The UK, unsurprisingly, had opposed the ban. Regardless of who has been in power in the UK, it has always been a case of the City comes before the citizen. It was so with Margaret Thatcher and it was so with Tony Blair and so it will continue to be.
Bonuses are great, especially for those on the receiving end, I know, I’ve been there. But for those who don’t have the Rolexes to show for it and whose only experience of banker bonuses is what they’ve seen in the media, there’s something they should understand about the mind-set of those involved in the bonus bonanza: Regardless of the size of the package it’s never, ever, EVER, enough.
“$10 000? Not enough!”, “$100 000 is that all?”, “$1 000 000 They just don’t appreciate me!”
Bonuses are to a banker what crack cocaine is to an addict. There’s always a better high to chase.
Be it investment banking, private banking, retail banking, it doesn’t matter what kind of banking, the fact is that banker bonuses are designed to suck the maximum amount possible from the client. The problem is that there is no correlation between what is best for the client and the size of the banker’s bonus.
As long as this remains the case, despite legislative attempts to protect clients, a bank will always sell its clients the most profitable product it can legally get away with. The most profitable products are the ones with the highest fees and often involve leverage.
In Europe, MiFID has created a playing field that banks are working hard to navigate, creating high fee products that still adhere to the risk profile of the client. Despite the intent of the legislation, still, what is best for the client does not even enter the equation from the bank’s perspective.
It should come as no surprise that I have no problem with a limitless bonus structure, pay bankers as much as possible, but so long as the system is set up so that the client’s interests are not aligned with the bonus structure of the banker serving the client, then the client will remain in the role of an industrialised milking cow.