Bonus fever: So long as City payouts keep rising, it is clear that the banks have learned little from the financial crisis

The atmosphere in the Square Mile ahead of bonus day is almost one of defiance


Answering a question with a question is never satisfactory. But in the case of the City, it seems entirely appropriate. The question is: have banks changed their attitude since the crash of 2008? To which the answer must be: do leopards change their spots?

The simple truth is there has been no significant altering of financial institutions’ approaches towards pay. The all-pervading sense of entitlement is as strong as it ever was. Public sector workers may be forced to endure wage freezes; much of Britain might be living in straitened times; but in the City, the gravy train keeps rolling along.

True, the wheels may be slowing – shortly, the EU has decreed, bonuses will be capped at 50 per cent of salary, or 100 per cent with shareholder approval. But anyone supposing that the banks, mindful of an EU diktat and the prevailing public mood, would curb their mega-payouts can think again. Far from resembling a hair-shirt philosophy, the atmosphere in the Square Mile ahead of this year’s bonus days is almost one of defiance.

If this really was the end for the seven-figure payment to someone, who, after all, has merely been doing their job, then we could let it pass. Soon enough, the giant bonus would be consigned to a history littered with wild risk-taking, cynical wheezes and financial disaster. But so entrenched is bankers’ belief that they really are special, that they really do deserve an earnings structure wholly out of kilter with the rest of society, the chances of calling time on the bonanza are looking slim, particularly if this year is any guide. As we report today, the top performers can expect bonuses as much as 15 per cent higher this year than last.

Nor will this be the last hurrah in the face of encroaching officialdom. Right now, there will be folk in the City drawing up clever ways of ensuring the bumper pay day remains. Perhaps base salaries will soar so the EU’s bonus restriction will apply to a much larger number. Perhaps some other tactic will be found.

And yet, whatever the banks may claim, there is no justification for these awards. The recipients did not do anything exceptional; they only did what was expected of them by their employer and by their clients. Worse, bonuses are often rewards for high-risk behaviour that, en masse, can threaten the stability of the economy.

The argument that this year that those pocketing the eye-watering amounts are fewer, and that many bank workers have received a “doughnut” of a bonus – that is to say, nothing extra at all – does not wash. The fact is the banks are still paying staff members the sort of sums that most working people can only dream of. What is more, bankers expect to be paid those sums.

It is that sense of entitlement that must change. Bankers see themselves as bigger, smarter, more important than their clients and pay themselves accordingly. Despite the catastrophe of a global financial crisis caused, in no small part, by their recklessness, they still believe themselves Masters of the Universe. If there is to be progress, balance must be restored; that means bankers become servants again, and reduce their earnings accordingly.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Recruitment Genius: Clinical Lead / RGN

£40000 - £42000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: IT Sales Consultant

£35000 - £40000 per annum: Recruitment Genius: This IT support company has a n...

Recruitment Genius: Works Engineer

Negotiable: Recruitment Genius: A works engineer is required in a progressive ...

Recruitment Genius: Trainee Hire Manager - Tool Hire

£21000 - £25000 per annum: Recruitment Genius: Our client is seeking someone w...

Day In a Page

Read Next

I don't blame parents who move to get their child into a good school

Chris Blackhurst
William Hague, addresses delegates at the Conservative party conference for the last time in his political career in Birmingham  

It’s only natural for politicians like William Hague to end up as journalists

Simon Kelner
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent