a much more meagre level of pay or wage and we've just swallowed the excuses we've been given to us by our employers for it! Yes, Goldman's "profits" verge on the embarrassing, but plenty of other corporations have huge profits, yet choose to be mean in terms of employee pay.

    The key question in this respect would concern Goldman's competitive position. Would everyone argue that it's competitive position has always been a fair one, or does it have an unfair advantage? I'd be interested to hear Richard Fuld's comments, amongst others.

  • Comment number 45.

    Someone asked where Goldman's made all their profit...an investment friend told me the following. When AIG - big US Insurer - was bailed out last year by US Government, someone high up in AIG made a decision to unwind a large number of their investment positions early, mostly on credit side (not equities). Unwinding early meant they got lousy returns and Goldman Sachs and Morgan Stanley made huge profits buying up these positions cheaply. My friend reckons the banks made around $70 billion from these AIG deals alone, and is convinced there was something very dodgy going on within AIG which we are still to hear about....

  • Comment number 46.

    Hello, I've been reading about these huge bonuses for speculative banking, but then I realised that I don't really know what these people actually DO in their offices. Would we miss them if they were removed to Mars?

  • Comment number 47.

    This year banks made money on top of two things:
    a) They got cheap money from the money markets and used it for investing (aka leveraging*). Money was cheap due to the low interest rates and Quantitative Easing. Low interest rates penalize people who have savings and/or own a retirement fund who thus receive lower interest on their money than they would otherwise: in practice the cheap money is coming at a cost for savers.
    b) The markets were going up: when the markets go up, all but the dumbest of traders make money. Markets were going up thanks to the governments pumping money into the economy to stimulate it. They are also going up because companies are "boosting profits" by cutting costs (mostly by firing people) which government are picking the tab for (via unemployment benefits). All the money the government is spending will have to be paid by us, either as higher taxes or lower public services.

    Both mechanisms funnel money from the many to the few, which is why most people are unhappy about the rather large bonuses being paid by banks.

    Darling's "measures" are just smoke and mirrors; they are one-off, crowd pleasing (or so he hopes) and do not permanently change the way banks do business - bankers will just batten down the hatches, weather the storm and go back to sun and daikiris in a year's time.

    What really needs to be addressed is the fact that large banks in their current form enjoy government guarantees and protection (at our cost) because if they fail they can bring the whole market down with them. The measures that Obama has announced go part of the way to address this by covering some of the reasons why bank failures can bring the markets down.

    * How leveraging works: get a loan, invest with that money, after a while cash in the investment, repay the loan, keep the profit.
    Example: start with £100.000 of your own money and get a loan for £900.000 at 1% interest - you now have £1.000.000 and are leveraged 9-to-1 (less than most investment banks). Invest that in something that gives you %6 a year (which is not really risky). After one year, cash out your £1.060.000, repay the loan plus interest (£909.000) - you now have £151.000 and can declare a staggering 51% profit on your money.
    Banks (but not you and me) can easilly get money from the money markets to do this because they have an implicit state guarantee (i.e. they are "too big to fall") - if they're unable to repay their debt (because a "safe money making oportunity" wasn't safe at all) the state will step up and prop them up.

  • Comment number 48.

    I have written now for over a year on this blog comment after comment deploring the madness that the global financial system has descended into. Most bankers seem to have learned nothing from the disasters of the last two year. Banks and other large businesses in financial services need to be downsized, very strictly regulated and heavily controlled. Investing and speculating with other people's money should not make a small oligarchy and their colluding employee-servants obscenely rich, whilst their host societies descend time and again into economic chaos. It is high time to publicly expose and rein in the hyprocrite scoundrels of Goldman Sachs and their fellow white collar conspirators.
    Please find many more arguments and facts for the imperative need for radical change in the global financial system here:
    https://globalinsights.wordpress.com/

  • Comment number 49.

    I think the markets will tank this week - but while the die hard Capitalists are trying to defend it the rest of us should consider this...

    Currently, under the surplus value theory I believe we are probably producing everything of neccessity (i.e. what we need) by Monday lunchtime, thanks to the technologies we have developed.

    That means the next 4.5 days (in a 5 day week) are purely for 'desires' which to the business is essentially 'profit' - i.e. surplus value.

