James Daley: Why such hysteria over bankers' pay?

The row over executive pay and pensions has started to become increasingly hysterical over the past few weeks, as the media and politicians have begun baying for blood in the wake of the banking crisis.

There's no doubt in my mind that there is an urgent need to change the regulations in this area. The banks' remuneration structures encouraged traders and managers to take on too much risk – handing out millions to some of those who were at the heart of the problems that caused the banking collapse.

But redrawing the regulations does not have to come hand in hand with a witch hunt for the executives who profited. It's too late to rectify these mistakes, and it's simplistic to try to pin the blame for the crisis on a handful of high-profile individuals.

The causes of the banking crisis are manifold, and while chief executives such as Sir Fred Goodwin (the former boss of Royal Bank of Scotland, below) have to bear some of the blame – it's important to remember that these executives were not wilfully trying to bring the global banking system to its knees.

These are not fraudsters or criminals. They're highly paid professionals who got it badly wrong, and have already lost millions of pounds.

Bankers are undoubtedly paid too much. They don't save lives or help shape our society – they're simply engaged in the business of making money out of money. Not a particularly worthy game.

But we can't simply turn round and blame a handful of the highest-profile individuals for this crisis – stripping them of their accrued pay and pensions – just because we're angry. We need to turn our attention to ensuring that this doesn't happen again.

Many of the people who were integral to designing the products and practices that led to the banking collapse, are already retired with millions of dollars in the bank. The likes of Sir Fred or Andy Hornby, the former HBOS chief executive, were simply the ones holding the parcel when the music stopped.

Fred Goodwin's pension of £650,000 a year may sound ridiculous – but it's no more than many banking executives are already receiving, and no more than some others will receive in the future. Shareholders in his company signed off the contributions to his pension year in, year out – and the regulators signed off his company's procedures and practices.

Let's be clear, just because these banks are now owned by the Government, it doesn't mean it is the taxpayer that will be picking up the bill for Sir Fred or Andy Hornby's pensions. These final-salary schemes were – unlike most government pension schemes – fully funded, which means that the money is ready and waiting.

I sincerely hope that we can find a way of making bankers' pay more proportionate. Nevertheless, we as a society have tacitly endorsed high executive pay for years – let's not now turn into an undignified, resentful angry mob, indiscriminately picking off the bankers who were in charge when the house of cards came crashing down.

Britain's banks got yet another kicking this week when the Court of Appeal rejected their attempts to justify their punitive overdraft charges. The case will now go to the House of Lords – but let's hope a final resolution can be reached sooner rather than later. There are still hundreds of people with outstanding claims for unfair bank charges – and none of these will be paid until the court case is finally closed.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
news
Sport
Chelsea midfielder Cesc Fabregas
footballChelsea vs West Ham live kicks off coverage of all 10 of Boxing Day matches
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
PROMOTED VIDEO
News
i100
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
News
news
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Selby Jennings: Oil Operations

    Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

    The Jenrick Group: Night Shift Operations Manager

    £43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

    SThree: Trainee Recruitment Consultant - LONDON

    £20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    Day In a Page

    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all