Wow. America get ready for another massive wave of bankers to come to our shores. Last week we found out Canada was trying to drive all its top paid bankers out of the country with unfair practices (Sep 22: Royal Bank of Canada Set to Lose Almost all Employees to USA) and now the only country which can hold a candle to US banker pay packages, the UK is set to do the same. Remember the #1 argument of these pay packages is “if we don’t pay them, they will leave the country to get paid”. Unfortunately that argument is losing steam as we are running out of countries for bankers to flee to to get “fair value” for services they bring to us (such as ruining the entire financial system). Advocates will cry “we still have Asia! They’ll run to Asia, please don’t let it happen!” but I just read last week that the CEO of the biggest bank (by assets) in the world (China) makes just over $200K. Gosh darn it is going to be hard to advance this dogma of losing all our talent to other countries with facts like this.
On the plus side, things are looking better and better for the United States – our unfettered corporate socialism shall allow us to not only have 80% of the world’s attorneys, but soon all the banking “talent” will be here too. Can’t wait to see what innovations they cook up for us in the coming decade when there is only 1 country on Earth when pay is based on just throwing anything out on the street and even if you cannot find 1 sucker to buy it, the Federal Reserve will – to promote growth. I knew there was a bright side of this crisis.
Welcome UK bankers – we are sorry for your persecution (like our forefathers over 300 years ago) – we welcome you to the land of freedom and bonuses where you always win – even if the country loses from your actions. It’s free market corporate socialism… err, capitalism. I’ll prepare the tea… and your pay package that dwarfs that of any other sector, or pay in any other country. Because that’s what the “free market” (backstopped by the Federal Reserve and US taxpayer) allows. Shuffling paper around in quick fashion while adding a markup to it, is what drives the American economy so maybe you are not cherished anymore in your old country, but in America – you are a rock star.
British Treasury chief Alistair Darling said Monday that automatic annual bonuses for banking executives will be outlawed in an attempt to curb excessive risk taking in the country’s huge financial sector. (can you hear multi million dollar flats being put on the market as we speak?) Darling told the governing Labour Party’s annual conference that new legislation to scrap the payments will be put to Parliament within weeks.
This week, Darling will speak to Richard Broadbent, chairman of Barclays Plc’s remuneration committee, along with Colin Buchan of Royal Bank of Scotland Group Plc, Mark Moody- Stuart of HSBC Holdings Plc and Wolfgang Berndt of Lloyds Banking Group Plc. His proposals are based on an agreement among leaders of the Group of 20 nations last week.
Darling said bankers in Britain will in future be offered bonuses for their performance over several years, rather than over 12 months. (emphasis added)
Another completely unfair concept which would never pass in the “free market” of the US – this replicates the concept that Royal Bank of Canada set out last week, that is paying people for performance rather than “creating volume”. Sorry politicos, bankers are not like you and I – they will chafe at being paid on performance … it’s wrong, and unfair. And they will move (just don’t ask where).
“We won’t allow greed and recklessness to ever again endanger the whole global economy and the lives of millions of people,” Darling said.
Thankfully, we will. Oops – what I mean to say is Timothy Geithner and Larry Summers are looking very closely at new rules that will be watered down by lobbyists, and countless loopholes will be created to make sure nothing ever really changes, while politicos mug for the public about how “they fixed the problem” and are on “the side of the people”. Ok I was correct in the first place… we will.
It gets worse from there… I assume Heathrow must already be jam packed with guys in $8000 suits.
He told the conference that new laws would include a claw-back provision and help to “end the reckless culture that puts short term profits over long term success.” (emphasis added)
So once again, the unfair practice of being responsible for nuclear financial bombs you set onto the world will be part of the new ethos of the United Kingdom. That’s 100% socialism, I am sorry to see you go out like this Britain. Being not at all responsible for your actions might of got us here, but the last thing we want is all our bankers to move to… uhh… well… Morocco.
“It will mean an immediate end to automatic bank bonuses year after year, it will mean an end to immediate payouts for top management,” Darling said.
The plans, to be included in a new Business and Financial Services Bill, will be proposed formally in the Queen’s Speech in December, the annual announcement of the government’s legislative program.
I am not sure how the UK legislative process works, but I can only pray that the lobbyists are 5% as effective as their American counterparts, so we can stop this persecution and continue to allow a small sliver of society to live in a parallel universe than the rest of the workforce. Let us only hope the next generation of bright minds in our country, also understand that the investment banking sector is the only one where you get paid no matter your performance – the less scientists, engineers and the like running around trying to “solve things”… the better for our future.