    If you also sign up to the Capitalist ideal that we are running a system of 'survival of the fittest' - a meritocracy - then it can also be assumed that generally the 'best' producers, thinkers, inventors etc. are all in work.

    I conclude that the best of society are in fact engaging (well for at least 4 days of the week) in a non-essential task - i.e. a time wasting task.

    Now is this (cynically) because if these 'best' were not occupied in this way then they would overthrow the succession of 'dumboids' who have been running this country?
    I mean think of the consequences if the best thinkers were not wasting their time on pointless production, but were considering the system which is being propped up so readily by Government.

    This might make you think as you watch the red days this week, I mean it looks like Obama 'chose his side' last week and it was an unexpected choice - the markets are not happy that he is discarding the "green devils" and aligning himself with the people, and that he is also not happy about rules being changed to allow the 'buying of elections' (his words, not mine)

    Feeling lonely bankers? - never mind, I hear $1 Million can be quite comforting and you will be able to use it as fuel next winter!

  • Comment number 50.

    Is it naive to enquire how many of the beneficiaries will pay full UK tax on their mega salaries?

  • Comment number 51.

    Surely the government should have imposed strict conditions regarding bonuses before giving the banks printed money.

  • Comment number 52.

    I do not understand why, when the money supplied by the tax payer was supplied to keep the banks in business and all their employees in a job; that one of the provisions would have been that no bonuses were paid at all, until the loan had been repaid.
    This seems reasonable in the light of the fact that so many of the population whose cash saved the banks,lost their jobs because of way the banks conducted their business.
    The banking staff should be grateful that because of this they still have a job to go to.
    If this was applied worldwide there would have been no fear of banks losing key staff to other banks, which is there excuse for paying these bonuses.
    After which they could do as they please without any comment.

  • Comment number 53.

    The real sin is that banks can afford to pay these sums. The financial system which gives banks control of the money supply enables them to rob the rest of society. "Carpe Testiculum" is their motto.

    QE could have been used to ease the recession and invest in the future. Instead it has been used rescue failed banks and help them back to business as usual. RBS seems to be using printed money to finance the destruction of British jobs via the takeover of Cadbury.

    The system is rotten. The following BBC article is a very good argument as to why:

    https://news.bbc.co.uk/1/hi/8410489.stm

  • Comment number 54.

    28. At 09:12am on 25 Jan 2010, Seethruya wrote:
    Bankers are obviously still living in their dreamworld which bears no relationship to the world the rest of us live in. By taking such obscene payments they rob the rest of us.......
    --------------------------------------------
    I sometimes wonder if in fact it is the rest of us living in the dreamworld.

    Perhaps there is a new ruling class based on money that has replaced the previous and the previous etc, just as the aristocracy of old owned everything. Industrialisation shifted money and therefore power to the innovators and eventually to the new middle class, this process carries on in new ways.

    Things have kept moving on and we now find that a new aristocracy has crept up on us. Our politicians must be complicit in this as it is a subject that will not be spoken about.

  • Comment number 55.

    The debate surrounding banker's pay is a tough one. The level of reward seems ridiculously high, but there is a case that whilst there is no global financial legislation, the "talent" will go where the pickings are richest.

    I wish someone would explain, though, how Obama's plan will work. Many of these banks are the size they are as they absorbed smaller, local banks some of whom were "rescued" from economic doom, these rescues being welcomed by the treasury.

  • Comment number 56.

    Considering the history of the last 100 years (and longer), bankers and speculators have regularly caused huge damage to the real economy, wrecking lives in the process.

    Looking at things slightly differently - you can't blame a wolf for being a wolf: but if it regularly ravages your livestock, you shoot it.

  • Comment number 57.

    I agree with #35 - bankers should take a good look at seven-year-old Charlie Simpson, and just try and remember what the point of being human is.

    The fact is, no-one can ever get happy endlessly chasing money, because there'll always be someone with more money than you. If any of those bankers gave their one million to Haiti, I guarantee it would give them the greatest moment of satisfaction of their Goldman Sachs career.

  • Comment number 58.

