Never mind the petty criminals who might come and steal from your house, the biggest thieves are legal.
Three years ago this week, the collapse of the American investment bank Lehman Brothers signalled the onset of the global financial crisis, which has since escalated into a sovereign debt nightmare.
In response to the financial services industry’s manic greed and incompetence, the British Government last year established the Independent Commission on Banking. On Monday, the commission published its final report, calling for Britain’s banks to be broken up, ring-fencing their retail arms from the investment ‘gambling’ operations. That sounds fine until you then read that the banks will have eight years to implement the changes. How much more of our money can they loose in eight years?
This week a rogue trader at UBS lost £1.3 billion in a string of reckless transactions. Although he has been arrested and charged and will presumably go to prison, it will be the customers of the bank who will pay; those whose pension funds were held by the bank will be the losers.
It was highly paid, bank wizards that got the world into the financial mess that it is in, it was they who invested in toxic debt in the hope that it would pay off. As a result millions have lost fortunes on their investments, that is except the bankers themselves who are still paid obscene salaries for loosing our money.
- The two best-paid staffers of Barclays’ investment banking division, Jerry del Missier and Rich Ricci, last year earned £47 million and £44 million respectively in salary, bonuses and share-based awards.
- The average pay per employee — which takes in secretaries and cleaners — at the five biggest American banks last year was £252,000.
- The average pay of Barclays’ 230 best-rewarded employees in 2010 was £2.4 million.
The banks justify these amounts by saying that they need top people to handle the sums of money involved. So why is it that, when enormous sums of tax payers money have been used to bail out these institutions and in spite of the huge losses their customers face, the people who got us into this mess still earn obscene salaries?
A quick look at the interest rates that banks charge for loans compared to the rates they will give you on savings accounts tells you why.