The Banks Should Pay Back Their Bailouts

Why have the banks not been forced to pay bay back their bail-outs before paying themselves bonuses, as if the financial crisis had never happened?

In December 2009 the official cost of the bank bailout was declared to be £850 billion.

http://www.independent.co.uk/news/uk/politics/163850bn-official-cost-of-the-bank-bailout-1833830.html

Meanwhile bankers’ bonuses have been predicted to run to billions in 2011

http://www.bbc.co.uk/news/business-12131092

Royal Bank of Scotland predict £1bn in bonuses this year, and they paid out £1.3bn in bonuses last year, while Barclays paid £5bn-£6bn in total remuneration.
Even where bonuses have been cut, financial sector salaries have risen by up to 40%.

Why are we letting them get away with this? Why isn’t there a public outcry?

Author: julie_t

short story writer

23 thoughts on “The Banks Should Pay Back Their Bailouts”

  1. As a proud shareholder in British Banks plc, I am pleased to see that my banks are making respectable, nay more-than-useful profits, owing to the efforts of our management, who clearly deserve to be rewarded with bonuses. 🙂

  2. I think all members of the Labour Party should be made to pay for the debt incurred by Gormless Gordon and Co., but, unfortunately, it just is not going to happen!

  3. No, Janus, they most certainly do NOT deserve their bonuses.

    The banks have performed very badly indeed. They have failed us spectactularly.

    They are now hugley indebted to us and their first priority should be to pay us back.

    They are once again paying themselves obscenely large bonuses because they are greedy and immoral and no-one is stopping them.

  4. julietee :
    They are once again paying themselves obscenely large bonuses because they are greedy and immoral and no-one is stopping them.

    It must be time for a riot.

  5. There there little girlie,

    This is important stuff and far too complicated for your tiny socialist brain to comprehend.

    Now go and put another batch in the front loader and try not to worry your pretty little head about it. If you’re not too busy, a fried egg butty would be nice.

  6. I think that you are asking the wrong question julietee. Shouldn’t the question be;

    What return is the government going to get on the sale of its shares in these banks?

    If it doesn’t recover what New Labour called its ‘investment’in these banks, plus a good interest rate, then you may have a point. It may be that the bankers bluff should be called regarding their threat to go elsewhere, especially if you think that these banks should now remain in public hands.

  7. The picture is somewhat larger than this little one snapshot you’ve raised JT. The banks are businesses and have no collective or moral conscience – they take what is offered, and we did the offering. The capitalist world needs the banks, whether you like it or not, and therefore the government coughs up. Whining about it won’t change a thing, that’s just the way of the world. It can’t and won’t change.

    Accept it, move on and worry about something you can do something about. It’s a very tired argument.

  8. Julietee it is obvious to me that you are this sites Hemmett, a complete wind up who thinks it is funny to start blogs that you know people will disagree with. Now please sit back carefully and read.

    The banks used to be regulated by the Bank of England who kept a very close eye on exposure to foreign markets and over lending, this had been going on for over 300 years and very successfully.

    Then along cam the nasty one eyed Scots git and decided he didn’t like the banks as they were still making loads of money for the UK and being a greedy Scotsman he wanted to have more than his share of it. So he took away the BoE’s powers and brought in a great overlord called the FSA and rather than make a mistake of staffing it with bankers who understood the industry and knew where the pitfalls might be he staffed it with accountants, lawyers and civil servants who knew nothing about banking but lots about regulations, form filling and tick boxes (are you still with me?). But these guys went to work at is and paper flew about all over the place with no one knowing what it meant.

    Now at the same time over the other side of the great pond a young senator decided the banks where being very naughty by not lending money to people who had no security or assets, we call them trailer trash, he felt that it was only right that these people who could never ever pay back should be given money. (the senator was called Obama). These loans were made and packaged up into toxic packages that were sold on the open market offering good interest rates.

