Cap to bankers salary

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wasateacher
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Re: Cap to bankers salary

Postby wasateacher » Tue Mar 05, 2013 1:59 pm

For years we have been, in effect, blackmailed by the very highest earners threatening to move abroad if their extortionate incomes are threatened. What evidence is there that they would do this? After all, many of them already have their bank accounts elsewhere.
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schoolgatesmum
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Re: Cap to bankers salary

Postby schoolgatesmum » Tue Mar 05, 2013 1:59 pm

So you're saying that if there aren't massive bonuses all bankers will uproot and go somewhere else. Really?? Are they really all so brilliant that they are worth so much? Their brilliance isn't that obvious to most people at the moment.
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juliantenniscoach
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Re: Cap to bankers salary

Postby juliantenniscoach » Tue Mar 05, 2013 2:04 pm

I think if you read a couple of the posts which explain the dynamic that'll help. But the value in terms of GDP to the UK economy is obvious. Whether from a political belief point of view, you think that's in the country's interest, well that's a different matter.
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schoolgatesmum
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Re: Cap to bankers salary

Postby schoolgatesmum » Tue Mar 05, 2013 2:17 pm

I've read all the posts and I still don't get it. Surely if the bankers are paid less, the banks will make more profit and therefore pay more corporation tax? Except that Barclays have pretty much admitted that they've hardly paid any corporation tax and justify it by saying how much tax their employees make. You could make the same argument for nurses, teachers, doctors - have more and they will pay more tax into the system. And isn't there some astronomical figure of how much the government pays to insure against bank losses (and I'm talking billions - can't remember where I've read it now).
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BalhamMumWorkingFT
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Re: Cap to bankers salary

Postby BalhamMumWorkingFT » Tue Mar 05, 2013 3:25 pm

Bankers will leave the UK -- with their salary/bonus and their knowledge and skills. We'll end up with the crap bankers (so to say) and thats what we don't want. But I am not a banker (nor my hubby) so I can't be sure of the impact. I assume that the salary structure will change in order to keep the good ones. But in the end, that may mean less tax paid (again a bad thing).
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juliantenniscoach
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Re: Cap to bankers salary

Postby juliantenniscoach » Tue Mar 05, 2013 3:31 pm

There's no correlation between operating profit in one stand alone country and corperation tax paid. The controversy over Starbucks, Amazon, Apple etc shows that.
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NYE31
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Re: Cap to bankers salary

Postby NYE31 » Tue Mar 05, 2013 4:15 pm

The risk is that if bonuses are capped, then salaries will go up to compensate which makes it difficult to penalise bankers that do not deliver.

Currently London is the largest financial centre in Europe, despite all the off shore bank accounts etc, Bankers do contribute directly & indirectly to the UK economy & tax revenues which we so urgently need to resolve the deficit from the previous Government.

I'm not in favour of huge banker bonuses, especially at the moment in such difficult economic times but I don't see what can be done if we don't want to lose our financial hub status to elsewhere in Europe.
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schoolgatesmum
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Re: Cap to bankers salary

Postby schoolgatesmum » Tue Mar 05, 2013 4:37 pm

I still don't buy that all of these marvelous bankers will leave the UK if they don't get their extortionate salaries. Unless they are all bachelors I cannot believe that they would all up and leave with their families. And if they are all so marvelous why would some of them not deliver and need to be penalised? Maybe they could make room for people who want to live in the UK but would be happy to not earn quite so much. I am the first to admit that I know sod all about what bankers actually do (what do they do?!) but from what friends tell me, it's not that complicated. I mean it's not brain surgery is it?

