ED WON!

Where's the competitive advantage in being so badly hit by the financial crisis that George Soros said that Britain may need to go cap in hand to the IMF? Germany and France were not in such dire straits because they are not reliant on financial services like us.

"Britain may have to go to the IMF for a huge financial bailout, the influential investor George Soros warns today."

business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5989746.ece

If that's competitive, then maybe we should be a bit less competitive and a bit more "prudent"? as Gordon Brown used to say.

The over-reliance on finance has harmed our other industries, our best minds leave university and want to enter finance because of the huge rewards that are avaialble in the casino economy. Meanwhile our productive capacity is left to languish because our other industries cannot offer the rewards and bonuses that the fatcat "megas" get for gambling with other people's money.

Our top graduates read reports about Lusha, the chimpanzee, outperforming 94% of Russian "megas", and are right to think that this is money for old rope. Why slog your guts out studying engineering or science, only to be paid a pittance, when you can earn "loadsamoney" like Lusha does, in finance, and if you mess up, the tax payer will still fund your bonus, bail out your employer, and won't touch your taxes in case you threaten to deprive the country of your services.

It would help the uk not to be fleeced by bankers demanding super salaries when good people could and would do the job for a fraction of the cost.

Tdada clearly you have a vested interest in the status quo / establishment.

If banks don't lend responsibly to businesses and instead concentrate on derivatives and selling each other debt from irresponsble lending then this is what is unsustainable. If they cream off profits to line the pockets of fat cat bankers it does nobody any favours. If they are free to take risks knowing they will never be allowed to fail this is unsustainable.

I do work in Fin Services and in 2009, I would have been better off financially by going abroad and doing nothing, just taking a long holiday than staying in the UK and working. But I chose to stay cos of my children but some of those with more at stake leave. So how does that help anyone in the UK?

No one here is being precious about the banking sector but like any other industry, UK needs to continue to be competitive if it wants to continue to be market leader. London is/was one of the three leading FIn Serv centres in the world and earns us stacks. Heard R4 programme about the number of people in public sector in Wales and the big hit to come in terms of unemployment now that govt banking revenues are so much less.

I would like it if the uk could raise itself up the international rankings of how good a place it is for children to grow up in.

We are still worshiping at the wrong altar.

The banking sector is not the golden goose they would have us believe.

FattyArbuckel and Claig- are you the same person(s). You both make these sweeping statements as though it is fact.."it is not a sustainable industry" ...what absolute rubbish...if one industry will always exist then it is financial service...yes it might become more commoditised, yes it will be transformed but to say that "it is not a sustainable industry" seems to me to be very ill informed. So what will make Fin Services disappear? I think that the UK may lose some it's competitive advantage but that is an entirely different point.

Claig hopefully you are already an mp if not you need to stand!

well said FattyArbuckel. Let's do what a real world powerhouse like Germany does.

Financial services dependency has proved to be a house built on sand, it is not a sustainable industry. Let it go to switzerland if that's how it plays out, we should concentrate on getting our own house in order.

Let our banks concentrate on the real business of solid banking, lending to businesses, and let others play with speculative banking.

We can get good people to run uk companies without paying ludicrous salaries.

I was only half way through reading the thread when I wrote previous message so it probably does not make whole lot of sense in the context of a discussion about bankers but I thought we were talking about the labour party leadership election !

Jeez, why does everyone keep saying left wing as if it is an insult ? what exactly is wrong with being left wing ? What is wrong with unions ? They stand up for people who would be walked all over or ignored if they tried to stand up for themselves.

We shut down our manufacturing industry, our shipbuilding, our steel etc. and shipped many of our industries overseas following the holy grail of globalisation, which the international free-flowing capital markets wanted. That's why we are now so reliant on financial services. Meanwhile, a country like Germany, is one of the world's top exporting nations, and only a decade ago was the world's top exporting nation (more than the USA and China and Japan). I don't know where Germany now ranks in exports. That's why Germany was not affected as much as we are by the financial crash. That's why Germany is the paymaster and powerhouse of Europe and we were close to calling the IMF in, as we did once before when Denis Healey and Labour were in power.

We have lighter regulation than the USA, which is the heart of capitalism. People like Bernie Madoff are in prison cells in the USA. We have lighter regulation than most other countries, which is why Sarkozy threatened to walk out of one of these much vaunted "global" summits on "global" regulation, because he wanted some tough regulation introduced, He blamed the Anglo-Saxons and their lax regulation for causing the problem.

www.timesonline.co.uk/tol/news/politics/G20/article6005810.ece

Sarkozy had heard all the "global" hot air about "global" regulation, but he was starting to think that it was all just words, just "global" bullshit, because when he wanted some action, he found only hot air.

Well just let's speculate then that the development of the Fin Services sector prevented us from developing some other fantastic sector that would have outperformed and would not have needed rescuing...err like the US car industry right....fact is that UK Fin Services was a key engine of the UK economy. I agree that we were over-exposed to the Fin Services but I wonder whose fault that was?

Oh and if you want to dig out the hard data then you can at world bank data as opposed to broad swipes from the Daily Mail based the direction of the political wind/public popularity.

