Bob Diamond of Barclays

[newwave]

12 million salary AND now in line for a 9 million BONUS

"Dave" is now wiping the spit out of his eye.

I await with baited breath "Daves" fire breathing condemnation of this obscenity of greed the same as he would if the public sector workers went on strike for a pay rise.

Still "We are all in this together" says "Tax avoider" Gideon "trust fund" Geeko in a message from his ski holiday in Kloisters with his banking mates.

No doubt someone will tell me it's the "politics of envy"

It's the politics of envy and the politics of naivete. Barclays weren't bailed out by the government, therefore Bob's salary and bonus has got nothing to do with Cameron. Cameron is not a socialist dictator able to redistribute wealth at will.

Similar bonuses were paid to bankers when Gordon Brown was in charge.

claig, do keep up, where have I said "Dave" can control his renumeration?.

What I want is "Daves" wholehearted and public condemnation of this orgy of greed.

No doubt when the public sector workers quite rightly strike to protect their jobs "Dave" will soon be on his hind legs condemming them.

"Cameron is not a socialist dictator able to redistribute wealth at will" no he is a Tory who would not even if he could.

'What I want is "Daves" wholehearted and public condemnation of this orgy of greed.'

But Cameron doesn't make empty grandstanding statements like Blair and Brown. He doesn't pretend that he has '50 days left to save the planet', he doesn't pretend that he 'saved the world'. He is realistic. He has no power over Barclay's remuneration policy, just as he has no power over Rooney's salary or Sir Paul McCartney's earnings. However, he is in charge of the public sector, which is why he makes statements about that.

Unlike the progressives, he does not make wild statements with no ability to follow through, in an attempt to patronise and deceive the public.

Claig well said.

Bob Diamond? what a great name for someone so rich. Yes, in your case Bob, diamonds are forever........

couldn't dave control how much tax bob pays though?

Lego, you're right, he could do that. But he couldn't just target Bob Diamond. It would have to apply to Rooney, McCartney and others as well.

I suppose he could stand up and say 'I hate rich people for being rich'... but, rather like the OP, he'd just come across as peevish & silly.

It is true that Barclays didn't take Govt money however, there is great big dirty secret in the UK banking system which is that without explicit and implicit Govt guarantees all UK banks would far less profitable and bonuses would be a fraction of what they are. I saw an estimate recently that suggested the Govt guarantees are worth about £100bn per annum.

The fact is that without explicit Govt guarantees on depositors money and implicit guarantees that if the worse comes to the worse the BoE and Govt will step in the banks would all have to raise a lot more capital and pay a lot more for it.

They get cheap funding because of the Govt guarantee. It is as simple as that and that is a fact that has never been acknowledged by any of the UK banks in teh aftermath of the financial crisis.

What I want to see is retail/commercial lending banks split off from investment banking, the guarantee removed from the investment banking arms completely and the retail/commercial arm forced to hold double the amount of capital they currently hold so that tax payers never get called upon to bail them out again.

Make no mistake, these banks would not be able to generate the profit they do or pay out these bonuses without that massive free guarantee subsidy from the tax payer.

Having worked in the City, I know how and why bonus gets paid. Investment banks using privately raised capital where employees leave a lot of their bonus invested in the bank and where there is no tax payer guarantee should be free to pay bonus without any criticism. That is why it essential to separate the retail/commercial bank arms from the investment banks. It is nothing to do with ideology or envy of rich people. It is about economics and proper allocation of risk and reward.

May I ask a, perhaps naive, question? How have we arrived at a state where bankers are paid so much? Why are they paid so much more than say, engineers? Why are (some) Vice Chancellors paid so much more than the Prime Minister?

The investment bankers are paid a lot because they make a lot of money for their bank.

The money they make though often involves taking huge financial risks with the bank's capital though. One major problem in teh recent financial crisis was the true cost of that capital was not charged for or risks measured or managed correctly.

It meant that supposed profits were not profits at all. These bankers took their bonus in Year 1 but losses only occured in Years 2 - 4 which the tax payer then was asked to bailout.

Not all investent bankers take huge risks. Some take hardly any risk at all and ony advise firms wishing to raise capital for which they charge high fees but traders on trading desks are the ones that take the risks and it is this that needs to be very carefully managed. Taxpayers should not be exposed in any way to those trading risks.

The kinds of risks I am taking about are the kind that result in profits and losses of £10m per day (or many times more) on a single desk of 10 people. The numbers are potentially astronomic.

Elsewhere in industry profit is generated by buying raw materials, adding value through manufacturing skills or service and selling at a profit - the whole thing usually involving a lot of people. In banking, financial services and insurance companies the raw material is money and the skill involved is placing it where it makes more money. Millions can be transferred with one click of a mouse, so the profits (and losses, of course) can be enormous for relatively low investment in staff etc. One trust manager can be in charge of a pot of cash worth many, many millions. Share just a fraction of that profit between the staff on a pro-rata basis to salaries and someone gets £500 and another person gets £500,000.

