The EU's 'banking package' that constructs an 'incomes policy' for financial institutions (approved by MEPs April 16) is not the solution to a financial crisis that was caused by central bankers and politicians, argues UKIP Economy spokesman Godfrey Bloom MEP.
•Everyone hates bankers. They also hate journalists, politicians, and estate agents. I cannot bear football managers, sharp suited, gum chewing, inarticulate, overpaid morons. We all hate somebody, everyone thinks most people are overpaid except nurses and themselves.
But is that a reason for the EU to construct an incomes policy? In breach of Article 153(5) of their own miserable treaty, I know Monsieur Barnier is putting his lawyers to work to circumnavigate it.
Bonuses are not the problem. It is the banking system. Fractional reserve banking which means banks can lend money they do not have sponsored by central banks, controlled by politicians and underwritten by the hapless taxpayer.
This banking system was illegal in mid 19th century America, indeed those perpetrating it were subject to capital punishment, never mind cutting their bonuses, let’s hang a few, pours encourager les autres. I was in London, broadcasting with Ken Livingstone on Saturday, not a natural political bed fellow, but we both agreed hanging a banker once a week would be good for the national soul. But mark this, and mark it well we should start with the central bankers.
The root cause of the 2007/8 crisis was central bank support for failed banks. They bought the ‘too big to fail’ story, in all its hypocritical absurdity. My old investment colleagues in the City could not believe their luck when the Irish Government bailed out their mal-investments in Irish bank bonds with 100 cents to the Euro. They thought it was Christmas! They went to bed having taken a significant haircut on the bond portfolios to wake up next day and find all was well. The Irish girl on the checkout till, the Dublin cab driver and the local O’Flaherty’s barman and pot boy would pick up the tab. Of course Ireland did not have the money so the whole country is broke. Then the politicians have the immortal crust to bay for the blood of the bankers. So Ken, we must also hang a politician a week (me last please) because they are equally culpable.
Remuneration of bankers is the remit of the banks' shareholders and no one else. If the government owns the bank they must call the tune. All retail bankers are overpaid and have been for years, but the City is not retail banks. The City is investment companies, international accounting, actuarial and insurance and a host of other related organizations with their own highly specialized skill sets, the market must decide.
Where perhaps a form of incomes policy might be acceptable is in the public sector. Why do EU civil servants pay no significant income tax? Why is the head of BBC TV paid over £400,000 per year for showing repeats? (Christmas Eve 2012, BBC, 23 programmes, 21 repeats). Why are the muppets in charge of the Town Hall or local NHS Trust paid hundreds of thousands of pounds per year for permanent failure? Why do footballers get paid £10,000 per week? How can pop stars become fabulously wealthy and can’t sing for toffee? Is there a god? Who is Sylvia, what is she? Roll on the weekend.