Bonus Madness for the bankers

Imagine the scene. A Bank Board of directors, conscious of furious public, angry shareholders and under the gaze of Financial Services Authority and the Government, meet.

The subject is to hire a new star trader currently in New York. “Let’s pay a £5 million bonus because I like his face”. Nonsense says the next “Let’s pay her £6 million bonus because she has a good figure”.

Does Alistair Darling really think that a board of directors pays out bonuses because of a nice face or a good figure? A bank board pays out bonuses for one reason, which is to hire the best possible talent, which will make ten or twenty times that amount for the bank.

And if and when the star trader ceases to be a star trader, he is out of the door with a shattered reputation, a bad reference and poor prospects.

If the UK banks cannot pay the going rate for these star traders, they will merely work in New York, Zurich or Tokyo.

And so the Chancellor’s announcement that he proposes to stop these bonuses is utter socialist madness. He is also reducing his tax revenue, and creating a culture of failure.

What do you think?