Curbing Banks’ Excesses: the Tide Begins to Turn

by Pat Dodd Racher

“If we cap bankers’ bonuses they will go somewhere else.”

Not me saying that, but lots of people in politics and finance.

They assume it is normal, praiseworthy even, for bankers — people — to place personal wealth above everything else. This makes bankers just like mercenary soldiers, but we don’t place those on a pedestal, do we?

The fiction that love of money is a value we should not question permeates so much of 21st century thinking that it was a relief to hear the European Parliament’s decision to cap bankers’ bonuses at 100% of salary, up to 200% with shareholders’ approval. It is even more of a relief to know that Swiss voters have told their government, in a referendum today, to introduce a law giving shareholders the power to control executives’ pay.

Bankers used to look after customers’ money and decide to whom to give loans, but machines have taken over those jobs.  Too much of banking now is irrelevant to the real economy, and often socially catastrophic, such Goldman Sachs’ ‘structuring’ of Greece’s national accounts to make it look as though the country qualified for entry to the Eurzone. Yes, there was an apparent bonanza, but when the book-cooking pot boiled dry, the financial chefs were not handed the bill. There is a disaster in Greece: see and the Greece section in  — just two samples of the troubling reports from previously comfortable, now dejected, disconsolate nations, like Portugal, Spain, even Italy. The bankers, though still take their bonuses, still live in bubbles protected by the wealth flows they have learnt how to control.

The Greek government, no government, should set out to defraud, of course, but the amounts that ministers and acolytes can siphon off are tempting, and will continue to tempt all the time that wealth endows power. Maybe we are starting to see a gentle turning of the tide, a slight weakening of the prestige we have accorded to immoderate wealth.

Maybe, hopefully, in the near future we’ll see more votes like those in Switzerland and in the European Parliament, and the hollow refrain “they’ll move somewhere else” will be relegated to history.


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