No more bank bonuses in the UK
soulsinging
Posts: 13,202
http://www.boston.com/business/articles ... r_bankers/
Interesting approach here, the UK is planning to outlaw annual bank bonuses in order to push banks to award bonuses only every few years based on long term success. I'm not sure what I think. It seems a pretty rigid and inflexible way to solve the problem, but it might be effective and something has to be done. This quote sums up the issues I have had with western capitalism for a very long time:
"new laws would include a claw-back provision and help to "end the reckless culture that puts short term profits over long term success."
This is what I see as our biggest problem... everything is so short term, instant gratification in the west. A company is only successful if it earns bigger profits every year. You have to pump up stock dividends NOW no matter what the long term cost. There is so much pressure for instant gains that nobody can or wants to look at long term figures... thus you have risky lending and other financial gambles in the hopes they'll create short term returns that will get a good bonus. Because even if it collapses, you only need one good year as a CEO to retire, and the firing packages they get when their schemes blow up don't really make them sweat the long term health of the companies.
And it isn't just banks and corporations. Unions negotiate astronomical raises and benefits without concern for whether or not their company can afford to compete... they price themselves out of jobs. Consumers opt for easy loans and credit card debt without regard to future earnings prospects or their ability to pay it off. It's all about getting what you can now and the hell with the future.
Interesting approach here, the UK is planning to outlaw annual bank bonuses in order to push banks to award bonuses only every few years based on long term success. I'm not sure what I think. It seems a pretty rigid and inflexible way to solve the problem, but it might be effective and something has to be done. This quote sums up the issues I have had with western capitalism for a very long time:
"new laws would include a claw-back provision and help to "end the reckless culture that puts short term profits over long term success."
This is what I see as our biggest problem... everything is so short term, instant gratification in the west. A company is only successful if it earns bigger profits every year. You have to pump up stock dividends NOW no matter what the long term cost. There is so much pressure for instant gains that nobody can or wants to look at long term figures... thus you have risky lending and other financial gambles in the hopes they'll create short term returns that will get a good bonus. Because even if it collapses, you only need one good year as a CEO to retire, and the firing packages they get when their schemes blow up don't really make them sweat the long term health of the companies.
And it isn't just banks and corporations. Unions negotiate astronomical raises and benefits without concern for whether or not their company can afford to compete... they price themselves out of jobs. Consumers opt for easy loans and credit card debt without regard to future earnings prospects or their ability to pay it off. It's all about getting what you can now and the hell with the future.
Post edited by Unknown User on
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its no more automatic bank bonuses in the UK... instead of every 12 months without fail it'll now be bonuses over a more stretched out period.
I thought my comments and the article would make that clear. But given the average brainpower of a Moving Train poster... you may have a point. I guess I was too busy thinking about what I was going to write to make sure the subject was perfectly worded. Besides, more controversial subjects get more reads