• No.10: Darling takes caretaker reins from Mandelson

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Scotty, London

Goldman Sachs converted into a bank to enable it to participate in the TARP program, so thus is exactly the sort of entity which would be forced to split under a new Glass Steagall act, which is nothing to do with regulation per se, but an act of law which defines how a business must operate. Tell me why investment banks should have access to free money in a manner not available to every other business ? If that anomaly is cut off, as Glass Steagall MK II would do, they would have to operate like eveyone else, and that means a far more measured approach to risk

Lehmans and Bear Stearns staff lost everything, which has a certain ironic ring about it although once again, if the government sets in place the legal framwork of risk that an institution can operate, and individuals achieve success within those parameters, then they are entitled to a commeasurate reward, and I don't see why anyone has a problem with that.

I do agree with you that this whole exercise by the Government is a cozened attempt to obfuscate their own weakness in confronting the root cause of the financial crisis, and as you say, make the people think that they are doing something about it by singling out the recipients of bonuses for sanction.

Having said that, perhaps the banking dignitories could have applied their own restraint given the dire economic conditions and been rather less imperious in awarding themselves such inflated bonuses when many were bailed out by thetaxpayer

- John, Twickenham

John from Twickenham,

well done, you've mentioned Glass Steagall. But now Goldman's et al, are not unregulated it has no relevance now does it?

go check out Lehman Bros? 30% of the company was owned by the staff through long term vesting bonuses. exactly the stuff that the reactionary and uninformed are advocating for everyone else to use now.

what the masses aren't getting, is that this is blame shifting exercise from a government who needs people to believe in a great mass of wrong doers to get re-elected. but if the gullible masses still want to believe in good cop, bad cop that's fine but equally I have some marvellous opportunities over at Low-Tide-Villas.

- Scotty, london

If Bankers are paid such large salaries and bonuses then quite soon in their careers they will have more money than they can spend even after numerous mansions, yachts, helicopters etc are purchased. At this stage more and more money will have no incentive whatsoever and will instead just be a status symbol. So in ordere to incent key workers the combination of salary and bonus should be just enough to keep them hungry. Alternatively they could get jobs that are rewarding and interesting enough to avoid huge pay packets.

- F Frinton, Ealing England

I agree that bankers salaries are unfair, but the govt. and public have got to realise that this industry is quite capable of upping sticks and moving to Frankfurt or Paris.

The Germans and french are rubbing their hands with glee at becoming the new financial centre of Europe.

We killed off manufacturing and agriculture long ago, and now we are shipping our one remaining industry (financial services) offshore.

- Simon, London

About time,why should 70% of the population live on the poverty line while 10% live like kings,next we need the expenses money back.

- David, london

It is not what is paid that is the problem; it is that Mr Brown and Mr Darling have given these idiots immunity from going bust or ever losing their jobs.

Let the Banks pay whatever they believe is necessary, but ensure that their own stupidity is on their own heads.

- Ian, Reading, England

Yet another prime example of a ridiculous government ultimately punishing the country's economy after doing a great job of ruining it themselves.
Labour & finance have never & will never go together. Socialism is socialism & it dumbs down the masses whilst taxing them to extinction.
The City thrives on risk & the survival of the fittest - things this government has sought to diminish at every opportunity and in every walk of life.

At least the Tories will have a better idea of how to run the City rather than blundering through trying to placate the masses in order to get their vote for an already doomed election campaign.

- Annoyed, The City

What is really absurd is the profit banks make on loans etc. The government needs to cap the absurd interest rates that see banks make profits of 200-300% on various loans. House loans should be no more than 3%, and even that is high over a 30 year fixed peroid.

- Dirk Diggler, Soho, London UK

Why bother taxing the bonuses. The government will only go and waste that money too. Far better to regulate the banks properly and to stop them ripping us off, with their charges, maintenance costs, fees, and terms and conditions small print.
The government could start with forcing them to return the money they fleeced from our accounts, it could make the difference in an election year.

- Mr S.Port, London

A few years ago I would have argued that bankers remuneration was nothing to do with the state. But I now know different.

The banks, and indeed all large businesses, are implicitly underwritten by the taxpayer and are presumably managed on that assumption. Under these circumstances it is perfectly reasonable for the state to dictate banker’s salary and bonuses.

The bankers time worn argument that they must pay huge bonuses to attract "talent" are nonsense. I have known many bankers - none of them were exceptionally talented. All huge remuneration packages do is create hubris that leads to over confident risk taking .

Let the greedy bankers who won't accept more realistic levels of reward take their precious "talent" abroad - they won't be missed.

- Alan Thomas, London

I agree that the executives should be taxed at 90%. I would also be happy to see the financial services industry downsize and for a lot of it leave London. The London economy has become far too one sided. The City is too dominant, it has made London into a city full of aggressive yuppies, it has attracted millions of money-worshiping immigrants to move here and it has also pushed up house prices to ridiculous levels for everyone else, as city workers invade one residential area after another adding to their portfolios of houses and flats and forcing everyone else to cough up or get out.

