Bankers Bonuses

[Griffin NoName]

Assumption: bonuses are paid out of profts?  (unsure how this works when bonus is paid in shares)

If banks have had to borrow massive amounts to avoid bankruptcy, how can there be any profits?

If there are profits, why aren't they used to pay back the borrowings*?

I feel a bit stupid over this, but I genuinely can't understand it. It just doesn't add up. It all seems very silly, like we must all be idiots.


*I don't buy the argument that good bankers will go abroad and London cease to be a centre for excellence (ha ha) for finance. They may all go abroad for all I care and if London collapses so what, we are a small island nation and perhaps we need to behave like one

[Scriblerus the Philosophe]

Not paying them bonuses would Make Sense. So it will never be done and they'll get fat end-of-year checks like they always do.

[beagle]

It's very simple. Bankers are highly intelligent people, but unfortunately poorly motivated, and so without massive incentives they'll stop washing and shaving and lie in bed all day, drinking beer, eating pizza and watching daytime television.
Apparently this isn't the good thing you might suppose, especially if they do it in Shanghai instead of London.

Personally I'd go with the Tory strategy of forbidding banks to offset the losses of the last few years with any profits going forward.  Just for balance I'd also cancel the gold-plated pensions of those politicians who  have run up 895 billion pounds of off-book public pensions liabilities we also can't afford, and wrecked the good banks by forcing them to bail out bad ones.

[Sibling Zono (anon1mat0)]

The problem is that the guys getting the bonuses happen to be friends (and fund) the campaigns of the politicians that allow them to get away with murder. Here in the States the bailout was literally that, "lets give them a helping hand, and a pat in the back" rather what it should have been: nationalizations of the big failures (WaMu & Wachovia for instance) and inject the money into the system directly that way, while leaving the rest of the banks with the nice option of lending or dieing.

Now Bank of America paid the loans by doing exactly the opposite of what was desired of them: avoid lending and removing as much money as possible from the market to pay the money back and go back to business as usual after.

I have very untaddy (and medieval) thoughts regarding bankers and the more I know, the more medieval my thoughts get.

[Griffin NoName]

It's reverse Robin Hood Syndrome.

[Sibling Zono (anon1mat0)]

Yay for pre-feudal thinking!