Anyone wants to bet that the tax payer doesn't make a sizeable profit from the bank rescue....it was the shareholders who lost out NOT the tax payer!

No, that doesn't prove anything on it's own. We need to know how the uk would have been different in this alternative scenario. You assume everything else would stay the same, whereas of course this is not the case

We only need to obtain the GDP contribution or tax revenues of Fin Services.

Fact? How can you prove that assertion?

Claig- I am not defending the morality of banking bonuses. My origoinal point was that you need multilateral action. Act unilaterally and they can simply go off to Zurich and give the Swiss Govt a slice of the bonus rather than the UK.

The Tory party is well supported by hedgies so I prefer to deal in logical and factual arguments rather than emotive broad swipes for public favour.

The UK did very very well out of Fin Services tax revenues in the last few decades. If you removed that, then we would have been in shites along time ago...fact.

The "megas" only still have a job, because of the public bailing them out with an amount of money unprecedented throughout all of history (a figure in the hundreds of billions). And for that we will get back in the region of possibly 30 billion from an increase in bank shares etc.

www.independent.co.uk/news/uk/politics/163850bn-official-cost-of-the-bank-bailout-1833830.html

This is what Martin Wolf said in the Financial Times

"First, all the institutions making exceptional profits do so because they are beneficiaries of unlimited state insurance for themselves and their counterparties. As Andrew Haldane of the Bank of England argues, the state has ?become the last resort financier of the banks?.* In the UK, total support amounted to a staggering 74 per cent of gross domestic product. These must be the largest business subsidies ever.

Second, the profits being made today are in large part the fruit of the free money provided by the central bank, an arm of the state. The state is giving the surviving banks a licence to print money."

without the tax payer, these "experts", these "megas", would be on skid row.

Even Gordon Brown blamed the bankers for the recession

"Gordon Brown has launched an attack on the banking chiefs he holds responsible for the UK?s recession.

During a speech to Labour Party activists, the Prime Minster described some of the country?s banking practices as indefensible and blamed city executives for getting them into ?this mess?."

Even Mervyn King blamed the bankers
www.guardian.co.uk/commentisfree/2010/sep/15/tuc-mervyn-king-lehman-brothers-financial-crisis

and it is interesting that the Guardian published an article by someone defending the bankers, but then again the Guardian also told its readers not to vote for Gordon Brown, but told them to vote for Nick Clegg instead, which many gullible Guardianistas gladly then did.

So we are told we will get back 30 billion because of these clever megas at the banks. But the banks caused the recession, Gordon told us. Will the banks be able to compensate the people who lost their jobs and houses and the businesses that folded? Will they be able to compensate the millions who will be affected by the coming cuts? Will they pay us all back for the 2.5% rise in VAT that we all now pay because of what they did? All of that will probably come to a lot more than 30 billion.

Why don't we make up for the tax shortfall by imposing some windfall taxes on the bankers? Many progressives are calling for that, here and in the States
www.politico.com/news/stories/0110/31676.html

The expert "megas" got us into this situation. Who knows if these same bankers won't do the same thing again? Has their expertise improved? or were the astute Russians right when they said (after finding out that Lusha, the chimpanzee, had outperformed 94% of the Russian megas)

'Everyone is shocked. What are they getting their bonuses for? Maybe it's worth sending them all to the circus.'

jackstarbright - I completely agree with you; diversify the UK economy but don't kill off the the services sector!

I don't want to live in a society where there is such a great gap in wealth between rich and poor. If, and I think it is definitely an if, that means that overall tax revenues fall, I think that is a price worth paying.

"I fail to see a problem with this. If bankers want to earn stupid money and are prepared to live abroad if necessary for the priviledge that suits me just fine. I have no interest in keeping the super rich in the UK."

FattyA -.You might be prepared to make up the resulting tax shortfall by an sudden increase in your personal tax - I suspect many others won't be as keen.

Tdada - I don't think we should chase off the Hedge-funders. I'm just not comfortable with so much of our tax revenue being generated by so few people. We need to broaden our tax base in the medium term, and not be so reliant on the finance industry.

Then there is the Insurance scheme between RBS and the Govt which is making the tax payer a nice little profit of a few BN. read here

And then there is the funding lines that were provided by the govt which is at a nice premium.....just some examples of under reported facts.

Now you please show me exactly which deal the tax payer did with RBS/Lloyds that lost us/likely to lose us money? Quite the opposite.

Friend of mine brother is a Tory MP...he admits that the plan is to sell RBS + Lloyds for a thumping big profit just before the next election. Read here

FattyArbuckel - I am simply saying that we lose revenue by flight of capital/personel overseas. You must understand that

The tax payers profit is a function of the difference between the share price at acquisition and the current share price. Share price is not a function of bonuses. For example Goldman Sachs pays some of the highest bonuses, yet has some of the highest shareholder return.

I am not defending bankers but I find that these broad brush tabloid remarks are not supported by the facts. I can dig out facts to show you that the tax payers investments are "in the money" . Would be nice if you could support your arguments with hard facts.