Bankers going to get their bonuses anyway

[jujumaman]

here

I don't know what to think about this.

We have a friend who works at another bank that has been bailed out by a foreign govt. He was telling us this weekend that he's planning to sue because he may not get his promised bonus of £2m or so, and will "only" end up with his salary which is prob around 250k

I know bonuses are intrinsic to banks' cultures but how - in these god awful times - can £2m bonuses be justified. My friend says his was the only division of his bank which made money last year, so why should he be penalised for others' faults? My feeling is every taxpayer is being penalised for others' faults and someone who is still earning an excellent salary should graciously accept it and be grateful he still has a well-paid job. But my dh tells me I'm being naive and that bankers will carry on getting these vast bonuses just as before. Not convinced by arguments in article I've linked to. Anyone with more knowledge of the city than me like to defend my friend's position (I v much like him personally.

Exactly piscesmoon!

I have a number of colleagues in the same profession as mine who previously earned significantly more money in other jobs. Without exception they say that the job they do now is more intellectually challenging, more intense and far more socially beneficial.

It really is nonsense to suggest that high earnings are always a result of intelligence, hard work and determination! Or that lower earnings are a consequence of lower intelligence and less work!

I agree Violethill, some people just don't realise that not everyone thinks money is the most important thing in a job. I go for interest everytime and job satisfaction.
A banker earns enough in the first place. They should be working to the best of their ability, whether they expect a bonus or not. Luckily nurses don't say 'I will only put effort in if it gets me a bonus!'

piscesmoon - You don't get it. I said if they passed the same exams I did. Meaning, if they got into the same business.

So you think nurses deserve to be paid more than fund managers... why, exactly? Because emptying pans, taking blood pressure, and inserting a canular are such rare skills?

Oh wait, I know. Because they care, isn't it?

Interesting to see that you stereotype all professions, not just finance - all bankers are greedy bastards and all nurses are caring, selfless Florence Nightingales

"It really is nonsense to suggest that high earnings are always a result of intelligence, hard work and determination!"

It would have been, if I said anything of the sort.

Spookette It makes me laugh when I hear that line: that bankers have to be paid such high salaries lest they go abroad...

Oh, let them go!

CoteDAzur said:

I was listening to Any Questions this afternoon and one of the panellists was an employment lawyer turned MP. He said that he had drawn up the contracts for a great many bankers and any lawyer worth their salt would insert a clause, as he always had, that bonuses would not be paid if, essentially, the bank performed badly or the non-payment was for valid and non-capricious reasons. I can't see how anyone at RBS (and others) can argue that this hasn't been the case and I can't believe that any institution would issue contracts without this sort of loophole.

Cote, I think you'll find the skills of a good nurse are quite rare, in fact. I'd make a terrible nurse (and so would 99 per cent of bankers). There's a bit more to it than taking blood pressure. I'm sure there's a bit more to banking than just taking the money, although it's hard to work out what on earth that is, right now.

Clearly the skills of a good banker are, in fact, much less common than we've been led to believe.

Nurses can save lives or help you die with dignity and without unbearable pain - what the fuck do bankers do that is so much more important than that?

But most of the "bankers" at RBS are actually cashiers/call-centre workers/support staff on very ordinary salaries, expecting bonuses of maybe £2/3k which they have worked hard for, achieving everything that was asked on them in very difficult circumstances. You don't thinK they should be paid what's due to them? IMO that's the same as letting people work over-time and then refusing to pay them for it.

I do have a problem with all of the workers getting bonuses......................however acknowledge that perhaps there is less of a moral vacuum if you have been paid at minimum wage with the promise of £2k at the end of it.............whereas if you are involved in the decision making (the extremely BAD decision making) and are expecting a 6-figure+ bonus, then your values are shot to pieces.

Give - all the workers won't get bonuses, only those who achieved the objectives set for them at the start of the year. All this sensationalism about the huge figures about to be paid (to several thousand people, so if you work it our per head, not that big at all) will mean that those call-centre workers don't get paid. Thanks

Of course the men who brought down the banks shouldn't get theirs and I hope to god the system is set up properly so they won't, but lots of parts of the bank did make money last year, or things could have been even worse.

"Nurses can save lives or help you die with dignity and without unbearable pain - what the fuck do bankers do that is so much more important than that? "

Exactly-we can't manage without nurses. They are a lot more important and skilled than bankers.

hmm, cos the country functions really well when the bankers mess up.....

just a point to consider - is there anyone on this thread who ISN'T involved in the banking industry (for want of a better word) in some way (that includes partners, family and good friends who work in finance) who thinks they should all get their bonuses?

It would be more interesting to know who supports the bonuses when they don't have a vested interest in it.

No one I guess thumbwitch!!

Some views on this thread are really

I love the arguement that we have to pay the bonuses or else the clever ones will go elsewhere then 5 minutes later we're told about all the wankers bankers loosing their jobs.

Unfortunately the staff on more ordinary wages happen to work for a failed company, it was bailed out by the gov with the plan (and presumably AD and GB thought they had an agreement) being that the money was lent on not given in bonuses I would suggest that those staff should simply be grateful that every man, woman and child in this country has agreed to pay £4,000 to allow them to keep their job because they havn't for many other workers.

not me, thumbwitch!

Seems some people will insist that black is white even when it's midnight...

Cote - you are the one stereotyping professions! I don't think pisces or indeed anyone else suggested that people should be paid whopping great salaries because they care - what a load of tosh- someone could care deeply but not be very good at their job.

