Bank Bonuses and Other Evils

To use that hackneyed expression, 'back in the day' bonuses were only ever given for some truly exceptional work which was above and beyond the call of duty. More recently bonuses were given for over achieving a target but it seems many bonuses these days are part of the contractual compensation package and are paid for simply doing the job with the amount being a specific percentage of the bonus pool. This easy money leads inevitably to arrogance on the part of the recipients, to sloppy performance and an attitude that the money is a God given right and worse that it is deserved. Many of the recipients often carry out only the most mundane of tasks in order to achieve their bonuses which anyone could perform if they were lucky enough to be employed in the right part of the bank. It seems there are quite a number of such lucky employees which I for one would not complain about if the games the bankers got up to had not contributed significantly to the recent banking crisis and which are set to bring about another such crisis if there is no reform. Charles Moore has a most interesting article about all this in the Telegraph today as well as his interview of Mervyn King. Yes something has to change so that banks can never be too big to fail and bonuses can go down as well as up and where there is bank failure clawed back.