to think that bankers who sue take legal action to protect their bonuses should ...

[MmeReindor]

be made to live in a grotty mouldy B&B for a month, so they can see the consequences of their actions. There are people who have lost their jobs because of the recession, who have lost their home, lost everything.

And the bankers still insist on a bonus. On top of their already well paid job?

I am speechless.

The Guardian reports today that this may happen.

Already in Germany, the Commerzbank is facing a legal challenge from its subsiduary, DresdenKleinwort

The bankers claim that Commerzbank, which bought Dresdner Kleinwort, should have honoured an agreement to provide a ?400m bonus pool for 2008. Dresdner Kleinwort reported a ?6.3bn loss for 2008, which Commerzbank believes changed its commitment to the bankers

What really gets my goat is the comment about taxes, from a think tank.

City bonuses are expected to total £4.2bn in 2011, down 38% on the £6.7bn paid out last year, ... will generate about £2.5bn for the Treasury, ... this is still some distance ...from the £6.8bn collected in the peak of 2007-08, clearly illustrating how the taxpayer also misses out when the City pays lower bonuses,"

How in the name of all that is holy, does that even make a bit of sense?

We bail the banks out with taxpayers' money, but should be grateful that we are getting £2.5bn back - if we even get it back, as no doubt some of it will vanish in an off-shore bank account, or via shady tax avoidance.

eg RBS right now. They say "we're off to HK" - the govt indicates otherwise.

Correct and the problem is exactly that banks like RBS would be the ones to stay. Ie. the ones who are broke unless they have state support. Whereas the ones which weathered the storm because they didn't make crazy aquisitions and loans relative such as HSBC & Barclays are the ones which would be the most likely to move. In other words, we'd end up with the shit banks and risk losing the better ones. Not a terribly good idea is it?

Garlic. Let me ask you this question. If banks can 'magic as much money as they like', how come some had to be bailed out by taxpayers? How come then that they are rushing to borrow money from the ECB? Even then they must put collateral down. I mean if I could just conjure up money, why would I borrow it and agree to pay it back with interest?

Only the BOE in the UK can 'magic' money and even then, the cost is inflation. Mark my words, we'll see a big jump in interest rates as a result over the next few years. In theory, the ECB could print money just like our BOE has done but because of Germany's reluctance it's not been allowed to.

Macro-economics isn't exactly like a household budget but many principles are the same. For example, outgoings greater than income equals disaster and the way out of debt isn't to borrow more money!

Banker's caused a mess initially with the sub-prime problem yes. But that storm has long passed. The current problems with the Eurozone is ultimately down to southern European countries like Greece borrowing far too much money. Now you could argue it's still the bank's fault but that's akin to someone up to their eyeballs in debt blaming the credit card company for giving them a card.

sorry niceguy - you are missing the point that nationalised banks i.e ALL OF THEM! wouldn't be able to up sticks. I think I have written it about 3 times so far. Just so's you know.

Niceguy - If banks can 'magic as much money as they like', how come ...

The bans are allowed to create debt-based money.

Only governments are allowed to create money that isn't based on debt. Governments creating, ahem, quantitative easing (printing money) tends to devalue the currency as the government's country is only worth what others think it's worth. There are loads of good explanations about this on t'interweb right now, should you wish to find out more. I've put links to Positive Economics and NEF on our blog's blog list; you could start there.

However, all you need for the discussion on this thread is: Banks are allowed to create debt-based money.

akin to someone up to their eyeballs in debt blaming the credit card company for giving them a card.

That's exactly what I did when I had money. By borrowing a lot, I achieved a sky-high credit limit, low interest rates and lots of lovely gifts from the banks trying to retain my custom. I moved all the balances around every weekend.

The more money circulates, the more it's worth. This is true on both a personal and a macro scale, unlike 'budgeting' and 'saving'. I made my money worth more by keeping it on the move, in and out, getting plenty of exercise.

That's pretty much the only way your analogy works. Big money is not the same as personal money. I can keep telling you but maybe someone on another website has a way of describing that'll make more sense to you.

Because I'm a persistent fucker, I'm going to try again.

Imagine you're a brilliant poker player. You know you're world-class, but you don't brag about it (obviously; you're a poker player!)

You meet someone who isn't rich but has something you covet - let's say he's got a lovely little beach house on a Greek island. You encourage him to join in your card game. Playing for affordable stakes, you lead him to a point of confidence and raise the game. He protests that he's now out of his league and you wait - knowing he's racking his brain for something he can offer to keep him in the game. He stakes his Greek house, you win, game over.

The man was foolish but you, an expert, led him to believe he was playing a game he could win. If there is a 'fault', it's yours because you basically conned him. The stakes you lost during the early stages were not a 'cost' to you because you were playing for the future gain - his house.

You're the bank; he's the bankrupt ex-home-owner.

Any better??

Sometimes you really need an edit button, don't you? I missed a bit out of the poke story.

... you lead him to a point of confidence and raise the game, offering him something you think he wants - doesn't matter what it is, as long as he wants it.

The stakes you lost in the early stages were no more to you than the bank's expense in sending out a million free Parker pens or taking an investor to the Oscars, depending on the kind of custom they want from you.

MY Husband is a banker (she cowers waiting to be flamed) he is not a high flyer, or a wide boy, but a rather ordinary man of 50. he earns under 75k, more like 55k As do many of his peers. He manages a team who are on 25k-40k
The bank is in London, so we live in the very expensive London area. his commute to the bank costs 3.5k a year. We have 2 old cars, 3 big kids. The bonus pool is very small in his team an average of 1-3k a year before tax, not a lot!
So before everyone slates bankers, the vast majority are hard working (7.am-10pm) middle aged blokes, whose pensions ahe shite, and are treated as shite
my DH deserves every penny he earns! I have met some of the high flyers, and yes they are brash, harsh, crass but my God they are bright, they have to be....and of course some make mistakes too.
Generalising that all bankers are to blame for our crap economy, is quite frankly niave in the extreme

Nobody's said "all bankers", chicky. They said "bankers".

