Bank bail-outs and bonuses: Do the two mix? | AccountingWEB

Bank bail-outs and bonuses: Do the two mix?

This week the government doubled its investment in bailing out the already part nationalised RBS and Lloyds Banking Group, injecting a further £37bn into the ailing banks. With the taxpayer footing the bill for one of the world’s biggest government rescues, the issue of bonuses has reared its ugly head once more.


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Bank bonuses

1582631 | | Permalink

Every article that mentions bank bonuses anywhere in the western world makes reference to retention of talent as the main purpose of keeping bonuses.  Just where exactly is this 'talent' going to go? Are we not hearing of thousands of banks, stock-brokers and finance graduates on the dole? I think it's worth the risk! Let them go!

I agree!

Anonymous | | Permalink

I agree - where is all this "talent" going to go if they don't get their bonuses? The traders could probably sell cars or work at estate agents but the rest of them do not have any skills that could work in other industries. This is blatantly the old boys club protecting themselves from being exposed as just ordinary people who only deserve ordinary compensation. The banking system will not collapse if we stop paying excessive bonuses, we can manage to run a much more important industry, the NHS, without paying extortionate sums of cash. It's time we removed the shroud of secrecy that hangs around the banking industry.

dennismiller's picture

But where has all the profit come from!

dennismiller | | Permalink

Paying bonuses is all very well, or not, as the case may be, but I am not clear on what 'profits' these bonuses are being paid. If these profits are so enormous that substantial bonuses can be paid, why have these profits not been ploughed back into the business as a 'bale out'

And where has all this 'profit' come from? Have the banks been selling things, have they been trading in things (or imaginary things) or have they been printing it? In my feeble-minded way I always assumed that if someone has made a profit, then someone has made a loss, or at least paid out for something i.e. an exchange of money has taken place. So, who has made the loss or paid the money?

I suspect, like in so many things, it is us lowly taxpayer who has footed the bill!!

Christian's picture

bank bail out

Christian | | Permalink

Year 20029 can be considered the worst year among businesses for there were many bank failure reported consequently the government did not  fail to extend bailout to the trouble financial institution and it awakened the mind of the tycoons to adapt a conservative investment. However, to keep from losing a lot of money, you need to know the basics of investing before trying to invest online.Traditionally, buying stocks through a broker meant pinching and saving your pennies for many years before being able to invest in the stock market. If you didn't have enough money to start already if you wanted to start quick, you needed to borrow money or buy stocks on credit. This is also called "buying on the margin.” With the ease and convenience of the World Wide Web, however, the playing field has been leveled, allowing most anyone to enter the stock market with less money than before.