Here we go again. We have stepped aboard the old bankers' bonus bashing merry-go-round, where angst and hatred are spewed out with tiresomely monotonous regularity. Really. Hasn't everyone got bored of this yet? It's worth remembering that the banks will be paying out proportionately less than in previous years. However, as their recovery has been dramatic the net figure payable is up by perhaps as much as 30 per cent.
Before everyone reaches for their shotguns, just remember that this time most bonuses will come as share-option scheme payments (60 per cent) that are payable over three years and subject to clawback.
The politicians will no doubt be incandescent with rage, conveniently using the banks as easy prey to cover up their own inadequacies. Messrs Brown, Darling & Co are equally as culpable for the recession as is a small coterie of irresponsible bankers . The UK Government was completely consumed by the former Fed chairman Alan Greenspan's relentless quest to get banks to lend money indiscriminately, with inadequate regulatory controls, to all comers – which included absolutely absurd mortgage lending.
Today, Stephen Hester of RBS will be grilled by the Treasury Select Committee. In RBS's defence, its decks have been cleared. RBS needs to recover quickly. It would be folly to deny it the tools of the trade, one of which is the incentive to employ the very best. The Government should be grateful that it may glean as much as £5bn for its coffers from this windfall "super-tax".
The country needs to get over its revulsion and outrage and concentrate its efforts in getting the financial show back on the road. Strong banks are an essential ingredient, so don't throw the baby out with the bath water. New regulation will take care of risk/reward ratios.
The Government does not seem to believe that capital and banking personnel are very mobile. It would be best if it started to believe it soon. Suitable alternative arrangements for some banks in other countries are under consideration.
David Buik is a partner at the money broker BGC PartnersReuse content