Well perhaps no-one said 'all bankers' on this thread, but the meme of choice throughout the media and the public generally is 'The Bankers'. That sounds pretty all-encompassing to me.

Of course no-one thinks that some middle-management type in credit analysis or loans admin or whatever is responsible for the banking crisis, but the bile is directed at anyone/everyone who appears to be very senior without necessarily an understanding of what part their position may or may not have played in how it all panned out.

And even at a more senior level it is not fair/true to say 'if they are so bright how come none of them saw it coming?'' Plenty of people in the financial sector were increasingly uncomfortable with the rapid advance of a smoke and mirrors culture, but what could they do, on a personal level? Just like chicken licken running around shouting that the sky was going to fall in, people do not have a tendency to listen when they are too busy enjoying the party.

If your friend is earning £55K + you are in the top 5% of earners. If you earn too, push yourself further up. I can feel you thinking 'but we are not really that wealthy - there are people we know of who get paid more' - that's how it works, everyone on big salaries think they are 'poor', but when you get to the level that you can inflate your own salary because you think everyone else's is more inflated, that's why you get the bollocks at the top happening.

I have to say that I am even more angry at middling plodders who get paid over £50K in their career doldrums - that to me is an even more smug, unproductive and reprehensible form of comfortable stealing. Many people on these supposed 'middle' salaries still think that people on low incomes make their decisions because of low morals, not because of low income. Interesting that in your husband's case, his 'team' is earning around the London minimum living wage, and will be hiding their discontent and relative poverty by borrowing from banks similar to the one they work for (if not the same one). This has the effect of meaning that if his 'team' get into financial difficulties, instead of blaming the bank for paying only a subsistence wage, we instead blame each individual for irresponsible borrowing, rather than their employer for both irresponsible salary structures, and irresponsible borrowing. His 'team' will probably make their money from this type of borrowing, compounding the problem.

Its disgusting.

For the record, 55K salary and 1-2K bonus is not 'shite' and stop your one-upmanship complaining about how private sector pensions are 'shite' - if so why don't you a) give it to charity b) get organised and get representation like your colleagues in the public sector. By complaining about 'better pensions in the public sector' you are really saying that you are jealous about Union representation, whilst also being afraid that if you join a union it will somehow be a stain on your character. The reason private sector workers have their bad deals and can be played off each other individually is because their labour is not as organised and co-ordinated as their management is. You can't bleat now about the selfish game not paying off as much as you'd like!

I don't think £55k is a great wage for London, tbh. Not with the housing prices etc.

Garlic
Excellent post. That explained it very well.

I was reading this yesterday, which was in a similar vein, fascinating stuff.

Missingfriend
That is a bit harsh. You have no idea what Chicky's DH does.

Missingfriend, Leave my DH alone! for your record I work with disabled people and earn a pittance, and my public sector pesion is better than my husband,
You are an ignorant! Especially if you think 55k is a lot in London. The national average wage is just that, National.
If you are green with envy, which I assume you are, move, get another job, and stop thinking you know better, because you don't!

Walk a mile in my shoes lady!! buy the way what do you and your DH/partner do or earn??? The green eyed monster is such a sad thing to be at Christmas

Oh Yes and Missingfriend (assume you are missing plenty) I am sure what you do is disgusting too! blag of the state no doubt!

Hey. Chicky. That is NOT on.

I defended you against MissingFriend's comments.

"blag off the state" is a disgusting thing to say.

WTF is wrong with people at the moment. Can we not have a civil discussion about politics and society without personal attacks and nastiness.

Shame on both of you.

I do love the public sector defending themselves against the private sector rubbish pensions. There was a head teacher interviewed on the news during the strike (who earnt £60k and was on for a £20k plus pension!) who said that the pension companies should be working harder for private sector workers. Hilarious. Another bloody world!

Pomme
Isn't it the case though, that previously it was the situation that private sector workers generally earned more than public sector, so were able to make their own provisions for their old age. If you don't have a decent pension, then put money into a savings scheme.

I am not relying on my pension. By the time I retire, I will be lucky if there is anything left. That is why we have a private saving scheme that will pay out when we retire.

I don't think that old earning adage rings true anymore. A lot of people I know in my private sector industry earn the same or less as people I know in the public sector whilst working longer hours.

But yes, private sector workers have to plan and save too - it's now just that they have to put away a lot more of the same earnings to have something to live off.

My plan is to basically not retire - retirement sounds awful if you ask me :)

ha.

Yes, think that is true.

It bemuses me tbh, this with pension envy in Britain. I think it is worse than in Germany. We have the opinion that if your pension is not great, then you have to save some money for your old age. Or at least buy a house so that you live rentfree.

Assuming that your cost of living vs earnings is not so narrow that you cannot afford to save anything and are happy that you get to the end of the month.

YANBU but I suppose if they are legally entitled to it then I suppose they have as much right to take legal action as anybody else no matter how grating it may be. Having said that the behaviour of the banks isn't the only reason we are in our current predicament. We've been on an unsustainable path for some time.

Don't be mental, the average wage in London isn't £55K let alone the country No wonder you think you earn a pittance if you think that £55 is an average wage.. what's your 'pittance' £20k a year?

According to a recent documentary £40k NET is the average household wage where there are 2 working adults.

Interesting salary info here