Comments on: Gosh, what a surprise

By: Matthew

Matthew — Fri, 06 Nov 2009 08:45:15 +0000

Sorry just to be clear by salaries I mean salary and bonus.

By: Matthew

Matthew — Fri, 06 Nov 2009 08:44:34 +0000

The paper Tim links to above is quite interesting. If you don’t buy the excessive risk angle, which in theory seems a good one, it’s surely evident that IB paid out too much in salaries and didn’t keep enough cash in the company?

http://www.peri.umass.edu/236/hash/468a9ba021/publication/386/

By: The Great Simpleton

The Great Simpleton — Thu, 05 Nov 2009 22:31:57 +0000

I know its been asked before, but I haven’t seen an answer – is there any serious research that shows that bankers’ bonuses made any significant contribution to the crises?

By: vimothy

vimothy — Thu, 05 Nov 2009 15:05:34 +0000

I guess that two questions follow directly:

Is there a competitive market for “banking talent”?

If the “banking talent” ups and leaves RBS, will the taxpayer actually be worse off? (I note the size of the bail-out that RBS needed to rectify the mistakes of these rocket scientists with a wry smile…)

By: Matthew

Matthew — Thu, 05 Nov 2009 13:07:09 +0000

Abn Amro, mmm.

I don’t see this proves anything. If a firm is offering more money then people are likely to think about moving to it. But this has nothing to do with the desirability offering them more money.

By: Luis Enrique

Luis Enrique — Thu, 05 Nov 2009 11:54:21 +0000

still – does anybody know if there are jobs within retail banking where bankers can say “pay me lots of money or I will leave and take business with me?” –

presumably they need skilled people to handle wholesale financing, liquidity, monitor risk exposure etc. but if these people leave, the worst that happens is you might only be able to hire less skilled people, they don’t take chunks of revenue with them when the go, do they?

By: Recusant

Recusant — Thu, 05 Nov 2009 11:50:36 +0000

As a headhunter – un-inundated with CV’s – I feel it should be pointed out that their new bonus arrangements are still less onerous than those that existed at Lehman’s, HSBC Inv.Bkg and many others BEFORE the crunch.

By: Luis Enrique

Luis Enrique — Thu, 05 Nov 2009 11:43:29 +0000

oh right, yes of course ABM Amro, for one – well imposing salary caps in investment banking, where bankers can walk out the door and take millions in revenue with them, is fucking lunacy, and if that’s what’s happening then we the tax payer and cutting off our noses to spite our faces, big time.

By: Luis Enrique

Luis Enrique — Thu, 05 Nov 2009 11:39:17 +0000

oh - there's a nice post about bankers' pay at the NYT Economix blog today.

By: Luis Enrique

Luis Enrique — Thu, 05 Nov 2009 11:35:36 +0000

I would like to know exactly what these RBS bankers do. I mean, what’s their job description?

I know a bit about investment banking (traders, salespeople, analysts, corporate financiers) but I don’t know what roles big bonus earners do in retail banks.

If RBS was an investment bank, I’d say RBS, and hence the tax payer, is likely to lose out, because there are plenty of investment banks out there ready to hire people who will bring clients and revenue with them. But when it comes to a retail bank, I don’t know what these guys can take out the door with them when they leave.

forgive the self-promotion, but my article about “nationalising Manchester United then imposing a salary cap” is surely the key reference here!

Tim adds: RBS owns an investment bank or two….

By: Andreas Paterson

Andreas Paterson — Thu, 05 Nov 2009 11:21:50 +0000

My more cynical view would be that this is a story planted by a PR agency woking in the interests of a group of RBS bankers.

We’ll soon see, either way.

By: Kay Tie

Kay Tie — Thu, 05 Nov 2009 10:14:22 +0000

An action against the Government for suppression of a minority shareholder could well succeed.