But the writer of this thinks high banker bonuses are the fault of politicians (and also has some interesting comments about whether google is monopolistic):
Meanwhile, it seems that there is a rescue plan forming for the Greek economy:
http://www.telegraph.co.uk/finance/economics/7332415/Germany-and-France-agree-to-rescue-Greece-with-conditions.html
though some people are more worried about problems in the USA - time for Arnie to be the (debt) Terminator?
Some of you may have read that the UK GDP growth figure for Q4 2009 was revised from 0.1% to 0.3%. As this article points out though
http://blogs.telegraph.co.uk/finance/edmundconway/100004040/dont-be-fooled-gdp-was-actually-revised-down/
The extent of economic recovery is important, since nobody is sure when the right time will be for cuts in government spending in order to reduce the budget deficit.
(LET ME KNOW IF YOU LIKE THE IDEA OF THIS KIND OF SUMMARY OF THE WEEKEND PAPERS, AND I'LL TRY TO MAKE IT A REGULAR POST.)
I think that such posts are very useful and interesting.
ReplyDeleteI think that this kind of material is very good because it shows us hoe the economy works in real life not in textbooks
ReplyDeleteIts interesting, there is so much publik anger about bankers bonuses and nobody even question himself why. Top managers are the people who decide strategy of the bank, and its future depends very much on these decisions. Today banks such as RBS are in position where one wrong decision from the top bank managers may have fatal consequences for the whole bank. So preventing managers from going and encouraging them to do their best is a question of surviva for the bank, especially in the current economic situation. Margareto Patalo says that lots of unemployed bank workers if enough to make those who have job to work hard and therefore bonuses can be cut. However this will not motivate workers with positive motivation. Big bonuses and fear of loosig the job acts like a big carrot and a big stick and it is the best possible way of motivation now.
ReplyDeleteI don't think people are so angry about banks which have not received help from our taxes (over £400 billion).
ReplyDeleteBecause of this help, there will need to be massive cuts to government services, pay freezes and many lost jobs in the general population.
This is why there is a lot of public anger about large bankers' bonuses especially when a taxpayer supported bank like RBS acutally lost £3 billion in 2009.
Sure, bonuses for success, but where else are bonuses paid for such big failure?
Failure of RBS or any similar bank may cause more damage to the economy and society than massive loss of job or pay freezes. Government is not completely stupid so it understands the importance of ceeping big banks floating.
ReplyDeleteI don't think many people disagree that we were forced to help banks.
ReplyDeleteBut once they had received my and millions of others' tax money, perhaps some sort of control should have been imposed upon them.
It seems that many banks are behaving now in exactly the same way as they did BEFORE the credit crunch, that type of risky behaviour that caused all the problems in the first place.
Have any lessons been learnt by those who engangered all of us, or can we expect them to?
If the answers are no, shouldn't government impose regulations on the banking sector?