Comment: Banker bashing goes into overdrive
To judge by the way politicians and regulators are striving to outdo each other, banker bashing will surely become a recognised sport at the London Olympics by the year 2012.
Chancellor Alistair Darling took an early lead in the contest after declaring plans to raise tax and national insurance rates for individuals earning over £150,000 to 51%. His points tally rose dramatically as tax lawyers confirmed last month that a stream of financial professionals are starting to leave the country.
Treasury minister Lord Paul Myners wants shareholders to hold banks, including pay and bonuses, to account. Nice try. Lord Adair Turner, chairman of the Financial Services Authority, got stuck in this week by saying regulators should consider a tax on bank transactions to control exuberance. He suggested that banks should unwind their tax-efficient structures to make it easy for sensitive parts of their operation to be protected if they were to collapsed gain. Raising capital requirements for banks who undertake risky activities is another part of Turner's multi-pronged bid for victory.
UK heavyweight contestant, Prime Minister Gordon Brown tends to be a little slow off the mark. But he is determined not to be left behind. He has signed up to a Franco-German letter which pledged to find ways to rein in bonuses. Ideas like long-term performance-related pay, caps on bonuses, clawbacks or salary deferral are being tossed around at the latest meeting of the Group of 20 nations.
Impressive stuff. Even French president Nicholas Sarkozy, frequently tipped as a winner of the contest, is taken aback by Brown's enthusiasm for banker bashing. He said yesterday: "Even the English understand that you have to regulate, you have to impose limits and that there are unacceptable scandals."
In a group entry, European Union bureaucrats remain determined to put restrictions on the alternative asset management industry. To get into the game, Tory shadow Chancellor George Osborne has said: "It is totally unacceptable for bank bonuses to be paid on the back of taxpayer guarantees. It must stop." And Liberal Democrat treasury spokesman Vince Cable has declared there is no justice for "massive pay and bonus awards". Osborne and Cable are behind the field in terms of political power, but they certainly make a lot of noise.
Those with a time to raise their heads above the fray can see it is getting a little silly, as Richard Lambert, director general of the Confederation of British Industry, argued yesterday. It is odd to see so many people should getting so worked up over pay when they should be concentrating on the banking sector's desperate need for a general reform. The squawk of golden geese preparing to take flight can be heard right across central London.
The politicians are fit and ready to chase them out. And in due course, one contender, whose politicians and lawmakers have no appetite for a fight, could still emerge the victor.
Its name is Switzerland.
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