.. but didn't have time to blog about.
Now this might come as a bit of a surprise, but as an investment banker, I would say that nobody is "worth" a million pound bonus, which may come as a bit of a surprise, but I look on life as it used to be looked on when investment banks were largely private institutions, and commercial banks funded by public money (not government, but institutional) didn't pay much in the way in bonuses.
That is not to say that investment bankers shouldn't get paid million pound bonuses, but the rules should be quite clear: if the individual, his/her department and the whole bank make a lot of money, then the sky is the limit. If any of those don't do so well then all bets are off, bonus-wise. The reason is quite simple. Shareholders who put up the money for the whole operation only make a profit if all do well, so why should bankers get paid out when the shareholders don't? If the banker turns a profit and the bank loses money, then he is in the wrong organisation.
Which is why I sneered at the mealy-mouthed narrative from RBS who paid £1 million bonuses to staff in their Global Markets or whatever it is called when the bank as a whole lost £1,125 billion. First of all lets us just point out that the retail part of the bank made money, so the rest of the bank lost more than that £1,125 billion, then we could add that £550 of net income arose because of our old favourite "fair value of own debt" (for the uninitiated, RBS/NatWest's creditworthiness didn't look as good as it did a year earlier so the market widened spreads on RBS's borrowings which meant that the fair value of RBS' liabilities fell and they booked £500m of income by doing nothing more than being a worse credit.
But the most heinous part was the statement by chief executive Stephen Hester that the bank recorded a loss of only £9m to shareholders after excluding the after-tax cost of the government's Asset Protection Scheme of £1,116 million, as though this cost was some how an extraordinary item outside the bank's operating business, which is about as misleading a statement as it is possible the make. The Asset Protection Scheme costs are essentially insurance premiums paid to the government to wrap 0% guarantees around some the banks assets so that the bank does not have to apply any capital to them. But without this guarantee, the bank would not have sufficient capital to hole all of the interest bearing assets that it has on its balance sheet, so the APS costs are necessary costs of doing business on the scale that RBS currently does and without which it would have to lose revenue without necessarily losing any staff.
So RBS lost money but paid bonuses when its shareholders lost out. Normally, I wouldn't care unless I was a share holder, but since I and you dear UK tax paying reader are substantial shareholders in this dozy outfit, I think we should speak up.