Oh my

Now I know that bankers aren\’t the most loved of creatures at present but:

Barclays Capital has been forced to break contractual agreements with some of its star bankers after bowing to regulatory demands on bonus payments.

The investment banking arm of Britain\’s third biggest bank on Friday set aside a record bonus pool thought to be as much as £4.5bn. It told key bankers that all pay packages had to meet Financial Services Authority (FSA) rules , including the deferral of 60pc of pay, effectively declaring pre-existing contracts null and void.

Who really thinks that the breaching of the sanctity of contract by bureaucratic fiat is a good idea?

4 thoughts on “Oh my”

  1. It’s an excellent precedent. When the Tories institute an Office of Budget Management and break all the contracts between the Government and Labour voting quangocrats there’ll be no complaints from Labour, will there?

  2. Brian, follower of Deornoth

    “Who really thinks that the breaching of the sanctity of contract by bureaucratic fiat is a good idea?”

    Anyone who owes someone else money. Which is why we are likely to see a lot more of it in the near future.

  3. A ‘guaranteed’ bonus scheme requires it to be cast iron and no bank would be that daft, would they? For all we know the contracts aren’t that guaranteed, or have clauses in them concerning exceptional circumstances or edicts from regulators. Time will tell.

    We only have the hype that contracts are being broken to go on. We simply do not know. It is bad PR for The City so long as the impression that contracts are being broken goes unchallenged if it is not actually the case.

    Good PR for Labour though: Tough on wealth creation, tough on the causes of wealth creation.

  4. A contract is only good while both sides exist. If banks exist only because the government has saved them, their contracts are the government’s to approve or nullify.

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