Time To Let The Banking Industry Go?

George Osborne is to take legal action against Brussels over the European Union's proposed move to cap the bonuses of thousands of British-based bankers.

A decision to formally challenge Brussels in the courts over measures to restrict bank bonuses echoes a similar legal action launched by the Treasury in April over the EU's proposed financial transactions tax (FTT).

Mr Osborne is expected to say that the proposed cap – which would impose a ceiling on bonuses of twice the base salary of a bank employee – risks undermining the City's status as a global financial centre and the objective of creating stronger and safer banks.

The Prudential Regulation Authority (PRA), an arm of the Bank of England, is also opposed to the cap , arguing that it risks increasing instability in the banking system by driving up fixed costs.

British-based lenders have argued against the cap, saying that they will have little choice but to inflate basic pay if they are to compete with rivals unaffected by the new restrictions.

Douglas Flint, the widely-respected chairman of HSBC, has paved the way for Europe's biggest lender to increase salaries in time for the introduction of the new ceiling.

The British Bankers’ Association has predicted that 35,000 bank employees around the world will be affected by the cap, approximately two-thirds of whom are based in the UK.

A Treasury spokesman declined to comment.

I am staggered by this piece of news and it leads me to ask a question of those who may be more in the know than I am: can we afford to keep banking as our main source of income any more if these bonuses are going to continue to rise?

I said from the outset that the banks should have been left to sink or swim and let consumer choice decide which banks are worth keeping (i.e. those that put their customer before overly large salary packages).



http://uk.news.yahoo.com/osborne-tak..._ylv=3#e9f2OcW

Re: Time To Let The Banking Industry Go?

I also said we should let them sink or swim. We either have a capitalist society or we nationalise things can't IMO do both.

So as an old socialist I would suggest nationalising, but that won't be very popular these days I guess.

Re: Time To Let The Banking Industry Go?

It is here Julie, - I'm all in favour!!! - Karl Marx was right!!! - Capitalism IS in crisis.

Re: Time To Let The Banking Industry Go?

You raise a good point - is capitalism being funded/supported by socialism?