ChatterBank1 min ago
Liz Truss Plans To Remove The Uk Banker Bonus Cap
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If I were an investment banker with a very good bonus pay out (depending on how my investments performed), I might identify a risky investment - if it comes off I’d make well in excess of £1 million as a bonus payment. If it fails, the bank might go bankrupt and I’d miss out on a multimillion pound bonus.
As an investment banker, would you make such a risky investment that might make you a multi-millionaire, but on the downside could bankrupt the bank?
If I were an investment banker with a very good bonus pay out (depending on how my investments performed), I might identify a risky investment - if it comes off I’d make well in excess of £1 million as a bonus payment. If it fails, the bank might go bankrupt and I’d miss out on a multimillion pound bonus.
As an investment banker, would you make such a risky investment that might make you a multi-millionaire, but on the downside could bankrupt the bank?
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Everything so far points to Parliamentary party suicide.
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Tory MPs are already listing the campaigns they will face from opponents come the autumn.
“The removal of the green levies on fuel and the opening up of fracking – the whole environmental movement will start campaigning against Conservatives, even though we’ve been quite green,” said one MP, adding: “The lines of political attack for Labour are incredibly clear. Bigger bonuses for bankers. The cut in national insurance will primarily help people on higher incomes.
“The freezing of energy bills primarily helps people on higher incomes because energy bills are bigger. None of this is targeted. Honestly, it’s creating a complete open goal for Labour politically.”
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Tory MPs are already listing the campaigns they will face from opponents come the autumn.
“The removal of the green levies on fuel and the opening up of fracking – the whole environmental movement will start campaigning against Conservatives, even though we’ve been quite green,” said one MP, adding: “The lines of political attack for Labour are incredibly clear. Bigger bonuses for bankers. The cut in national insurance will primarily help people on higher incomes.
“The freezing of energy bills primarily helps people on higher incomes because energy bills are bigger. None of this is targeted. Honestly, it’s creating a complete open goal for Labour politically.”
//What’s the point of employing me as an investment banker – if the investment decisions are made by the bank?//
You got the wrong end of the stick for no apparent reason as I didn't say that. We're talking about pay policy's and bonus scheme's and its the bank management, directors , shareholders, risk&compliance teams and renumeration committee's to decide on what a good policy is that rewards good results and attracts the best staff but don't reward over risky investment that put the bank at risk... its not something for politicians to interfere with.
The EU brought in the bonus cap in an effort to prevent a repeat of the 2008 banking crisis – it’s surprising that an organisation as large as the EU does not have the banking expertise of TTT to know that the bonuses paid (and the investment risks that came about as a direct result) had nothing to do with the banking crisis.
But then TTT thinks the UK 2008 banking crisis was the result of the US sub-prime mortgage situation – so perhaps they better not take any notice of TTT.
But then TTT thinks the UK 2008 banking crisis was the result of the US sub-prime mortgage situation – so perhaps they better not take any notice of TTT.
read item number 1
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eg; "A large share of such risky borrowing was done by investors seeking to make short-term profits by ‘flipping’ houses and by ‘subprime’ borrowers (who have higher default risks, mainly because their income and wealth are relatively low and/or they have missed loan repayments in the past). "
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eg; "A large share of such risky borrowing was done by investors seeking to make short-term profits by ‘flipping’ houses and by ‘subprime’ borrowers (who have higher default risks, mainly because their income and wealth are relatively low and/or they have missed loan repayments in the past). "
// TTT thinks the UK 2008 banking crisis was the result of the US sub-prime mortgage situation //
Not sure TTT thinks that. But it is largely true. But that had nowt to do with extravagant bonuses, that was about sales commissions. They sold loans to people who could not afford to pay them back and pocketed a sales commission. Contagion arose when the US banks sold those ‘investment opportunities’ around the world, and they were dud.
Not sure TTT thinks that. But it is largely true. But that had nowt to do with extravagant bonuses, that was about sales commissions. They sold loans to people who could not afford to pay them back and pocketed a sales commission. Contagion arose when the US banks sold those ‘investment opportunities’ around the world, and they were dud.
There aren't any real banks anymore, everything is run by robots. A couple of weeks ago on a UK visit I took out on arrival £50 cash from an ATM machine at a service station on the M4 using a my debit card (which had not been used for some time), when I tried to use it 3 hours later to pre-pay my hotel bill of £995 (didn't we used to pay our bills when we were leaving?) the bank's computer decided some funny business was taking place & blocked my card & my wife's too for good measure, - though I managed to pay using a different card.
The following morning we spent hours in banks getting our cards re-instated; banks being no longer recognisable as such, simply a row of robots and in the corner of the room a poor beleaguered woman having to deal with a long queue of customers all like us with 'problems' - largely brought about I believe, by the robots!
So I say, no bonuses for anyone until they get their banks working.
The following morning we spent hours in banks getting our cards re-instated; banks being no longer recognisable as such, simply a row of robots and in the corner of the room a poor beleaguered woman having to deal with a long queue of customers all like us with 'problems' - largely brought about I believe, by the robots!
So I say, no bonuses for anyone until they get their banks working.
If you want to know why according to the FCA the HBOS fiasco cost the UK tax-payer of the order of £17 Billion read the document in the attached link.
For an alternative view read TTT’s posts.
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For an alternative view read TTT’s posts.
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hymie, here is a film about the lead up to the financial crash, it may help you understand the issue:
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Storyline excerpt:
"Three separate but parallel stories of the U.S mortgage housing crisis of 2005 are told. Michael Burry, an eccentric ex-physician turned one-eyed Scion Capital hedge fund manager, has traded traditional office attire for shorts, bare feet and a Supercuts haircut. He believes that the US housing market is built on a bubble that will burst within the next few years"
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Storyline excerpt:
"Three separate but parallel stories of the U.S mortgage housing crisis of 2005 are told. Michael Burry, an eccentric ex-physician turned one-eyed Scion Capital hedge fund manager, has traded traditional office attire for shorts, bare feet and a Supercuts haircut. He believes that the US housing market is built on a bubble that will burst within the next few years"
13:15, just a knock on effect of the US sub prime crisis. This was caused by brokers getting mortgages for people that could not afford them. These were then bundled into CLOs and sold as AAA securities after being mis graded by the the ratings firms. These securities were then traded in the actual market and, much more dangerously, the derivatives market.
Believe what you want Hymie, you are wrong.
Believe what you want Hymie, you are wrong.
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