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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think we shouldn't have bothered to bail out the banks

28 replies

Normantebbit · 12/01/2011 21:30

FFS my money is going straight into his pocket!

From the BBC:

Lloyds Banking Group boss Eric Daniels is in line for a bonus of about £2m this year, the BBC has learned.

Mr Daniels, who steps down in March, has turned down a bonus in the past two years but will not do so again, sources told BBC business editor Robert Peston.

The government bailed out Lloyds after it took over HBOS in 2008, and still holds a 41% stake in the bank.

On Tuesday, Barclays boss Bob Diamond said he had not decided whether he would accept a bonus this year.

On top of the bonus, Mr Daniels could receive shares worth another £2m from a long-term incentive plan, according to our correspondent.

The announcement on the bonus will be made in February, he added.

OP posts:
expatinscotland · 12/01/2011 21:32

YANBU

But soon a load of people will be here to expound in great detail how ignorant you are to believe this and how much we need bankers like these and how the sky would have and will fall without them.

usualsuspect · 12/01/2011 21:33

YANBU

Original poster
Normantebbit · 12/01/2011 21:40

I just don't know how someone who obviously hasn't done z very good job (to put it mildly) could be worth an extra £2m!

In fact, if he had managed to turn water into wine, he still wouldn't be worth that. As I am paying his bonus, why don't I get a say I. Now much it should be?

(a big fat zero)

OP posts:
Original poster
Normantebbit · 12/01/2011 21:41

Bloody phone. 'how much it should be'

OP posts:
mozette · 12/01/2011 21:43

YANBU

danabu · 12/01/2011 21:45

Well, if we hadn't bailed them out, what would have happened? Would it really have been so bad? (I have no idea, I've just wondered about it for a while)

Savings would have been mostly protected.

Not so good for shareholders and pension fund investors.

I'm just surprised that billions were handed over without apparently any legally binding repayment plan in place. This is probably far too a much of a simplistic view!

mozette · 12/01/2011 21:48

I have no problem bailing them out now that I think about it - however paying the tax payer back should be their first priority NOT bonuses

expatinscotland · 12/01/2011 21:51

'Well, if we hadn't bailed them out, what would have happened? Would it really have been so bad?'

We'll never know now, but I'm sure posters will soon be on here to patronisingly inform us all that, yes, the sky would have fallen in had we not bailed them out and that we need these people and their superior intellect to save us from certain Armageddon.

emy72 · 12/01/2011 21:56

YANBU

and this government never had the courage to stand up for the taxpayer. Much easier to take child trust funds and child benefit off people, take university funding off etc...the list is endless...

bees474 · 12/01/2011 21:57

YANBU YANBU YANBU

Original poster
Normantebbit · 12/01/2011 22:00

Iceland didn't bother to bail out it's banks

OP posts:
TheCrackFox · 12/01/2011 22:01

YANBU

We weren't asked if we wanted to bail them out.

BeenBeta · 12/01/2011 22:01

YANBU.

If the banks had not been baied out the shareholders and bondholders would have lost money but the basic banking system could have been resurected and depositors protected and started up again with new banks under stricter regulation.

None of the bonuses and the tax payer bail out would ever have happened. It really could have been done in a matter of a week.

pascoe28 · 12/01/2011 22:05

expat/usualsuspect - predictable lefties that you both are, I do agree that we should not have bailed out the banks.

We should never bail out any firm...nor person, who has failed to manage their affairs properly.

But should bonuses be paid to the top-performers? Yes, absolutely. For they are helping to return these banks to profitability, thereby reducing the liability on the taxpayer.

One has to ask, what would you rather be done with the money set aside for Eric Daniels' bonus?

Your criticisms are based on envy.

FakePlasticTrees · 12/01/2011 22:09

Well, we didn't bail out Barclays...

Original poster
Normantebbit · 12/01/2011 22:11

Why not put that £2m back into education or health? Why not use it to benefit the tax payer.

If he's that great maybe they could have a whip round at Lloyds HQ and get him some John Lewis vouchers ?

OP posts:
Original poster
Normantebbit · 12/01/2011 22:13

And if I was he, I would not take that bonus.

OP posts:
CrispyTheCrisp · 12/01/2011 22:14

The banks will repay the monies to Government, tax is being paid on the bonuses and many thousands of people are still employed. Plus much of the bonus money will be spent in the UK economy.

It may leave a nasty taste, but it is not ALL bad for the taxpayer

Takver · 12/01/2011 22:15

YANBU at all.

I have never understood why Gordon Brown/Labour didn't take them into temporary national ownership right back at the start of this sorry saga.

If I understand correctly (maybe someone is around who knows more about it than me?) Sweden did something like this when they had a banking crisis, hived off all the potentially bad loans into a 'bad bank' which was kept under state management to redeem what could be made from it, and then sold off the 'good banks' that remained.

Even better they could have turned the 'good banks' into mutuals.

Paying bonuses to a superstar - fair play - but right now big bonuses are going to those who fuck up too. As far as I can see, there is no risk, it is purely a one way bet.

Why will things be different in future - if ever there is a case of moral hazard in action, this has to be it.

huddspur · 12/01/2011 22:16

YABU if a bank goes bust then peoples savings are lost

Takver · 12/01/2011 22:19

So why not temporary nationalisation, Huddspur? The shareholders lose, but the state supports the bank & hence protects deposits, keeps lending moving etc.

Original poster
Normantebbit · 12/01/2011 22:22

And savings up to £35,000 are protected

OP posts:
longfingernails · 12/01/2011 22:25

YANBU.

Banks should be allowed to fail, just as with any other business. I am a staunch defender of capitalism, but what we saw with the bank bailouts wasn't capitalism at all. Capitalism, sadly, requires failure for those who made bad decisions and took bad risks,

However, given that we have bailed them out, I am glad they are paying large bonuses to top performers (provided it is in a medium-long term share schemes, and not in cash).

Not only will it help taxpayer-owned banks retain and recruit top performers, but more importantly. Over £600,000 out of every £1m set aside for bonuses will come back to the Exchequer. If it had merely become bank profits instead, the Exchequer would get only about £250,000. Of course, I have ignored the opportunity cost of the "value added" to the shares by not paying bonuses - but that is a very nebulous concept, and indeed, anecdotally, it seems that losing senior bankers does far more harm to share price than keeping cash reserves.

expatinscotland · 12/01/2011 22:26

pascoe, namechanger/banned poster/stalker whatever you are, I refuse to engage with people who hide behind namechanges and then spout off that they know all about me when I didn't mention thing no. 1 about bonuses.

so since there's no ignore button here, i'll imagine one right next to your name until you quit hiding.

huddspur · 12/01/2011 22:27

Takver- There has been temporary nationalisations eg Northern Rock

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