Mr. King has himself admitted his frustrations
In a recent attack of conscience – spurred on by a pitiful bonus payment – a friend of mine left his job at one of the world’s largest investment banks and set his sights on joining the world of financial regulation.
After a spate of redundancies left him as the last remaining member of his team his image of the hard-working high-living lifestyle of a banker had been almost entirely dispelled. He felt in need of a new challenge and where better than at crisis management HQ – the Bank of England.
Having seen the effects of the near-collapse of an institution from the inside he believed that he was in a prime position to join Mervyn King in the great reformation of the banking system. Earlier this month Mr. King outlined his frustrations with the current model in unambiguous terms:
“Executives at the top are earning vast sums, beyond the dreams of ordinary people, for doing a job which it’s very hard to say justifies that kind of bonus,” said our modern day John Cartwright. “It is a form of compensation which rewards gamblers if they win – but with no loss if they lose.”Of course one could say that conveniently left out is the government’s own £500 billion bailout scheme which, it could be argued, implicitly underwrote the risks taken by major financial institutions and cemented the “too big to fail argument”. But who am I to take issue with a man so intent on sorting out this broken system?
Imagine my friend’s surprise, therefore, when upon receiving a job offer from the Bank he was told that he would be subject to an annual review to establish a suitable performance-related bonus.
Well I suppose if the system ain’t broke don’t fix…oh right. Um, perhaps it’s about recruiting the best talent, I mean how could the Bank hope to recruit the finest financial minds without offering some form of financial cherry to tempt them with.
Hold on, but wasn’t it Mr. King himself who said only this month that banks should be “tough”and not get sucked into the culture of paying excessive bonuses simply because other institutions were doing so?
These are confusing times indeed.
David Cameron, meanwhile, is insistent that we should be handing more power over to the…
You have now reached your limit of 3 free articles in the last 30 days.
But don’t worry! You can get another 7 articles absolutely free, simply by entering your email address in the box below.
When you register we’ll also send you a free e-book—Writing with punch—which includes some of the finest writing from our archive of 22 years. And we’ll also send you a weekly newsletter with the best new ideas in politics and philosophy of culture, which you can of course unsubscribe from at any time
Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information.
Click to learn more about these interests and how we use your data. You will be able to object to this processing on the next page and in all our communications.
