Sunday 6 September 2009

Banker's pay distraction at the G20

Really, what a total diversion this G20 communique on bankers pay really is. Not only has no agreement been reached, but what has been suggested is already being implemented by the banks in any case.

Take RBS, there staff are having bonus' paid over up to 3 years, mainly in shares and with up to 75% clawback.

All this fuss is to cover up some much less happy international co-operation. Basel II is dead and we are moving back to a world where banks will be able to hold as much capital as their national regulator says they have to. In a globalised world this is a dangerous move, which could see big banks move to countries where they are required to hold less capital. A situation not unlike that which we have with tax havens.

But why all the focus on bankers pay anyway? Like Hedge funds, this is a distraction from the true causes of the credit crisis. These were lax monetary policy and in the UK the situation was made worse by the terrible fiscal policy of the Labour Government.

Not much mention or agreement on this at the G20, quelle surprise!


Demetrius said...

The politicians need us to have distractions, in the UK we have an election campaign, and elsewhere there are serious problems that promise to cause trouble enough. So they put on show and sing the favourite tunes to drown out the sound of the wailing.

James Higham said...

Take RBS, there staff are having bonus' paid over up to 3 years

Their staff, don't you mean?

Gordon Brown said...

Hold on a mo, I saved the world. Din't I? Didn't I? Oh...

Unknown said...

Sorry to be a pain, but where did half of Russia go on your map?

You make mention of Basel II being dead? I'm not so sure.

There are a variety of things that weren't done properly - not least of which was that the FSAs view of Basel II was pretty appalling with wildly insufficient oversight.

Basel III should be coming but BCBS157 is a good first step on the road.

CityUnslicker said...

mitch - was ever thus.

Demetrius- is this the bread or the circus?

JH - my newest addition is five weeks old and hates sleeping at night...

Cold - no idea re the map. We will see re Basel 2. I read today as de-globalisation ruling though.

Budgie said...

O/T - I am not on Twitter but do follow your tips. I have even bought a few and they are doing well. Thank you.