    The fact that people are getting upset about the bonuses paid to bankers is completely wrong - the whole issue is a red herring. If the bonuses aren't paid - where does the money go? it just increases the profits of the banks which are absolutely huge anyway. The real issue is slightly different. Why in this so-called competitive marketplace is it so easy for banks to make so much money? I would ask a similar question of the big supermarkets. The problem is that competition has been stifled and the anti monopolies comission has become completely toothless. We are now in thrall to a few banks, Petrol companies , supermarkets, and energy companies who can all literally print their own money. They are the modern "Barons"

  • Comment number 59.

    Many of the people in the "city" will have good Physics or other useful degrees. So they have been educated to do something of worth in the real economy. Perhaps before starting such a course they should undertake not to ever work in finance but to do something for which they have been educated, industry, teaching or whatever.

  • Comment number 60.

    #46
    Would we miss them if they were removed to Mars?
    -------------------------------------------------

    Investment bankers are candidates for the 'B' ark, along with the telephone sanitisers and the hairdressers!

  • Comment number 61.

    Those poor, poor souls. They toil so hard and get so little. Here's some tips: If you go down to the supermarkets late in the evening, you can get bread and baked goods quite cheaply. Also many town markets sell dented tins and goods close to their sell-by dates that you can pick up for half their normal price. It not the best quality, but it makes a meal. Make use of charity shops and boot fairs for clothing. It won't be easy, but with a few cutbacks it is still possible to scrape by with only a £1 million bonus. Take care. Keep warm.

  • Comment number 62.

    51. At 10:36am on 25 Jan 2010, Dunningham wrote:

    "Surely the government should have imposed strict conditions regarding bonuses before giving the banks printed money."

    Ah - but that would mean 'reasoned and careful consideration' was applied to the situation - in reality it was plain old 'Panic, panic, panic'

    "Marry in haster - repent at lesiure"

    ...and the marriage of Government policy and banking was the archetypal shotgun wedding...

  • Comment number 63.

    What are these bank boards of directors doing? Is it really in the interest of the shareholders to splash out these bonuses? It will be said that the bonuses are paid in respect of individuals performance but do these people DESERVE this much?

    With so many getting these bonuses, it strikes me it cannot be that hard a job to do.

  • Comment number 64.

    56. At 10:52am on 25 Jan 2010, Sasha Clarkson wrote:

    "Looking at things slightly differently - you can't blame a wolf for being a wolf: but if it regularly ravages your livestock, you shoot it."

    ...now that's logic I can agree with...

  • Comment number 65.

    It really is getting tiresome this subject now. Like most of the big subjects in Britain, ordinary people do not have any powers to do anything about them. Sure we can vote. Cons. Lib. Lab. That's it. You can guarantee once they get in, promises will be broken. We just go about our daily lives and listen to the news and are completley powerless until the next election and the cycle continues. You can be sure of one thing there are many people out there, that now have the mindset that the gloves are off. It's everyone for themselves. The state and the powers that be can go to hell. It will be every trick in the book to get what you want out of life. This is not my opinion of course!

  • Comment number 66.

    Mr Peston, Can you or some other expert please provide a league table of good and wicked banks, so that I can decide where to move my accounts?

  • Comment number 67.

    I tend to get quite annoyed at the public's anger at "bankers". It seems to me that anyone who walks around the city who may have earned above average salaries is labeled a "banker" and the connotations of which seem to be severely negative. Now I work in a institution that does "banking" activities, and every single project I work on adds significant value to the clients we have. And to me, they seem like fairly noble achievements through green energy or financing start up businesses.

    I have many friends who work in the big bulge bracket investment banks, and although they are remunerated incredibly well - junior guys getting paid 6 figure sums. I really think they deserve it. The work they do is very innovative, and even with risk adjustment is ground breaking stuff. The amount of hours they work are beyond my abilities. I'd estimate near 100 hours a week in front of a Bloomberg and PC monitor. So there is a large sacrifice occurring here. These guys are sacrificing their social lives, drastically in order to work in these roles.

