Let the bankers earn their bonuses, through competition
Sir David Blake goes overboard titling “Why banking’s bonus culture should be defended” July 18. Yes, regulators should not try to micromanage the bonuses but “defend the culture”? No, what is evidenced by the extraordinary gross earnings available for bonuses is that the banks are not operating in a sufficient competitive environment, and much so because of the regulators.
It is the trading of non-transparent instruments in non-transparent markets; and the profitable arbitration of the risk weights concocted by the regulators that help to create those gargantuan gross earnings that need to be distributed. How the bankers and the shareholders then share the almost loot, well that is entirely their business.
We might have been better off with no regulation whatsoever, but while they regulate let the regulators respond to investors, borrowers, and taxpayers for those mind-boggling bonuses paid out to the bankers, or those mind-boggling shareholder value of banks that we have seen the last decade.
It is the trading of non-transparent instruments in non-transparent markets; and the profitable arbitration of the risk weights concocted by the regulators that help to create those gargantuan gross earnings that need to be distributed. How the bankers and the shareholders then share the almost loot, well that is entirely their business.
We might have been better off with no regulation whatsoever, but while they regulate let the regulators respond to investors, borrowers, and taxpayers for those mind-boggling bonuses paid out to the bankers, or those mind-boggling shareholder value of banks that we have seen the last decade.
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