- Alex, London

It always strikes me as rather barmy when the rules apply to one group and not another,bankers and directors and other such like groups, cry out we must attract the best staff by paying them grossly over the odds,but this rule does not apply when they talk about teachers,nurses,railway workers etc!When people like Scotty,London, talk about paying sales men commission to sale,his argument is total nonsense,if people wont a car they don't need to be sold one,when i wont to buy a house i don't need some body to sale me one,i will go and buy one,in fact most people don't like to be bothered by sales people,its patronising to believe we need to be sold something.OK a good broker/banker may make his company a million,but then a good teacher will be part of producing educated future generations,a invaluable investment.You just try to get to your bank with out a train driver,you try to get to your shops and jobs when there are no road sweepers,and when you have your cardiac arrest go to the hospital and find no nurses,only then will priorities change.We know the price of every thing and the value of nothing.

- Kev, London-UK

It would make a lot more sence if we the tax payers beleived that the money we were already paying was being used properly, and not on mp's expenses, over paid quango cheifs, non jobs, funding very gernerous pensions for those who retire at 60, etc, etc, etc.

- Very Very Angry At Paying Tax For Mp'S Expeses, Home Counties

However it is done, UK Government working with all G20 Govts must change balance where financiers pick up rewards and we taxpayers pick up the risks. If anything, the current incentive for bankers to take even more risks is even greater, knowing we mugs will have to pick up the tab for their failures. This cannot continue and if Govts don't act it won't be that long before taxpayers do it themselves leading to all sorts of unintended consequences.

Along as all global financial centres act in unison there is nowhere for bankers to run to for bigger bonuses. There are also now plenty capable of replacing them.

- Mike, London

capping salaries is stupid.
If they want to change the system they need cap what banks charge. This should be, contained, to a cost+ forumal.

The problem is that the fees that banks charge are not inline with the work that they do, and that chinese walls are BS.

Until this is changed the situation will perpetuate because there are too many vested interests.

- Stefan, India

Scotty, London

Speaking of the ignorant masses, presumably the fantasy profits created out of accounting legerdemain at RBS for example, should not have resulted in bonus payments to RBS executives as they were always sitting on a timebomb of their own making caused by the accepted flawed strategy of borrowing short to lend long ?

I agree, and have said as much earlier, that the bonus culture is merely a symptom of excessive risk taking, which is the indubitable fact of the banking industry ever since Glass Steagall was repealed.

If people make a sufficient return based on their own efforts without the sort of systemic risk which the global economy has suffered, then they should be rewarded accordingly, and in this I consider this latest proposal to be little more than an attention seeking piece of gimmickery.

However, lower risk usually means lower reward, and the question you should ask yourself is whether people riding the crest of an asset inflation wave, should be rewarded despite the excessive risk they assume, just because momentum happens to be going the right way for them ? Or do you sort the wheat from the chaff by capping the level of risk that is acceptable (and this is the least the Government should do considering the taxpayer is footing the bill for investment bankings errors of the past) and then reward accordingly ?

- John, Twickenham

What these bankers don't seem to understand is that there will always be good people willing to take on jobs like Sir Fred Godwins even if they have to work for peanuts. There will always be applicants, so the greedy ones can go jump in the lake.

- Dhan Raj, Basildon

THIS GOVERNMENT HAS DESTROYED EVERY INDUSTRY WE ONCE HAD, THEY DIDNT EVEN BACK WIND POWER, SO THEY THEY MIGHT AS WELL DESTROY THE CITY, OUR ONLY SUCCESS STORY.

DARLING DOES NOT UNDERSTAND, FINANCE IS A GLOBAL INDUSTRY, AND WILL SIMPLY MOVE ELSEWHERE. BUT THEN I SUPPOSE LABOUR IS DESPERATE TO GET THE VOTES OF THOSE WHOSE MINDS ARE TRAPPED IN THE THIRTIES.

- Alan Green, Woodford Green

I presume they're talking about Man City ?

- Chris, Tonbridge,England.

This clueless bunch don't have a chance at doing anything worthwhile. I honestly believe their aim is to ruin the country because eveything they do and propose to do would have that effect.

- Rikrok, London

how can it be right that a teacher, who educates our young, a fireman, who saves us from burning wrecks, a policeman, who protects us, a nurse, who brings us back to health, all get paid *significantly* less than a banker who manages our money? each performs an important, vital function in society, yet the pay mismatch is staggering. perhaps it is time for a fundamental rethink.

- Sam, london

ah look, ignoring the ignorant outrage of the masses, the fact is you need to think of bonuses like sales commission.

if someone sells x number of cars, they will be paid their commission (rightly) regardless of what happens elsewhere. if the company makes a loss, well they would have made a damned sight bigger loss without the sale of all those cars. don't pay that guy, and he will move and sell for someone else - in fact many have.

now, if you're worried about the good car salesman being paid his commission above his nominal base - then you can hike up his base to something resembling his total package.

but then, he has no incentive to sell any more.

bottom line, this country would be better off if the uneducated and uninformed restricted their opinions to what they knew about, not what they have been told or read about.

