The time for “remorse and apology” by banks is over. So said Bob Diamond, Chief Executive of Barclays Bank, whilst speaking to a House of Commons Select Committee last week. And he is right. Mostly.
The issue that (re)lit the touchpaper of public anger towards the banking industry in recent days was the news that the government will not seek to cap the bonuses being paid at a number of the now state-owned banks. This is a betrayal, we are told. We taxpayers should be getting better value for money. Perhaps true; but government stepping into private industry and wilfully maiming it is not the way to go.
As effective shareholders of these banks, we will get the best value for money by share prices going up. This is to be achieved by the banks returning to profit; and that will be done through them being staffed by the most talented people. Those who earn the most and are awarded the larger bonuses are those with the most unique skills. We want them running our banks, not being driven away.
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