Boris hits back over FSA bonuses crackdown

Are these '.. 9,000 of the UK finance industry's top brass  ..' the same financial geniuses that almost brought the country to bankruptsy? Even if it wan't them directly, then why did they stand by and let it happen without doing anything about matters?

In any other sector there would have been 'no bailout' and the offending companies would have gone bust; taking along with them some (most) of Boris's '.. 9,000 .. top brass ..' Surely that is one of the purposes of a recession - like it or not it weeds out the weak business and at the end of the day the sound ones survive (survival of the fittest)

Unfortunately this concept is thrown into disarray when governments start interferring and influencing the natural order of things - but under the current system when customers money is at risk it is understandable.

Furthermore, we do not seem to be seeing any initiatives from the banks to secure customers money in the future if this happens again; they are more interested in protecting their own interests than those of the customer.

Let us not forget that the banks are currently being helped out at a fraction of percent interest (0.5%) and yet lending the same money at multiples of their borrowing rate. What is particularly clever or innovative with this approach of 'stuffing' the customer who has ultimately lent them the money in the first place via the tax system?

As for Goldman Sachs - they have fingers in so many pies and such a wide network of 'old boys' that they are more akin to the Mafia than a banking house. The sooner governments stop using these firms as consultants the better; they always seem to have an inside track and profit from either the up/downside and their considerable sucess rate cannot really be put down to coincidence - can it?

As was said many years ago on the stock exchange - '.. someone always knows and someone always deals ..'

What value have the City bankers provided for the estimated £40bn unbelievable bonus figure? In one year? To put it into context Cadbury's entire shareholding is worth less than £12bn.

These are the same banks that would have collapsed if governments had not injected billions leaving a hole in their economies to be paid by the general population for years to come. Having brought about a near collapse of the capitalist system the banks then make extraordinary profits from this same collapse. I believe that the actions of the finance sector have had a damaging affect on the 'real' economy for at least 30 years.

Philip Stephens writing in the FT on Monday commented on the necessity for taxing the banks but says 'forcing bankers to strengthen balance sheets with money they would rather put in their own pockets addresses only part of the problem.' He goes on to say

The next stage must be scrutiny of the structural distortions that allow these institutions to rack up such huge profits. Broadly speaking, the leading players in at least three areas of investment banking – wholesale markets, underwriting and mergers and acquisitions – have been operating natural oligopolies.

Their profits have been in significant part a reflection of the absence of robust competition. There are different reasons for this in the different areas of business – what economists call asymmetries in some and market dominance in others. But as long as they are not addressed, the banks will make profits – or more accurately, extract rents – out of all proportion to any contribution they make to the wider economy.

I hope that, unlike Boris Johnson, the government, whatever it's persuasion will not give in to the very powerful lobbying of these same banks.