Dealbreaker's Matt Levine and the FT's Lex nailed it on the EUs directives regarding Banker Bonuses. They are well-stupid and there will prove no shortage of clever arbitrages to circumvent them - an area that, as Matt points out, Banks are particularly adept.
What has been ignored in the discussion is the common misperception and difficulty in defining what, in fact, a Banker IS. Images abound: The community banker of Jimmy Stewart; handlebar-mustached JP Morgan; comic-strip City Gent "Alex"; Bird & Fortune parodies; Michael Douglas or Russell Crowe's maverick trader, even before approaching the wide-boy trader stereotypes. Yet, do any of these reflect the vilified targets of Brussels?
Is M&A banking"? Is securities-research banking? Is securities broking banking? Were Nick Leeson or Jerome Kerviel "bankers"? Is the clerk at my local HSBC Premier desk a "banker"? What the army of computer programmers who code the transactions or payment systems, and the web-interfaces of retail banks or the securities custody officer? Or the swaps desk or the writers of CDS? Are they "bankers"? Is stock-loan and repo "banking"? Was the London whale, Bruno Iksil, a banker? An FX spot or options market-maker? The traditional mythical view of the deposit-taking coiffed vested & suited gentleman lending directly hardly reflects the realities of modern-day banks, bankers, or banking.
If it is difficult to define who or what is a banker, given the complexity, then a slippery-slope problem arises. Doubts also surface about whether measures are intended to reduce systemic risk and public exposure to it, or whether the issue is really half-baked populist demagoguery conveniently aimed at the high compensation of the exposed and despised target of the moment (no, not Lance Armstrong). One would be right to ask, Why bankers? Why not actors? Or CEOs. Or Athletes and rock-stars? Or rentiers, lawyers doctors.....
Yes, it is likely that "Bankers" are overpaid by any measure. And they are partially culpable for economic and financial carnage from 2008 onwards. Culpability, however, runs wide and deep, and law-makers and vilifiers both would do well to examine their own role and responsibility in the crisis and its outcomes before shifting the blame wholesale.
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1 comment:
Cassandra,
In my neck of the woods (San Francisco) at Wells it's anyone who works there except a teller. Every incompetent clerk (and I hate to say it -- but it's true) who LITERALLY cannot complete a deposit ticket is now a "banker".
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