    I wouldn't say that you need to be incredibly smart to do this work but you have to have endurance. You also have to have a top degree from a top university or business school, which is no small feat. Ok, a £1m bonus is a bit excessive. Most people don't need that much money, but for the kind of work and achievements that these people do with the exception of the 100 or so people that get inane amounts of pay for not much work, I think there needs to be a nominal value/reward with which bankers can be shown in order to feed their need for recognition.

    If salaries and bonuses decrease much more, there will be a lack of talent in the City. I can't see this having anything but a negative effect on this country in general.

  • Comment number 68.

    #11 zygote wrote:

    How can we make banks' risky practices riskier for bankers without hobbling the economy?

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

    ...by blocking their staircases and disabling their elevators!

    [Unsuitable/Broken URL removed by Moderator]

  • Comment number 69.

    Robert

    Goldman Sachs is an investment bank that doesn't have a retail bank. As such it wouldn't be saved by a government, so why all the angst? Can't people see or understand the difference?
    The real questions are what is the position of the shareholders with regard to the bonus pot and why is the cost of advising on M&A so expensive? I have yet to see shareholders benefit from them so why are they voting in favour?

  • Comment number 70.

    #9. At 06:52am on 25 Jan 2010, AlLang wrote:
    "Goldman will be paying many hundreds of billions of pounds in bonuses to staff .

    No, they will not. You appear to be confusing millions with billions.

    +++++++++++

    Yes, it gets confusing.

    The president was giving a press conference on the war. A general came to his side and whispered "Three Brazillians have been killed!"

    President (hand over the microphone): " O dear, how many is that?"

    The large numbers mean nothing to me. How many lorry loads of £50 notes is a billion pounds? Do all these huge sums actually exist? Probably not physically I suspect, just xeros on a computer screen.

  • Comment number 71.

    67. ct218 wrote:

    "I have many friends who work in the big bulge bracket investment banks, and although they are remunerated incredibly well - junior guys getting paid 6 figure sums. I really think they deserve it. The work they do is very innovative, and even with risk adjustment is ground breaking stuff. The amount of hours they work are beyond my abilities. I'd estimate near 100 hours a week in front of a Bloomberg and PC monitor. So there is a large sacrifice occurring here. These guys are sacrificing their social lives, drastically in order to work in these roles."

    Ha, ha, ha - I think this has got to be just about the funniest thing I've ever read on these blogs!

    Tell us, ct218, during those 100 hours a week, during which these guys are making such sacrifices, how many lives have they saved, how many times have they risked their own lives and how many times have they cleaned the toilets?

    Get real!

  • Comment number 72.

    With so many highly talented and very well remunerated people in banking and finance jobs it seems that the business is ripe for cost saving automation.

    If hundreds of billion$ could be saved every year to add to shareholder value then surely some banker somewhere will see the business sense in spending a a few tens of billions to get the computer program perfected that will replace them? There would be the added benefit of no longer needing expensive city centre offices.

    The money then saved could be invested in manufacturing.

  • Comment number 73.

    # ct218
    You seem to be overlooking the fact that had governments around the industrialised world not underpinned the banking system with huge amounts of public money most of your friends in the big bulge bracket investment banks would be doing something else anyway.

  • Comment number 74.

    Were the banks to be curbed with regards to bonuses and had regulations which stopped this ever happening again to OUR banks, sure, some bankers might go but there must be quite a few people out there who would do a fine job. Endowment mortgage shortfalls, very low savers rates, etc. don't speak of equity, do they? And an awful lot of us do not have comfortable pensions and money to spend, as we could not get on the inflated housing ladder.

  • Comment number 75.

    " However Barclays has decided that its top executives will receive 75 per cent of their bonuses in staggered payments over three years"

    So barclays are passing the bonus tax directly onto the execs!

    Ie pay 75% in total of the bonus over 3 years.
    25% this year + the 50% BONUS TAX
    25% next year NO TAX!
    25% year after NO TAX!

  • Comment number 76.

    I've read all the comments so far but can't find any from bankers defending their bonuses.
    Is there not one willing to stick his (anonymous) head above the parapet?

  • Comment number 77.

    There is a lack of honesty from Goldman Sachs about the bonuses to partners. They are entitled to a share of the bank's profits each year; taking out "only" a million pounds is not a hardship for them, as the rest of their profits remain in the bank, to be taken out later.