(waits to be panned.....)
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dandelion53
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Re: Cap to bankers salary

Postby dandelion53 » Tue Mar 05, 2013 5:23 pm

Obviously not all bankers would immediately leave the UK. But its not just a short term, this year, thing. It would mean that going forward, banks in London would not be able to attract the highest quality graduates. In your early twenties you can consider moving to work in another city across the world if the salary is worth it. And international families move to London for the main wage earners career and they might not if the salary isn't competitive. And London based families might move to other cities for better salaries. And eventually global banks might stop investing as much in their London offices because they can't attract the best talent to work there and then London isn't a financial centre anymore. And a huge part of the UK economy is financial services so the last thing we want is for London to lose its status as a global banking centre.
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wasateacher
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Re: Cap to bankers salary

Postby wasateacher » Tue Mar 05, 2013 5:33 pm

Many of the brightest graduates opt for jobs with far lower salaries. What is the evidence that the city only recruits the brightest? How many of them have first class honours degrees?

This is the problem. We are fed the line that a) we need to pay them so much or they will leave b) that the whole economy is dependent on the City of London and c) that those who work in the City are the brightest and the best. However even supposing they were the brightest and the best, that doesn't imply that they are the most ethical. Surely, if the job is that attractive, they should be prepared to do it for very little. Perhaps then, they can sleep easy at night.
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dandelion53
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Re: Cap to bankers salary

Postby dandelion53 » Tue Mar 05, 2013 5:46 pm

I would like to rephrase what I said about 'highest quality graduates' to say 'the graduates with the best skills needed to work in banking'.

I agree that this doesn't mean that they are the brightest. I didn't say that. But in some areas it does require certain skills that not everyone has. And its not a job everyone wants to do either.

I don't work in banking but I've never understood it as a job that is so attractive that people would do it for the love of it! Like teaching or nursing... Isn't it the salary that attracts people in the first place?!!
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schoolgatesmum
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Re: Cap to bankers salary

Postby schoolgatesmum » Tue Mar 05, 2013 5:53 pm

Nope - still not convinced. A little memory jog here of how much we as taxpayers have bailed out the banks. Billions. There are so many industries where people are willing to work as interns (i.e. paid nothing) because they are such worthwhile professions. And these are top level graduates. Is money really the only driver for bankers? It doesn't seem to be the case for many many other professions.
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Mrs Contractor Mum
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Re: Cap to bankers salary

Postby Mrs Contractor Mum » Tue Mar 05, 2013 6:35 pm

Yes money or more bluntly profit is the only driver for bankers; making it, making more of it and earning it. Not all top graduates want to be a part of that scene. I'm more worried about the brain drain of future engineers, scientists, architects, teachers, doctors, medical staff, IT professionals etc
All we are going to end up with is a country dependant on the financial centre and billionaires from abroad wanting bases in London to educate their darlings at the top public schools creating even more earnings gap, unaffordable coffee, restaurants nevermind the cost of housing and the continuous blackmail that the country will fall apart without them and all policy must be in their favour.
The country survived the end of manufacturing, the services industry, the dotcom bubble and it will recover from a perceived brain drain from the financial sector.
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livegreen
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Re: Cap to bankers salary

Postby livegreen » Tue Mar 05, 2013 6:40 pm

This would be a major issue if London made a unilateral decision to do this and no other nation followed.
However, this is proposed to be a European wide ruling (with Switzerland also proposing their own tighter rules about salaries, bonuses etc) and therefore it is unlikely to be a mass exodus of "*ankers" leaving as their options would be limited. New York, Tokyo, Singapore and China do stand to benefit, however not everyone would see these as good choices to move their families etc and these cities have there own issues with tax, bonus culture etc and may actually impose a similar limit or tax.

Do not think this will be/is an issue to worry about as most current bonuses are paid in shares, share options etc and the days of large "cash" bonuses have gone. All "*ankers" I know have had their basic salaries increased significantly in preparation since 2008.
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schoolgatesmum
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Re: Cap to bankers salary

Postby schoolgatesmum » Tue Mar 05, 2013 8:25 pm

So if the bonuses are paid in shares or share options how are they taxed? Presumably if you sell your shares you pay capital gains tax (way less than income tax)? So where is all this tax that everyone keeps saying the bankers are contributing to the UK?
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