Lincoln Book Festival

Lincoln Book Festival
2017 Festival Programme

Wednesday, 20 May 2009

So, it was bonuses

I always remember a client years go who paid commission on the orders a salesman took. This was subsequently changed to giving commission on those orders which became actual sales delivered and paid in full.

The argument being made is that bonuses were paid when traders made money but no account was taken of risk. Well, the story would seem to be that when the traders made money, so did the banks and so did their shareholders. Without taking a risk none of it would have happened. So, does that make a risk OK?

Well, we can think of the RBS shareholders who received growing dividends and the value of whose shares rose dramatically for a long time. This was the upside of risk. The downside was when everything collapsed.

I'm not sure I understand what is proposed for the future. No risk, no bonus, dull dividends?

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