- Scotty, london

They were happy enough to collect the tax receipts in the good times though don't forget that tax receipts from both the Bankers and the Banks. We have the next scandal to hit yet a mark my words it will come slithering along in the form of Public Sector Pension Deficits.

- Wallytrader, London

Another government wheeze to deflect attention away from the fundamental porblem with modern day banking.

The problem requiring a solution and one which would prevent risk taking of the sort whioch has brought the global economy to its knees, involved the current relationship between retail banking and investment banking.

Darling, Cable and anyone connected with finance knows that the investment banks have access to billions of pounds of depositors money, which is virutally free given the derisory rates of interest paid on them, by virtue of the tie up between the two opposing types of banking.

With such backing, the investment banks take riskier positions than they otherwise should because they thought that with such diversity, the chances of default were minimal.

It wasn't and thus we have the current economic recession.

The solution therefore is to split retail banking from investment banking, so that if the investment banks want to finance a certain investment, not only will they have to do so on a case by case basis. they will also have to pay market rates to do so, just like every other business in the world.

But the Government doesn't wish to upset their friends in the banks, so are too spineless to introduce the much needed Glass Steagall II, that is the ONLY solution to risk taking.

Instead, they choose to attempt this appeasement of media stoked public opinion, by focussing on the bonus culture. Why cure the cause when you can treat the symptom?

- John, Twickenham

Has this Goverment not yet learnt that you cannot dictate to the markets.

We are now a global economy, deals can be done in a milli second anywhere in the world, and we are going to bring in rules for our bankers, who will simply leave the UK. This is gesture politics of the worst kind.

- Steve M, LONDON

Andy, you can't just legislate against speculation. For a start the companies operate in global markets, you're suggesting crippling London businesses while their global counterparts remain unfettered. That's just the start of the reasons, I could go on for pages.

You'll never see off balance sheet spending go as Gordon's been doing that for years to the tune of billions.

Capping wages won't work anyway, it's a punative measure which means people will be trying to figure out how to work around it rather than an incentive to long term stability. Labour's motto has always been punish rather than reward as they lack the insight or ability to figure out how to encourage and reward positive action. Even if they were that clever, the gaping hole in the public finances mean they're committed to taxing everything under the sun at every opportunity to cover up their gross incompetence.

- Ian, london

About time too. At last some real Labour Party proposals from New Labour. I might even think of voting for them.

- Mick, London, England

Compared to the abject waste of the UK taxpayers money by New Labour over the last 12 years, bank risk taking looks fairly mild.

- Chris, Woking. UK

I'm so bored of hearing about the naive advising the dim. The best thing compass and their ilk can do is tell these ignoramuses to go. Forget all this tax rubbish. Typical that people rush to condemnation and forget about sucking in foreign investment in a very competitive world. My got it feels like the dying days of labour in 1979.
Are we going to get the man (David Milli(Tali)band) who thinks terrorism is OK sometimes for a week too?.

- David S., Ealing

If this gets through then the UK will become a desert.

- Adrian, London

Goodbye London as a Financial Centre. This Government which has destroyed pensions, caused the biggest recession for decades ,on whose watch created more unemployment than ever before, now is going to bite of the hand that has paid more taxes than the rest of the country put togther. What a load of envious ill educated morons.

- Tonyjohnson, Hythe Kent

Oh no, he's at it again. Darling changed the entire capital gains tax system because of two or three Private Equity investors had escaped a bit of tax.

He overhauled the entire legislative procedure in order to attack three people who had made the headlines. This is a man who reads The Sun in the morning and then dreams up policy over his cornflakes where the only concern is how it will pander to greatest number of the public.

That it may have knock on effects is irrellevant.

- George, London

The solution is not to legislate salary caps, but to prevent speculation. Ban speculation in commodities (energy, softs, grains). Increase the capital requirements and stop off balance sheet financing. Stop banks from lending more than their deposits as Northern Rock, HBOS, B&B have been doing which is why they have failed. Legislate against short selling. Basically take away the blood that these people suck.

- Andy Davids, London

There should also be a law capping the salaries and perks of MPs, councillors, senior civil servants and everybody else who is ripping off the taxpayer in this country.

- Simon Ellis, London E8

While I fully sympathise that the public is scandalised by the nose in the trough attitude of many bankers, any attempt to cap remuneration in the industry will simply see the business head off overseas. That would have major implications on the tax take and the balance of payments - we have to remember that invisibles rather than manufacturing are where we make the money.

- Paul, London

Dizzy Darling does not have a cat-in-hell's chance of changing ANYTHING in the banking sector.

This is yet more spin and waffle in an attempt to placate Joe Public - who is sick-to-death of being taxed out of existence and ripped off by banks, energy companies, supermarkets, petrol stations and everything else that attracts substantial VAT receipts for Dizzy darling's coffers.

THE BANKS ARE A LAW UNTO THEMSELVES AND ALWAYS WILL BE.

GORMLESS BROWN, DIZZY DARLING AND MEDDLING MEDDLESUM DO NOT WANT TO UPSET THEIR WEALTHY CRONIES.

- Reuben Camara, Republic of Morecambe, UK

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