In defence of bankers

Opine

[oh-pahyn]

–vb/ to hold or express an opinion.

[Origin: 1575–85; < L opīnārī to think, deem]

Text Box: The term ‘bonus’ is not really appropriate in this instance. The payments were made to staff who effectively worked for free for a year, on a nominal salary out of a sense of duty and public service. They were not part of the bank when it made its loss-making trades, and instead are there now to put out the fires that others started. Without these knowledgeable and talented people being willing to help unravel the web of debt that these huge distressed firms have caused, there is little chance the mess will be sorted out any time soon. Some bankers certainly are fair game for criticism – Sir Fred Goodwin, for example, has earned all the invective that has come his way (although not the vandalism of his property). But the media and politicians must not demonise the entire industry, or blame those trying to rescue the situation, for the past mistakes of others. Doing so only serves to score cheap political points. This episode does not bode well for the bigger issues the world now faces. We are at a defining moment for capitalism and the End of History. Society needs a mature, informed debate to take place to examine the nature of capitalism, and the role of finance in our economies and societies. There is little chance this will be achieved if our leaders continue to create hysteria and vilify an industry for the mistakes, however epic, of a few. comment@opine-blog.com See also: Profit, loss and responsibility

27 March, 2009

In defence of bankers

AIG recently came under fire for agreeing to pay $165m of bonuses to staff in its Financial Products unit, the section responsible for its reckless CDS trades that brought the company to its knees.

US politicians from both sides of the aisle were quick to express their outrage at the payments; eventually President Obama joined the chorus of condemnation, and even AIG’s new CEO came to the party, asking for those who received bonuses to return them.

However, a resignation letter from an Executive VP at this unit has highlighted how misdirected this opprobrium has been.

> Foreign

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