  • Comment number 78.

    The UK Government's response to the financial crisis has almost exclusively consisted in helping out their mates in the banking industry.

    If Darling doesn't like Obama's reforms, perhaps we need to find a Chancellor who does.

  • Comment number 79.

    6. At 11:32am on 25 Jan 2010, Rob wrote:
    I've read all the comments so far but can't find any from bankers defending their bonuses.
    Is there not one willing to stick his (anonymous) head above the parapet?
    -------------------------------------------
    They must be too busy doing God's work to be looking here. At least they are busy earning their money.
    They may also be having a philosophical discussion amongst themselves this week.
    https://www.doctorhugo.org/gandhi.html

  • Comment number 80.

    #67 ct218 wrote:

    "The work they do is very innovative"

    This sentence says it all, really. Here we are trying to prevent innovation by banking whizzkids, yet the whizzkids themselves still think they should be praised for it.

    Listen very carefully, I shall say this only once: Innovation is what got us into this mess in the first place.

  • Comment number 81.

    I would make Noideatall Chancellor, when he/she has had some sleep. The bankers are being left in the room with our gold, and think they can take what they like. Regulatory bodies always end up psychologically in bed with their flock, and,as Noidea says, are inherently not to trusted. Bonuses, understood by the industry as part of salary, are only part of the problem. The total remuneration is the outrage,and I'm mystified why there aren't riots in the streets or a revolution. The salary level in "the market" is vastly inflated because the market is rigged at the top. Remuneration committees in the finance industry have interchangeable membership, so there is an orgy of mutual back-scratching. the smaller shareholder is an irrelevance in that scenario. I wonder if the nation-state isn't becoming a "paper tiger" with the real power in big finance and big industry, and therefore we can expect little by way of remedy for our present banking ills. As well as tough legislation, we need a programme of reeducaation for the banking industry. Viva Voelcker and Tobin.

  • Comment number 82.

    It seems to me there are three options for the bonus pool money:

    1. The Banks keep it
    2. The government takes in taxes and wastes it on 'Consultants' (£660M last year), 'lame-duck' computer systems (more millions!), etc
    3. Give it to individuals in the form of bonuses

    1 and 2 don't seem to benefit the guy in the street. At least giving the money to individuals means they will tend to SPEND it and it will find its way into the real economy.

  • Comment number 83.

    How about this as evidence as to why this constant whining by bankers that they need to "pay the going rate" is just so much bull...

    Todays' BBC article https://news.bbc.co.uk/1/hi/business/8477687.stm shows that the economy is beginning to hurt badly and that during this current recession so far:

    "two-thirds of people made redundant were paid 28% less when they managed to find another job".

    I'd suggest that if we had let the banks go bust, this would have been the very minimum reduction in bankers salaries that we would immediately have achieved. By having to support the banks, we have clearly propped up the "market rate" artificially, and so we need to find another way of achieving this reduction.

    I believe this statistic also gives an inkling of the almighty battle ahead for the government re the present outrageously generous public sector pay rates, holiday entitlements and pension contributions.


  • Comment number 84.

    67. ct218 -> you do not seem very clever to me... You are happily selling your employer's moto without being part of it (as you say)...

    "The work they do is very innovative, and even with risk adjustment is ground breaking stuff."

    you mean the ground breaking stuff that put us where we are now?? they make so little sense in the real world - they cannot even explain it properly to their own employees/friends??
    please READ from other sources than your masters - you are in for a shock!

    We do not need banks to do 'ground breaking stuff' > just to fullfill the need for the society to have a common denominator (money - as a direct correspondance to wealth) to ease exchanges between individuals.

    And if a man choose to work for 100h/week as an on-going theme - he better not work too hard > or he is not gonna last more than a few years...

  • Comment number 85.

    £1m means £1,000 and not £1,000,000 which is correctly represented as £1mm, where M represents a thousand in Latin and not a million. This sort of crass error is very annoying and, a million quid is not a lot of money.

  • Comment number 86.

    #29 quijote1303 wrote:

    "Which is where it all falls down and why there is no point in a discussion with banks or their management. Like many in politics - there is no shame or remorse and they do not even recognise those sentiments as having any relevance. We, colectively, need to recognise that fact. They are oblivious to any feeling of being culpable or suffering from self doubt. The very arrogance and rank lack of interest in others is why they have these positions in the first place."

