Just how low has British Banking stooped?

Discussion in 'Economics' started by Herrumph, Jul 4, 2012.

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  1. A bit of a tangent to the Diamond bashing LIBOR thread.

    Up to now I have been fairly relaxed about the monster wages and bonuses paid to bankers on the basis that the financial industry is critical to the UK economy and you have to pay for top quality. Plus it raises taxes.

    Leaving aside the fact that Bob Diamond has been paid 100s of millions for effectively selling off the bank to Arabs and overseeing billions of pounds of losses; as a condition of him taking the job, Barclays agreed to pay off his outstanding tax bill of $5.7 million!

    I can understand owing a few thousand to the Inland Revenue and possibly getting a bit of a bill at the end of a FY, but 5.7 million? Not just does that seem incredible for a self-professed financial genius, but he then had the gall to demand it gets paid off by his new employer! If I owed the IR a vast amount of money, I wouldn't go bragging about it to future employers.

    What sort of indictment of the banking industry is it that he owned up to owing so much, expected it to be paid for him and staggeringly the heads of one of the world's largest banks decided it was perfectly OK.

    Something has gone horribly wrong with business ethics!
  2. Isn't Business Ethics,an oxymoron ? =\\\\
  3. I agree, an outstanding tax bill of $5.7m does seem rather large.

    However, it should have counted as a "golden hello" (which occurs quite frequently in the finance sector) and should have been subject to tax and national insurance under the employer's PAYE scheme, as it represents employment income for becoming an employee.

    Having said that, no doubt a sexy tax avoidance scheme (the likes of K2?) was used to mitigate his tax liability.
  4. To be fair, those Self Assessment forms are a bit complicated.
  5. A few years ago a footballer called Sutton (mate of Shearer) playing for Norwich, got them to pay the child support he was supposed to pay for some Air Hostess he knocked up. When he left them, and the club stop said payments, he tried to wiggle out of his sprog dues saying that Norwich should carry on with them. Don't know how it was sorted in the end.
  6. Absolute corruption.
  7. Look at some of the sweet-heart deals that the head of IR cut with the likes of Goldmans. Private Eye is the best place for details.

    I've stopped reading it because even though I live abroad its exposés wound me up so much
  8. I met some of his subordinates the other month and bollocked them about that.

    I shouldn't have really as they were offering me a job.
  9. Isn't paying his tax bill income and therefore taxable?
  10. Certainly must be a benefit in kind or some such.......

    Having checked. Yes it is. If this happens, it is regarded as additional income, and the wage is "grossed up" by HMRC, using a special system, thus the tax liability is higher.
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  11. Think my MP would like me to stop reading Private Eye...........
  12. ...which would then be paid by the bank.
  13. I can't really get outraged morally about City remuneration. I'd gouge just as hard if given the opportunity and I manage a decent screw now and then. In my experience ethically lawyers are worse and doctors not much better than the folk watching screens in finance. None measure up to the rectitude of used car salesmen.

    The bankers got lucky in the 80s is all, their heady fortunes will probably wane for Darwinian reasons in the coming years, the industry is completely unsustainable in its current form. An economy needs banks just in the way it needs decent sewage systems. The problems begins when finance starts to get mistaken for actual industry rather than a supporting service much like shoveling shit.

    The poor souls deserve decent pay, their hours are long, some of the jobs are immensely boring, stressful, technically quite difficult and the company is usually mind numbingly tedious. Banking is a bit like IT with better lunches and bespoke suits. Though IT bobs are not as likely to become helpless wards of the tax payer.

    The problem is more one of bad incentives in a very risky business that is finally backstopped by the state and when bloated remunerations packages eat into things they manage like pensions and investments screwing the customer. Shareholders in banks really should be getting angry at the slice of profits that's disappearing into the employees pockets, especially the disproportionate wedge some distinctly lack lustre management teams rake off. It also pulls genuine talent out of the real economy in areas like science, just to waste their brains doing the math of shuffling money about instead of creating anything.
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  14. Look on the bright side at least you are not being charged for your account............

    However, the new Barclays Chairman seems to think that you should be.

    Sad thing is is that we need them, cannot do business without them and yet they have the collective morals of the bunch that sat around a table deciding on the Final Solution.