Put it this way. If you gave me £1 million to manage and I made £2 million profit every year with no effort on your part - would you be willing to give me £1 million out of the profits? That is essentially the employment proposition that investment banks give their top employees.

Typically investment bankers will personally take home roughly 50% of what they make in profits. If they make £10 million in profit they get $5 million.

If their current employer will not pay them that then it is easy to go down the road and find another bank that will. We cant stop bonus being paid in a competitive environment - but we can make the capital much more expensive and force banks to hold much more capital as a cushion against the risk they take.

It is not thr bonuses that are wrong - it is the way that taxpayers are expected to shoulder the losses when they occur while bankers get huge bonuses when they make profit. Totally asymetric payoffs encourage unwarranted and uncontrolled risk taking.

Thanks for that.

OK, I can understand why the big cheeses get their slice of the pie then. It does not seem morally right to me though but I guess that is irrelevant when talking about profits. So why do the little people working in financial services get paid more than an equivalent grade engineer? I'm talking about people working in a transfer agency or something of that ilk. Any views?

He wears really bad shoes.

My intellectual input to this conversation.

It's all down to market rates, availability of skilled staff, profitability of the sector. When I joined my first company as part of a graduate training scheme, those of us going into 'marketing' were paid one salary and the graduates heading for 'IT' got salaries 25% higher. All our degree qualifications were equivalent and we had zip experience to speak of but IT skills were in big demand generally and IT grads could get good money elsewhere.

'What I want is "Daves" wholehearted and public condemnation of this orgy of greed.'

But Cameron doesn't make empty grandstanding statement, you pillock, it's condemming greed. There are lots of things "Dave" cannot effect and has no power over but it does not stop him having an opinion or telling the public what it is.

Oh well when the public sector workers and Railway/Tube workers go on strike for a miniscule portion of Diamonds money I hope fucking "Dave" keeps his double standards/hypocritcal fucking gob shut.

Just to say - I know someone very senior at BarCap - Bob Diamond is apparently known as 'Bobby Dazzler' to his staff. Although not to his face.

I've never heard anyone call him Bobby Dazzler, junior or senior. Bobby D, yes.

Its none of Camerons or anyone elses business, Barclays are entitled to pay their employees as much as they want.

Its none of Cameron's or anyone else's business, Barclays are entitled to pay their employees as much as they want.

You may be right but that does not stop him or anyone else having an opinion. It would be good to hear "Dave" say:

"In a time of belt tightening and pay freezes and job losses for many it would be good if those who already have their snouts well into the gravy train would for once try to give a good example to society in general"

After all as "Dave" says "we are all in this together" except, of course for "tax dodger" Gideon "greed is good" Geko, Bob Diamond, other assorted bankers, members of the Cabinet.

Tell me Byrel, is it our "business" when it comes to bonuses in the bailed out banks and do you think "Dave" should have stuck to his "policy" that no one in a bailed out bank should have in excess of a £2000 bonus or is it acceptable for "Dave" to be a lying bullshitter.

Why would it be good for him to say that? He'd just be unnecessarily wading in to an issue that is none of his concern.

Regarding the nationalised banks, I think that the £2000 promise was the nonsense that opposition parties often say. To implement it would be to make the nationalised banks uncompetitive in recruitment and may lead to the best bankers at the nationalised banks going to private banks as they would be offered far superior remunerations.

byrel, are you saying that wages in the private sector are no concern of the government and should not have an opinion on them.

Why would the condemnation of appaling greed by our elected leader not be a good thing?

If we take your stance to it's logical conclusion then the government should not comment on, Egypt, Burma, the middle east. Israel/Palestine etc after all in truth they are really none of our business.

Regarding the £2000 bonus, is your opinon that "Daves" lying is acceptable as he did with EMA and CB.

I think wages in the private sector are a concern of the Government but I don't the point of Cameron saying he doesn't like how much some people get paid. There is a massive difference between this and the PM commenting on issues where human rights are being violated.
Regarding £2000,CB,EMA etc, no I don't like when opposition politicians make silly promises, although the coalition does change this slightly AFAIK the Lib Dems didn't promises to protect CB,EMA etc.

"I think wages in the private sector are a concern of the Government but I don't the point of Cameron saying he doesn't like how much some people get paid"

Just maybe if he called the likes of Diamond a load of greedy bastards those like him may stop and think about there obscene greed (unlikely I know)

As for Human rights by your logic it is none of our business and we should keep our unwanted opinions to ourselves.

The Tory opposition did not make "silly promises" they lied through their back teeth and after the student fees debacle i doubt the Clegg & Co were the reason for the change of position on CB and EMA.

There is a massive difference between persecution/human rights violation and how much bankers are paid.
They were silly promises, with a deficit the size of ours, you couldn't have protected everything Cameron promised. People were naive to believe him but that certainly doesn't excuse Cameron.