Oct. 18 (Bloomberg) -- Bonuses for 5,000 or fewer investment bankers around the world are unjustifiably large and reflect "market failure" because their institutions tend to overcharge clients, U.K. Treasury Minister Paul Myners said. "We're talking here probably about less than 5,000 people globally who are being paid these enormous bonuses," Myners said today in an interview on the British Broadcasting Corp.'s Andrew Marr show, when asked about the size of payouts for employees of Goldman Sachs Group Inc. "That has to stop. It isn't justifiable, it can be a source of risk." Goldman has set aside $16.7 billion to pay employees so far this year, close to the amount it allocated in the first three quarters of 2007, when compensation reached an all-time high. Royal Bank of Scotland Group Plc said today that it hasn't taken decisions on bonuses yet after the Sunday Times said that some employees may take home record pay. "There's an element of market failure here," Myners said. "Quite frankly, the clients of these investment banks probably are not challenging enough on the fees and the very large spreads that these investment banks are currently charging. "I'm saying to companies: `For goodness sake, why are you paying these fees?'" he said. "I'm saying it to pension funds: `Why are you paying such large spreads?'"
Oct. 18 (Bloomberg) -- Bonuses for 5,000 or fewer investment bankers around the world are unjustifiably large and reflect "market failure" because their institutions tend to overcharge clients, U.K. Treasury Minister Paul Myners said.
"We're talking here probably about less than 5,000 people globally who are being paid these enormous bonuses," Myners said today in an interview on the British Broadcasting Corp.'s Andrew Marr show, when asked about the size of payouts for employees of Goldman Sachs Group Inc. "That has to stop. It isn't justifiable, it can be a source of risk."
Goldman has set aside $16.7 billion to pay employees so far this year, close to the amount it allocated in the first three quarters of 2007, when compensation reached an all-time high. Royal Bank of Scotland Group Plc said today that it hasn't taken decisions on bonuses yet after the Sunday Times said that some employees may take home record pay.
"There's an element of market failure here," Myners said. "Quite frankly, the clients of these investment banks probably are not challenging enough on the fees and the very large spreads that these investment banks are currently charging.
"I'm saying to companies: `For goodness sake, why are you paying these fees?'" he said. "I'm saying it to pension funds: `Why are you paying such large spreads?'"
You can say that again, and to mutual fund savers as well! I feel just as exasperated as he does. Why, why, why? Peak oil is not an energy crisis. It is a liquid fuel crisis.
"I'm saying to companies: `For goodness sake, why are you paying these fees?'" he said. "I'm saying it to pension funds: `Why are you paying such large spreads?'" You can say that again, and to mutual fund savers as well! I feel just as exasperated as he does. Why, why, why?
You can say that again, and to mutual fund savers as well! I feel just as exasperated as he does. Why, why, why?
These companies didn't make bad loans because they simply had lax procedures, these companies were all about making large short term profits that could be creamed off by the directors ith little thought for the long term viability of the company. They seemed almost designed to go bust, but only after certain well-placed people were able to walk away with sackfulls of cash. This is City SOP of parasitism practiced as naked piracy. keep to the Fen Causeway
