The demise of Bonus Culture?

The climate seems to be moving towards a consensus,with the public at least,that something really has to be done about the insane "Bonus Culture" of the last 20 years.There seems little doubt that the excessive risk this system elicits has been a big driver in creating the current shambles we're in.

Unfortunately I fear Gordon Brown and Alistair Darling just don't get it! Their advisers on getting to grips with the situation are in general all "BANKERS" with a vested interest in maintaining the current failed system.Any move to place limits on bankers excessive pay,if they happen in the UK at all,will be due to President Obama shaming them into it.

It was also very telling that Peter Mandelson warned part nationalised RBS bankers against how new bonuses would "appear".An obsession with how things "APPEAR",rather than any real substance,has been the chief charactoristic of the "New Labour" project.

The obscenity of City Bonuses paid largely on nebulous capital gain over the boom years has massively "looted" our financial system.This behavior was akin to an individual say paying themselves a hefty bonus based on the capital gain of their property in any given year.Many home owners effectively did do this by borrowing against their properties.At least they owned the property in question and by owning property in the first place were exposed to an element of risk(unlike the bankers).Either way this was a reckless financial act.The money simply didn't exist!

But now ,with prices in retreat, how do you fill the hole? And what a hole........the 31billion(Centre for Economics and Business Research estimate)paid out in bonuses to UK bankers in just the last 4 years ,had it not already been siphined off, would've gone some way to filling it!

If the "market" worked correctly you'd expect shareholders to have called a stop to this greed.Of course these days there's a disconnect between shareholders and any moderating influence they might have had with most shares held in "managed funds".Funds "managed" by people who see no fault in a bonus culture that also enriches them.

But of course not all of those BILLIONS went into bankers pockets.A sizable chunk went in taxes to the Exchequer.That's a big reason why I don't think Gordon Brown will do anything to stop this insane bonus system.