'My son, an investment banker, sent me (an engineer) a link to your recent 'Compensation Round Up' story. I ventured to explain the public anger to him in the following terms:

My employer has a good, proven product and we are selling into a profitable, expanding export market - just the sort of thing that UK plc needs. However, we are a fledgling company and we need a bit of help to get airborne, as anyone in the capital plant market does. The loan we need is not really very much, especially when compared with a top banker's bonus.

Once upon a time, banks used to lend this sort of money to businesses with good prospects, but unfortunately the top bankers got roaring drunk on the profits from their gambling, and set fire to their banks. So there's now no money to be had.

Well, there is, actually. The Chancellor of the Exchequer is asking everybody to empty their piggy banks (and their children's piggy banks and probably their grandchildren's as well) so that we can now fix the banks, because we all know how important the banks are.

So why are the top bankers still drinking ? In fact, why are the 'top bankers' still regarded as 'top bankers' at all ? Why have they even got jobs ? And why are they still throwing fistfuls of our money at each other, instead of investing it in real businesses ?

The Chancellor of the Exchequer says that if we don't let them continue to throw fistfuls of our money at each other, then they will all go away. In the immortal words of my boss: 'Why don't they p*** off, then!'.

It's not that the top bankers screwed up, we all do that.

It's not that the top bankers were p***ing on us while they were screwing it up, because we were doing OK out of it, too.

It's not even that we all have to bear the pain of getting the show back on the road: that's life.

It is, however, that the top bankers want to keep p***ing on us while we're getting the show back on the road - and that they start to cry when anyone asks them to stop'.

Reader Comment

'This man's son can't be much of an 'investment banker' if he cannot argue against this simplistic view.

I have been in these markets since the 1986 big bang, and it is absolutely correct that 'Bankers' get paid too much, especially for generating annuity income as has been the case in the debt markets this year - but turkeys don't vote for Christmas.

If the government wants to change the cycle, why doesn't it have RBS undercut the fees cartel that exists within investment banks, so that they start to provide value for their services rather than just fleecing their clients. With a bit of valid competition perhaps those top bankers would come to the fore and earn their big bonuses by generating new business, and not just regurgitating old business. Also clients might think more seriously about changing advisers if there was more competition and the fee structures were not all the same.

There is no simple solution to all this, but moaning about banking without offering an alternative model has got the politicians where we are now - in a right old mess'.

Compensation Round Up - Who's Getting What

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