Bank behaviour harming capitalism, says IoD

[superfrank]

http://www.bbc.co.uk/news/business-21775429

even the head of the IoD can't bring himself to support the leeches.

"They are harming the whole of British business by focusing only on their own short-term self-interest."

[switesh]

"They are harming the whole of British business by focusing only on their own short-term self-interest."

Just another case of the Agency problem.

Soros says "the agents must have 'skin in the game'"

Here's the bit that puzzles me:
Let's say, that the top employees were paid smaller wages, no bonuses, and had greater than 60% of their remuneration in common stock (no warrants or preferreds either).
So now they have 'skin in the game' - but that could easily lead them to make short-term decisions (cook the books, insider trading, over-leverage, reveal incomplete, or deliberately delayed, or mis-leading information etc) to boost equity (and hence their remuneration). And thus over-look sound decision policies to generate sustainable long-term returns.

Almost seems like any possible solution does come with strings attached.

[rubysglory]

Legislate on remuneration multiples across the board - if executives get a 20% bonus so do all those on the ground floor. If there is not enough money in the pot, bad luck, no bonus or a smaller relative bonus.

rg