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.
- 1 'Alien thigh bone' on Mars: Excitement from alien hunters at 'evidence' of extraterrestrial life
- 2 West poised to join forces with President Assad in face of Islamic State
- 3 Mother fed her daughter tapeworms to make her skinny for pageant
- 4 Pamela Anderson rejects ice bucket challenge because of ALS experiments on animals: 'Mice had holes drilled into their skulls'
- 5 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
'Alien thigh bone' on Mars: Excitement from alien hunters at 'evidence' of extraterrestrial life
West poised to join forces with President Assad in face of Islamic State
Pamela Anderson rejects ice bucket challenge because of ALS experiments on animals: 'Mice had holes drilled into their skulls'
James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – as hunt begins for killer
ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Isis threat: Cameron wants an alliance with Iran
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
Disgusting, frustrating, but intriguing: how the country really feels about its politicians
Bin bag full of cats' heads discovered near Manchester's Curry Mile
iJobs Money & Business
£30000 - £45000 per annum: Harrington Starr: A global investment management fi...
£65000 - £75000 per annum: Harrington Starr: Senior Network Engineer-(CCIE, CC...
£70000 - £80000 per annum: Harrington Starr: Senior Network Analyst - (CCIE, C...
£60000 - £80000 per annum: Harrington Starr: Senior Network Engineer-(Design, ...