Gordon Brown has promised to crack down on bankers' pay and bonuses, as he attempts to cynically grab support from traditional Labour supporters by playing the envy card.
He says:
"It will mean an end to automatic bank bonuses year after year. It will mean an end to immediate payouts for top management. Any bonuses will be deferred over time so they can be clawed back if they are warranted by long term performance"
He lies that such salaries were to blame for the financial crisis, ignoring the loose credit from the Bank of England over many years, and the kneejerk willingness to bail out all banks with taxpayers' money, rewarding the foolish, whilst the prudent retain them as competition.
Allister Heath in City AM puts it well "pay's role was merely tangential during the current boom and bust – and for that matter, in all previous bubbles.
The main drivers were the ridiculously low interest rate policy pursued for years by a Fed obsessed with preventing all recessions; the crippling East-West imbalances in savings and investment flows ....; global rules which promoted low capital reserves for banks, with many loopholes; and a giant intellectual error which thought that bubbles were impossible, that house prices would never fall and that statistical models had allowed bankers and regulators to control risk completely."
furthermore "All the restrictions on bonuses being dreamt up by the Fed or G20 would have done nothing to stop the bubble. We would have had sub-prime and CDOs. Life is not that easy; what a shame nobody wants to know."
So the UK will be the first Western economy to directly regulate the salaries in the banking sector, a measure that will simply chase away the financial sector from the UK. Already it is reported that there is a drift east
"HSBC's CEO Mike Geoghegan will now be based in Hong Kong rather than Canary Wharf. This is bad news for London: the world's centre of gravity is moving East. But the real tragedy, judging from his latest anti-City rant yesterday, is that Gordon Brown wants to accelerate this power shift. Our loss will be Asia's gain – but that's the madness of populist politics for you.".
Of course, following that, the envy merchants of the left are pushing for more self destructive policies, with Idiot Savant cheering on Slovenia's crazy new 90% tax rate on salaries and bonuses in the government assisted banking sector. Sounds like a great opportunity for lawyers to find loopholes, be simpler if the banks were left to fail though wouldn't it?
While bankers should be accountable for failure, what makes politicians accountable when they destroy vast quantities of wealth in a moment? Like Gordon Brown did in selling half of the UK's gold reserves in 1997 when gold was at a 20 year low.
Why should anyone trust this man with their money?
He says:
"It will mean an end to automatic bank bonuses year after year. It will mean an end to immediate payouts for top management. Any bonuses will be deferred over time so they can be clawed back if they are warranted by long term performance"
He lies that such salaries were to blame for the financial crisis, ignoring the loose credit from the Bank of England over many years, and the kneejerk willingness to bail out all banks with taxpayers' money, rewarding the foolish, whilst the prudent retain them as competition.
Allister Heath in City AM puts it well "pay's role was merely tangential during the current boom and bust – and for that matter, in all previous bubbles.
The main drivers were the ridiculously low interest rate policy pursued for years by a Fed obsessed with preventing all recessions; the crippling East-West imbalances in savings and investment flows ....; global rules which promoted low capital reserves for banks, with many loopholes; and a giant intellectual error which thought that bubbles were impossible, that house prices would never fall and that statistical models had allowed bankers and regulators to control risk completely."
furthermore "All the restrictions on bonuses being dreamt up by the Fed or G20 would have done nothing to stop the bubble. We would have had sub-prime and CDOs. Life is not that easy; what a shame nobody wants to know."
So the UK will be the first Western economy to directly regulate the salaries in the banking sector, a measure that will simply chase away the financial sector from the UK. Already it is reported that there is a drift east
"HSBC's CEO Mike Geoghegan will now be based in Hong Kong rather than Canary Wharf. This is bad news for London: the world's centre of gravity is moving East. But the real tragedy, judging from his latest anti-City rant yesterday, is that Gordon Brown wants to accelerate this power shift. Our loss will be Asia's gain – but that's the madness of populist politics for you.".
Of course, following that, the envy merchants of the left are pushing for more self destructive policies, with Idiot Savant cheering on Slovenia's crazy new 90% tax rate on salaries and bonuses in the government assisted banking sector. Sounds like a great opportunity for lawyers to find loopholes, be simpler if the banks were left to fail though wouldn't it?
While bankers should be accountable for failure, what makes politicians accountable when they destroy vast quantities of wealth in a moment? Like Gordon Brown did in selling half of the UK's gold reserves in 1997 when gold was at a 20 year low.
Why should anyone trust this man with their money?
1 comment:
I trust he has also clamped down on MPs perks while he's at it?
What a ridiculous reaction. What a complete lack of economic nous. As you rightly state, the salaries had nothing to do with the collapse; they were merely a side attraction.
It's all good news for Hong Kong.
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