Bankers bonuses

The Government has said that guaranteed bonuses contribute to irresponsible deals by bankers,

I wish that someone could explain this to me.

I can get the idea (although am not wholly convinced of it) that striving for a bonus can make, on the basis of bonus if you win the shareholders eat the losses if you lose, bankers take excessive trading risks.

But I cannot see how a guarnateed bonus (ie, a high salary paid on day 365 of employment), the opposite of something that one must take excessive risk to earn, can cause such.

Can anyone explain why the Government is pushing this line then?

6 thoughts on “Bankers bonuses”

  1. Although I don’t work in banking or finance I once had a guarenteed bonus. Then it was called a retention bonus and my employer wanted to give me an incentive to hang around through a critical period when I could have gone somewhere else and possibly earned more or had a better lifestyle.

    In the banking world a guaranteed bonus may make them blasé, probably worse than taking high risks; at least with high risks you may a high return.

  2. Here’s something only a good reader will tell you. You often use the wrong words in the text as your hyperlink. In this post, I clicked on “I wish” and thought I was going to an article in which you expressed your wishes on banker bonuses.

  3. What I’ve been up to, week ending 2009-09-20: Read innocuous and obviously correct comment, called commenter a wanker. Still high, masturbated.

  4. One reason given that bankers take huge bonuses is: that they take huge risks! They don’t, they are all underwritten by us -the taxpayer.

    Another reason often touted to explain their huge salaries: they would go else where if they weren’t! Um! Good.

    It reminds me of a surgeon, operates appallingly, cuts off the wrong leg! Now would you really want that same surgeon to operate on you again?

    Do me a favour? Vote for this painting of bankers:

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