David Prosser: Bankers are not leaving the City
Friday 30 July 2010
Outlook The reaction of the British Bankers' Association to proposed new rules from the Financial Services Authority on bonuses has been drearily predictable: yet another warning that the City's finest will flee the country if we police their pay more stringently than other jurisdictions.
Although we have been hearing this lament from the banking sector ever since the credit crisis began prompting greater regulation and new taxes, there has been no flight from London as yet.
In fact, remuneration experts say that what the FSA is proposing – the headlines are that 40 per cent of bonuses will have to be deferred for three years and that 50 per cent of the payment will have to be in the form of shares – is broadly in line with what potential competitor markets for financial services staff are planning. And like elsewhere, our rules will only apply to individuals whose activities might pose a risk to their firms.
However, even if the FSA was proposing to go further than others, it's worth remembering what the point of these rules is. This is not an attempt to limit bankers' pay – firms will continue to be free to pay bonuses of any size they want – motivated somehow by envy or revenge. Rather it an exercise in ensuring that traders and managers are not incentivised to take the sort of short-term risks that blew up so many institutions during the crisis.
Now, it may be that there are people in the City who resent having their trade fettered in this way. If so, we should not be sorry to see them to depart to rival employers in other jurisdictions. Let them run the risk of bringing down other people's banks rather than our own.
Liam Neeson's Downton dreams
Thriller is set in the secret world of British espionage
Bomber jacket worn by Mary Berry sells out within an hour
- 1 Scottish independence: Learn from Quebec's mistakes and beware of promises. Vote Yes.
- 2 iOS 8 is full of shiny new features - but it's terrible news for app developers
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 4 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
- 5 Cocaine and cannabis haul hidden in Vatican car seized by French police
Scottish independence referendum live - The reunited kingdom: Scotland gives a clear 'No' to independence in historic referendum
Archbishop of Canterbury admits doubts about existence of God
Scottish independence: YouGov final prediction puts No campaign 8 points ahead - but Yes team remains optimistic
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...
Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...