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

    ...some might say that they exhibit classic narcissistic psycopathic behaviour!

    https://en.wikipedia.org/wiki/Antisocial_personality_disorder

    Characteristics of people with antisocial personality disorder may include:

    - Persistent lying or stealing
    - Superficial charm
    - Apparent lack of remorse or empathy; inability to care about hurting others
    - Impulsivity and/or recklessness
    - Lack of realistic, long-term goals — an inability or persistent failure to develop and execute long-term plans and goals
    - Inability to make or keep friends, or maintain relationships such as marriage
    - Poor behavioral controls — expressions of irritability, annoyance, impatience, threats, aggression, and verbal abuse; inadequate control of anger and temper
    - Narcissism, elevated self-appraisal or a sense of extreme entitlement
    - A persistent agitated or depressed feeling (dysphoria)
    - Tendency to violate the boundaries and rights of others
    - Substance abuse
    - Aggressive, often violent behavior; prone to getting involved in fights
    - Inability to tolerate boredom
    - Disregard for the safety of self or others
    - Persistent attitude of irresponsibility and disregard for social rules, obligations, and norms
    - Difficulties with authority figures

  • Comment number 87.

    Any chance we could hear about something other than Banks and Cadbury's ?

    I’m getting particularly bored of the bankers bonuses issue, we all know, none of us like it but there’s nothing any of us can do about it so how about you try looking for another business story this week ?

  • Comment number 88.

    Government: asleep at the wheel.

    This is the list of financial problems that I can recall. I'm sure that there are more:

    - Pearl Assurance fiasco - the government allowed a vast amount to be removed from the companies coffers with the result that the policyholders have worthless policies.

    - Equitable Life - remember those statements about not panicking and removing your money?

    - Northern Rock - 'No cause for concern'.

    - Learning & Skills Council building programme - spending £1.5B that they didn't have.

    - Banking system near collapse, subsequent bailout & record profits.

    I don't think this is the best record of government financial competence. Neither do I necessarily think that the Tories would have fared any better, since some of these began under their watch, and they had numerous problems of their own. Maxwell, anyone? Black Wednesday?

    But what this shows to me is that there is a serious lack of competence and/or funding of the oversight portions of government, or a structural problem with jurisdiction between the various parts. Whichever it is, it makes no difference - it's all an indication of incompetence on the part of central government.

  • Comment number 89.

    Thank you Ricardo for the clear explanation of leverage, which seems a good introduction to what went wrong and why the bankers don't (have to) care. But regarding leveraging, how on earth can banks consistently make more from investments than their borrowings cost? Obviously they don't always (hence the "financial crisis"), but for years they almost always have. How?

    Right now the cheapest loan I can get is 7.8%, but I would be very lucky to get 3.5% on savings. Where are banks borrowing from and where are they "investing"? Sure they're taking more risks than a savings account but from 86 to 2007 they were almost all winners almost all of the time, so not that much risk! How does that work?

  • Comment number 90.

    69. skynine

    "Goldman Sachs is an investment bank that doesn't have a retail bank. As such it wouldn't be saved by a government, so why all the angst?"

    That was true until late-2008, when GS registered under the Bank Holding Companies Act, which means it can take in retail deposits. Whether or not it does is irrelevant. If GS were to get into trouble, the Fed would have to rescue it as, if it did not, then it would send out a message that it might not rescue other banks which did have retail deposits.

    Anyway, the real issue here is that GS' registration as a bank, which gave it access to Fed emergency funding, is what has enabled it to generate ("earn" is a rather generous description of what GS and others have achieved this year) very high profits on its trading activities. If you look at the areas from which Obama is planning to ban banks from operating, namely prop trading, hedge funds, and private equity, these are all areas where GS generates significant profits, and for which it pays high bonuses. Obama's choice of activities to curtail is at least as much about showing his displeasure at the "obscene" (a description he has used twice in a week) level of bonuses, as it is about reducing the risk of similar financial crisis to the one we experienced in 2008-2009.

  • Comment number 91.