The point being made was that there are many jobs which require a high level of skill and qualification, where you need to put in very long hours to do the job effectively, and where you carry huge responsibility (responsibility for people's lives in some cases). There are many jobs which are hugely more important than finance. The problem is, bankers have somehow got used to the idea that they are a special case; that they 'deserve' huge incomes and bonuses even when they are pretty shit at their job, and even when the banks they work for are only hanging on in there because they've been propped up by the taxpayer. Time to wake up and join the real world.

If bankers want us to think they deserve their huge bonuses then this type of thing doesn't help the Sunday Times-leering at scantily dressed women!
Women bankers excluded.

Imo, the focus should switch from the greedy bankers to the imcompetent Gordon Brown. He should have set legal conditions about all this before taxpayers' money was handed over in the first place.
All he ever seems to do is "give warnings" to the bankers, implore the rest of the world to bail us out by way of "international co-operation", say he is really cross about rich people being "unpatriotic" by hiring lawyers to hide their wealth in all those tax havens that he facilitated for years as chancellor.
Why doesn't he show some balls like Obama and Sarkozy and just LEGISLATE to bring an end to this financial mess.

INcompetent Gordon Brown.

GivePeasAChance - re "I think the original poster clearly understands the system more than you do............if it was not gambling......no-one would be in this mess"

Sure. A research scientist understands finance world better than someone who has made a career in it

Or, possibly, you just want to think she does, because she agrees with you.

I have no idea what you are talking about in the rest of your post re "belief in financial industry that undstructured randomness found in life resembles structured randomness found in games (i.e. gambling games)"

Are you talking about Game Theory?

What are you talking about?

"financiers thought they were so very clever and could predict what was going to happen in the future with 'clever' mathematics and formulas..........but they have clearly shown that they can NOT!"

Anyone with half a brain knows that if someone can reliably and accurately predict future events, especially events in financial markets, then they would be so rich so quickly that they would not need to work in a bank. So do you realize that what you are saying doesn't make sense?

I have worked as a financial analyst, as well as sector and market analyst, and this is what happens The people who tell investors what they think will happen (Will interest rates go up or down? Will EUR/USD go up or down? etc) analyze available data, and stake their reputation on the recommendations they give. The good ones are right more often than they are wrong. Nobody claims to be right all the time, and nobody expects them to be.

This is not magic and does not involve gazing into crystal balls. Economies work on certain relationships between money supply, inflation, unemployment, etc. Currencies and stock markets are affected by these factors in their own way - ex: money supply increases (country prints money) > currency loses value.

"And they were using phoney statistics with very phoney morals"

Have you somehow discovered some incorrect data or is this yet another baseless prejudice?

Cotes,

In the last few years, banks have employed people with a strong mathematical background because they use quantitative analysis (known affectionately in the industry as Quants") to work out the pricing of stocks and bonds. In fact, in the USA, many rocket scientists who have worked on the space programme have gone to work in investment banks because of their mathematical bankgrounds and their understanding of how to use as well as manipulate the formulae (mathematical and statistical formulae depending on the type of quant analysis one is involved with).
Despite these mathematical models, the market has crashed, traders have no idea on whether prices will rise or fall because they forgot one fundamental truth. People are unpredictable and markets are at the mercy of how confident people feel about what they are buying into.

The one thing this financial tsunami has shown is that trading is not an exact science and as one emminent economist said, the illusion has been shattered and what has been happening can only be described as voodoo finance and the black hole as "financial dark matter".

Definition of gambling is "Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Typically, the outcome of the wager is evident within a short period."

That describes the activity investment traders imo. Investment traders are gamblers and know matter how much they have tried to turn their activity into an exact science, this economic climate has demonstrated that it will always be based on guess-work, gut feel, stab in the dark or bury your head in the sand and hope for the best. Unfortunately, too many people now have to bear the brunt of their lack of discipline.

edam - Sure empathy and kindness are great when you are ill. And it would be brilliant if a nurse were kind to a suffering patient.

But that is not the point. There is a reason why a nurse is paid what she is and a banker is paid what she is.

"Clearly the skills of a good banker are, in fact, much less common than we've been led to believe"

That is what his whole thread is about, isn't it - that a small part of the industry screwed up and so all the hundreds of thousands of people working in finance must be idiots who don't deserve anything.

spokette - I am quite familiar with analysis of stocks, bonds, markets etc.

When you talk about "quantitative analysis", you are mixing up two things: Fundamental analysis and technical analysis.

Past performance is used to predict future movements of stocks etc only in technical analysis. That is where you see lots of lines on price graphs. This is what traders use and has limited success in short term and little success in long term investments.

Fundamental analysis is where you look at a company's actual numbers and estimate what its coming quarter/year might be like, depending on its own strengths/weaknesses/etc. This is what serious investors listen to, and where you will also see the analyst value the company and give a target share price, for example.

"Despite these mathematical models, the market has crashed"

That is not surprising in itself. Booms are inevitably followed by busts. This is not the first and will not be the last.

"traders have no idea on whether prices will rise or fall"

You must be talking to some very clueless traders. Do they still have jobs?

"People are unpredictable and markets are at the mercy of how confident people feel about what they are buying into"

Naturally. That is why 'consumer confidence' is one of the most closely followed economic indicators.

People are not that unpredictable, by the way. They feel confident when things are going well, and that confidence vanishes when bad news start coming out. Like, say, several banks crashing and burning.

"The one thing this financial tsunami has shown is that trading is not an exact science"

Nobody said trading was an exact science. Trading is not even a science. It is done mostly on gut feeling.

Or did you mean investing?

"financial dark matter"

That refers to the credit derivatives, iirc, not to the entire financial assets of the world.

Just out of curiousity - Does anyone here know what started this "mess"?

(No points for "Those damned bankers" )