I see that bankers bonuses are all over the news again because Stephen Hester, Chief Executive of RBS has been awarded but then declined a share bonus of almost £1,000,000 (£963,000 to be precise, I think!).
I'm not entirely sure where I stand on this. On the one hand, Mr Hester has been brought into RBS to turn round a bank that was failing and had made some very bad decisions about safeguarding its customers' money. So far as I can make out, that's what he has done and although the government has not yet been paid back for its bailout loan, things are looking up. Presumably he took the job under a contract which made clear his terms and conditions which again presumably, were agreed by the government's lawyers as the principal shareholder. So legally, he is entitled to every penny that he has been offered.
Morally, things look a little different. Many thousands of people have lost jobs and seen their lifestyles ruined by the profilgacy and greed of the big banks in lending to high risk clients for the chance of making an easy buck. The Labour government at the time of the crash was hasty to say the least in the arrangements it put into place and totally failed to build in any conditions or safeguards, and so also must have a moral responsibility as well as a legal one for what has happened. The bank's directors must surely be living in a little bubble insulated from the rest of the world if a) they thought that the news of the bonus award would not leak and b) they thought it was an acceptable thing to do and c) they would not be vilified by everyone else.
Stephen Hester should be congratulated on having the moral backbone to turn down his bonus, even if he has done it in response to the outcry in the press (and there is no proof of that). He has gone on record as saying that he does not want to be seen as a pariah and in the same bracket as Sir Fred Goodwin, who ruined the banking system in the first place by his greed and poor judgement. His next task should be to instruct his Board of Directors to do the same and set an example to the rest of the banking sector that the misery they are inflicting on others is not something they can escape from themselves (although perhaps just not receiving a humungous bonus cannot be placed into the same category as losing your job, home and lifestyle because you have been made redundant from a job you have worked hard at for many years).
The Labour party should stop throwing stones at the Tory coalition about this and also stand up and accept its share of the responsibility. Let's not forget it's their non existent regulation of the financial sector, coupled with their hasty decisions about bail outs and poor decisions about investment in the country's wealth (eg Gordon Brown selling off the gold reserves when the price was at an all time low) that have got us in this mess in the first place. And David Cameron should stop lecturing the little people that didn't go to Eton, remember who sets the rules and tackle the bonus culture by law and ensure that the country gets its money back, even if it does mean he has to offend his old classmates. Constantly penalising you and I will not get us all back on our feet, we simply don't have the combined cash to do it, but putting the shackles on the corporate greedy fat cats ought to go quite a long way to help, wouldn't you say?
I think one of the problems is that people like Goodwin smear the industry as a whole, so that when a good and honest man comes along, he is swallowed up in the public perception of all bankers being greedy bastards. The bottom line responsibility is with the government however, as banks are regulated (or should be) by them. I have little time for either side of the political divide in their handling of the financial markets as, once again, it is poor old Joe Public and his savings that get hammered. A few more banks redirecting their employees bonuses to their core customers would not go amiss either.
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