    Hence UK banks purchased the debt to pay their customers (the likes of you and me) better interest and of course we did not complain. Now if the BoE were involved they would have stopped the toxic loans as most normal bankers could see what was about to occur. (I predicted this back in 2001 re the loans and as far back as 1994 with derivatives) but the FSA could see no problem.

    At the same time the banks were told to lend more than 100% of the value of property to UK home owners by our favourite Scotsman. A very dangerous move, but welcome by the people who could not afford it, and at the same time it fuelled a property value boom that made people happy and kept Blair and co in power.

    Well all good things come to an end and the bubble burst and now we are in deep do do.

    Just remember though the banks are our biggest earner in this country, they pay the most tax and the people who earn the big bucks work 24/7 they are on constant call and have an average working life of 10 years before their minds and bodies are blown

    Now by earning all this filthy lucre they pay loads of tax that pays for the idle scum to collect benefit, the people that earn th big bucks also pay loads of tax to help pay the benefit bill. The money these rich bankers have is then spent in our shops buying goods and services which employs other people taking them off of benefit and allows them to pay tax to pay the idle scums benefit.

    Do you see now how it all goes together.

    Kill the banks and the high earners and you destroy the only money making machine in the country. Why do you think Germany and France want to control it.

    Now go away you silly Hemmett like person.

  9. CO: I was sorely tempted to do the same.

    Julietee: I’m not a supporter of bankers, most of them are sadly dysfunctional. For this reason I usually also stay away from other peoples fiscal or monetary problems.

    Are the banks fulfilling their obligations under the deals they made with the Government? If yes, then they can clearly use their money “In the best interest of the shareholders” and if they decide bonuses are justified, so be it.

    If the “Bailout” is anything like that undertaken here, and as usual the politicians had to be dragged to the table and forced to accept a potentially profitable opportunity, it could be one of the better decisions made by any administration.

    I did follow the link provided and it appears that about £750B of the £850B are in the form of “Insurance” and “indemnification”, these are only “costs” to a politician, to a normal person they only become costs if some later event requires payment, in this case it would appear that the banks involved are making good returns and an event of default will not be likely. If the true cost is of the order of £100B and the returns are anything like those expected, this could be a deal made in heaven for the Government. Perhaps an understanding administration will lower your taxes as a result?

  10. Aslo one must not forget that Lloyds is in a state only because the evil one eyed scotsman insisted they purchased the failed HBOS to save jobs north of the border.

    But I wonder what they offered the top guys at Lloyds to say yes?

  11. On this one, Julie, and I’m not an economist, I would say that Rick and LW have explained it well, or should I say that their comments reflect my understanding of the situation.

  12. I’d listen to Rick, it is his profession after all.

    It also speaks volumes that it is a profession that Rick chose to abandon. Great perception mate. 🙂

  13. Minty not burn out. I just decided that I hated what I was doing and the people I worked with. So changed career completely. Money is not guaranteed but a lot more fun.

  14. Ferret :

    I’d listen to Rick, it is his profession after all.

    It also speaks volumes that it is a profession that Rick chose to abandon. Great perception mate. :)

    I saw the writing on the wall, that is if I stayed in banking the wife would have killed me just to get the 3 years salary and 3/4 pension of someone dying in service.

  15. Janus, yes, I did miss the irony. I hope the others did not.

    Peter Barnett, yes, it is a very good question.

    Cuprum, are you saying that if you are a bank and screwing the public for billions, it’s OK to be greedy and immoral, but if you are nicking a pair of trainers it is not?

    To the others, your understanding of finance seems bizarre. Rick’s especially. Your years in banking must have adled your brain.

    For a better understanding I recommend two excellent books:

    Whoops, Why everyone owes everyone and no one can pay, by John Lanchester
    and
    The Enigma of Capital and the Crises of Capitalism, by David Harvey (which received an excellent review in the Financial Times)

Add your Comment

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s