Sunday, 6 September 2009
Banker's pay distraction at the G20
Really, what a total diversion this G20 communique on bankers pay really is. Not only has no agreement been reached, but what has been suggested is already being implemented by the banks in any case.
Take RBS, there staff are having bonus' paid over up to 3 years, mainly in shares and with up to 75% clawback.
All this fuss is to cover up some much less happy international co-operation. Basel II is dead and we are moving back to a world where banks will be able to hold as much capital as their national regulator says they have to. In a globalised world this is a dangerous move, which could see big banks move to countries where they are required to hold less capital. A situation not unlike that which we have with tax havens.
But why all the focus on bankers pay anyway? Like Hedge funds, this is a distraction from the true causes of the credit crisis. These were lax monetary policy and in the UK the situation was made worse by the terrible fiscal policy of the Labour Government.
Not much mention or agreement on this at the G20, quelle surprise!