    #71. the_fatcat wrote:

    "Tell us, ct218, during those 100 hours a week, during which these guys are making such sacrifices, how many lives have they saved, how many times have they risked their own lives and how many times have they cleaned the toilets?"

    Tell us, fatcat, how many lives have you saved to earn your wage? How many times have you risked your life? How many toilets have you cleaned?

  • Comment number 92.

    I know it's not big and it isn't very mature but my only thoughts to the poor little men (and they will almost certainly be all men) at Goldman Sachs having to survive on only GBP 1 million this year is

    "ahh diddums".

    If they tried to live on the UK average wage for a year maybe just maybe people would have a little bit more sympathy.

    I'm with many others who believe that the bonus will be kept artifically low this year to only miraculously leap back next year.

    Before people come back thinking that I am being hard on them just remember that to get to be a partner at Goldman Sach you will have had to put in quite a few years of exceptional performance and no doubt will ahve received astronomic bonuses and pay in the recent past.

  • Comment number 93.

    67. At 11:12am on 25 Jan 2010, ct218 wrote:

    "I tend to get quite annoyed at the public's anger at "bankers". It seems to me that anyone who walks around the city who may have earned above average salaries is labeled a "banker" and the connotations of which seem to be severely negative."

    Ah - how the tables have turned - are we feeling some prejudice Mr Banker sir? - Maybe the unemployed feel that they are labelled as 'lazy' or the low paid are labelled as 'stupid' - all prejudices which have been going on for years - in fact a lot from bankers themselves (who assume it's laziness that prevents full employment and not actually the inequality of wealth they enjoy.

    "Now I work in a institution that does "banking" activities, and every single project I work on adds significant value to the clients we have."

    ...and who do those 'clients' represent? How do you 'add value' when you do not apply any changese to the underlying production? I mean do you actually go to the factories you invest in and give a hand on the track? - no, didn't think so...

    "And to me, they seem like fairly noble achievements through green energy or financing start up businesses."

    Yep - you keep telling yourself that, pick out those 'worthy causes' bankers like to credit themselves with - however evey banker is tasked with maximising profit so there's always a draw to arms, property and other 'socially bad' restrictive investments.

    "I have many friends who work in the big bulge bracket investment banks, and although they are remunerated incredibly well - junior guys getting paid 6 figure sums. I really think they deserve it. The work they do is very innovative, and even with risk adjustment is ground breaking stuff."

    Oh yes - we're all witnessed the 'ground breraking stuff' unfortnately it's also 'bank breaking' and soon it will be 'Government breaking'. The fact that these 'scientists' are working with 'Plutonium' - doesn't mean they understand the origins or the dangers involved. The bottom line is your friends, the bankers, can't actually explain where that profit is sourced from, but only that it 'appears after successful investment' - if they did ask themselves this fundamental question then they might actually have a clue what they really do for a living
    Ignorance is not an excuse.

    "The amount of hours they work are beyond my abilities. I'd estimate near 100 hours a week in front of a Bloomberg and PC monitor. So there is a large sacrifice occurring here. These guys are sacrificing their social lives, drastically in order to work in these roles."

    ...the old 'bankers work long hours' - well as someone who also works long hours in the city I am well aware that 'sitting in front of a screen' does appear to be hard work, but when you take out the 'breakfast' and the '2 hour lunch' your 'long hard day' is not as long as you thought it was - and nothing compared to the 'long hard days' any self employed or salaried worker works in this country. If you're basis for pay is 'bankers work long hard hours' - then you are on a losing wicket my friend....

    "I wouldn't say that you need to be incredibly smart to do this work but you have to have endurance. You also have to have a top degree from a top university or business school, which is no small feat. Ok, a £1m bonus is a bit excessive. Most people don't need that much money, but for the kind of work and achievements that these people do with the exception of the 100 or so people that get inane amounts of pay for not much work, I think there needs to be a nominal value/reward with which bankers can be shown in order to feed their need for recognition."

    Absolute twaddle from a banking fan who clearly doesn't understand how or why bankers get paid so much - even after the recent events which have made it abundantly clear

    Does this not concern the rest of us? The coach nearly crashed and the 'drivers' can't see why it was their fault!

