We're hardly surprised by the public outcry at the news that British banks are set to pay out millions in bonuses to their staff. You don't need an economics degree and a subscription to the FT to know that the global recession arose out of a crisis in the banking system. And plenty of us are stomaching the resulting redundancies, pay freezes and budget cuts. So, to hear that even the worst-performing banks (Royal Bank of Scotland, who brought us the single biggest loss in British corporate history, we're looking at you) are set to pay out nearly £1 billion in bonuses, sticks in our throats a little. Just like the practice of tipping in restaurants, in boom years bankers' bonuses became less of an optional reward and increasingly expected and/or relied on. But in a restaurant we can choose whether to leave a tip or not – in this case the banks have decided for us: we're stuck paying that tip. What rankles even more is that the bonus system is acknowledged to encourage risky (and potentially high-profit) decisions, so by granting these bonuses, banks are propping up the practices and systems which got us all into this mess. Argh!
In the US, Barack Obama has disparaged the suggestion of bonuses for bankers as 'shameful'. In France, the government has gone one further and put a limit on such bonuses. But in this country, all we've got is the Treasury's promise of an inquiry. Which is shorthand for a 'fob-off' – after all, by the time the results of this inquiry are made public these bonuses will all have been spent. So what do you think – should we all move to France?