Anyone else want to jump in an have a go at financial regulation? Maybe Freinds of Polar Bears or Save The Ducks foundation? Are there problems? Yes, but none that can be solved by destroying the UK as a worthwhile place to do business..."ah good year Robert, you can expect your compensation in 2024" http://www.ft.com/cms/s/0/d137c834-cf96-11e2-be7b-00144feab7de.html#axzz2Vi83CmSQ
Top bankers risk having their bonuses deferred for up to a decade under plans to be published next week by a powerful commission of UK MPs and peers. The proposal, in a draft report of the Parliamentary Commission on Banking Standards, envisages that UK bankers, who typically receive bonuses either immediately or after one, two or three years, would be barred from accessing the payouts for as long as 10 years. Members of the commission, including Lord Lawson, the former Conservative chancellor, and Justin Welby, the archbishop of Canterbury, have been drafting their final conclusions since March, after spending six months hearing evidence from hundreds of witnesses. The commissioners are due to meet on Monday and Tuesday, with a final report to be published as early as next Thursday, assuming Andrew Tyrie, the chairman, can rally consensus support for the draft report. The commission was set up in the wake of the Libor rate-rigging scandal and other misdemeanours, such as the mis-selling of payment protection insurance and interest rate swaps, in an effort to spur a change of attitude among Britainâs bankers. It has already published hard-hitting interim reports, including one on the failed bank HBOS, which prompted Sir James Crosby, its former chairman, to ask for his knighthood to be removed and for his pension to be cut. The final report is expected to be equally uncompromising, with key sections on pay, professional standards and a new proposed sanctions regime for miscreants. As the Financial Times reported early this week, the draft report also contains a strong suggestion that Royal Bank of Scotland should be split into a good and bad bank, although some members of the commission are likely to press for that proposal to be watered down into a recommendation for a thorough cost-benefit analysis of the idea. But people close to the commission said the proposals on pay could prove the most radical. In addition to the long-term bonus deferral plan, there will be several recommendations, including ideas to reform the size and structure of overall pay levels. It is unclear whether the recommendations in the report if enacted would apply only to UK banks or to any banker working in Britain. By increasing bonus deferral periods, reformers believe bankers would be motivated to think more carefully about the long-term impact of their behaviour. The proposal would also fit with the idea that it should be made easier for boards to claw back bonuses from bankers if business that initially looked successful backfires years later. Some banks, such as HSBC and Goldman Sachs, already have long-term bonus deferral schemes for senior bankers, but most delay bonus payouts for three or five years at most. The commissionâs ideas come on top of incoming EU restrictions on bonus levels, which will limit the size of senior bankersâ bonuses to one times salary or two times with the express approval of shareholders.
ALL of the rogue trader blowups in Europe began as an effort to boost their year-end bonus. I say F them.
Whats the exact number of rogue traders vs the exact number of traders to operate without issue? If you can justify a decade waiting period for all bank traders due to those few, they can without a doubt justify a reason why you should not be in the markets at all. Not that any of this matters as such, all it would amount to is many plane tickets.
The number is meaningless (traders who operate lawfully) as the UBS scandal was >$2.3B and was roughly equal to their bonus pool last year. How about Drew and Iksil at Chase at $7B. Drew walked away with >$50MM in comp and Iksil was paid about $15MM over the two years he was decimating Chase with the CDS trading. Kerviel cost SG a multiple of their bonus pool. There is no method by which to claw-back the bonus other than deferred comp. Stop talking out of your ass.
The amounts of each case are meaningless stop talking out of your ass, the only issue relevent to their cases is that of their employers not having the intelligence and infrastructure to monitor what they are doing which allowed them to do it in the first place.
hi Sheda, I agree with you but I think you are misunderstanding atticus' point. The legislation at the end of the day, regardless of where the actual pitfalls occured in each individual case, is to target general mass as a first line defense.
I totally agree with the idea of deferred compensation. 10 years sounds fine to me. About time people remembered that these companies should be run for the benefit of their owners, the shareholders and not their employees.