    "If salaries and bonuses decrease much more, there will be a lack of talent in the City. I can't see this having anything but a negative effect on this country in general"

    Get real mate - show me the 'talent of the city' and I'll show you a pig flying.
    There is no talent - only fools leading fools - luckily the rest of the country is slowly working this out.

    I mean are you seriously expecting us to put our faith in those who failed to see the biggest crash of modern times coming?

    I can only presume this post was a wind up - because surely nobody is so clouded in their judgement they actually believe some of the things you wrote in your post.

  • Comment number 94.

    85. lp wrote:
    "£1m means £1,000 and not £1,000,000 which is correctly represented as £1mm, where M represents a thousand in Latin and not a million. This sort of crass error is very annoying and, a million quid is not a lot of money."

    Actually, I think just £MM is possibly more accurate, if we're working in Latin (the '1' is not necessary). Anyway, today most people accept that '£1k' means 'one thousand', and '£1m' means '1 million' with very little chance of misunderstanding - although there are still folk around having to ask if a billion 'is a UK billion' (ie 1,000,000 x 1,000,000) or 'a US billion' (ie 1,000 x 1,000,000). Unfortunately, the Yanks had their way decades ago.

  • Comment number 95.

    #51 and #62

    Isn't the problem not that they didn't impose conditions, but that the condition they imposed was that they govt would be given a substantial stake in the equity of the banks.

    So now the govts interests are lined up with those of the banks, becuase the only way they (i.e. we) will get our money back is if bank share prices start going up.

    Whereas Obama imposed absolutely no conditions at the time - which on the face of it looks worse.
    However it has allowed him to use growing public anger to decide his conditions after the fact - and thereby make them much more stringent than he would he would have been able to do before.

    Now, I'm not 100% convinced about his proposals, but you have to admire his political sense, which is something in worrying short supply this side of the atlantic...

  • Comment number 96.

    82. At 11:43am on 25 Jan 2010, Racing_in_the_Street wrote:

    "1 and 2 don't seem to benefit the guy in the street. At least giving the money to individuals means they will tend to SPEND it and it will find its way into the real economy."


    ....would that be the REAL Economy of Monaco / Geneva / Bermuda?

  • Comment number 97.

    Re #67,

    I'm a manufacturer. I'll tell you how I'd organise this.

    I'd employ 3 people working a 40 hour week for each 100 hr position. This will ensure the employees have sufficient home time, and are fresh for work each day. They will also make less mistakes.

    I'd pay 30K for graduates rising to about 100k for managers. No bonuses, because they are being paid for their work. We'd get a Christmas party however.

    With the huge amount of money that I'd save on salaries, I'd look to reduce my prices to get more business and offer my customers a better deal.

    So a pragmatic manufacturer would employ more people, and offer his customers a better service for less.

    We know what a bank would do, and this is why we regard them as out of touch and dangerous.

  • Comment number 98.

    91. At 11:59am on 25 Jan 2010, rbs_temp wrote:

    "Tell us, fatcat, how many lives have you saved to earn your wage? How many times have you risked your life? How many toilets have you cleaned?"

    I wish I could say I was a Red Cross doctor working in a war zone (for one hundredth the payment of a 'top trader'). Sadly I'm not. I earn less than a doctor, but I do hope I make lives more satisfying for some people - and I have cleaned the toilets this week.

  • Comment number 99.

    86. At 11:48am on 25 Jan 2010, freemarketanarchy

    Coincidently all those traits listed also make up the requirements for a successful Capitalist - cause and effect - to be a good banker you need to be a Narcissist and if you're a "good banker" you tend to develop Narcissism!

  • Comment number 100.

    69. At 11:17am on 25 Jan 2010, skynine wrote:
    Robert

    "Goldman Sachs is an investment bank that doesn't have a retail bank. As such it wouldn't be saved by a government, so why all the angst? Can't people see or understand the difference?"

    Goldman Sachs orchestrated its own bailout by engineering the AIG bailout thanks to the help of their very own alumni Hank Pouslen using tax payers' money, ie TARP. Smart, eh? It will be interesting to see what happens when people REALLY start to understand the scale of the situation.

 

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