Banks, bonuses and blame!
Are we really a country of bank-bashers? Is the government doing enough to restrain bonus-mad bankers? Robert Powell hits the streets to find out...
Rob Powell hits the streets to get your views on banks, bonuses and the blame game.
Reporting season has just begun and banks are unveiling big profits as well as big bonuses.
But while huge pay packets may be good news for some, they won’t do the banking sector’s public image any good. But do we really hate our banks as much as the media seems to suggest?
I’ve hit the streets to find out...
What’s the best thing about your bank?
Most people I’ve spoken to today certainly don’t hate their bank, but they still wouldn’t recommend it to a friend.
And if new research is to be believed, this is a nationwide trend; over 10 million bank customers cannot find a single reason to recommend their bank to someone else.
The figures from Triodos Bank show that the main reason for this banking grief is bad customer service – with 38% of those who said they wouldn’t recommend their bank citing poor service as the reason.
29% of people went one step further and said they wouldn’t refer a friend because their bank didn’t treat them as an individual.
What do you think about when choosing a bank?
According to the stats from Triodos, one in five people will opt for a bank near to where they work or live at the time of choosing. While 19% will simply choose a bank that has lots of branches.
Despite customer service being a main cause of dissatisfaction for the banking public, many do not actually consider this when choosing a bank in the first place.
In fact, only 6% of the people surveyed chose their bank based on its customer service.
Are bankers paid too much?
Bankers pay and bonuses are a controversial topic; 37% of the people who said they wouldn’t recommend their bank said the banks’ excessive pay and bonuses was the main reason why.
But it’s these huge pay packets that the government is attempting to crack down on through their Project Merlin banking agreement.
The agreement includes RBS, HSBC, Lloyds and Barclays and states that bonuses will be in total lower than last year and solely based on performance.
The banks must also disclose the pay of their five highest paid executives below board level. But this will exclude top-earning traders who do not have managerial responsibility.
It’s also important to remember that most of the bankers receiving these hefty bonuses will be the traders and executives working in the bank’s investment arm – not the staff you’ll see when you pop down your local branch.
Do the banks get an unfairly hard time?
Most of the people I’ve spoken to today think that banks deserve to be scrutinised but still don’t think the government are doing enough to clip the wings of the banks after the disaster that was the credit crunch.
The Treasury have increased their levy on bank profits to £2.5bn this year –raising an extra £800m.
And the Project Merlin agreement will see banks make £190bn of credit available to businesses in 2011 – with £76bn specifically earmarked for smaller businesses.
The problem the government has is if they get too tough on the banks –they may just pack up leave, taking their billions of pounds of tax payments and thousands of jobs with them.
So while many of us may claim to hate banks – it’s probably more a case of can’t live with them, but definitely can’t live without them.
More: How David Cameron secretly keeps tabs on your money | It’s time we benefitted from massive bank profits!
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A very interesting read, I think Im in the wrong job!
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Surely if there was efficient competition between competing banks, etc., they wouldn't be making such obscene profits whilst charging huge interest rates to borrowers, if they lend to them at all, and paying miserly rates of interest to savers. I think that's the main gripe people have: [b]the *only* reason banks pay such huge salaries, have such ridiculous bonuses, make such massive profits and pay so little tax is because unlike the rest of us they are in the business of working with money (rather than people's health, disorder, computers, pupils, etc.), so they can. [/b] The rest of us work just as hard, just as many hours, on jobs that require just as much skill/training/experience, yet take home "normal" salaries (i.e. a twentieth or less of what bankers take home).
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There is a serious discussion required regarding banking in the UK, however, few people or reporters appear to be willing to look at it without hyperbole or miss-information. I'm no fan of how the UK banking industry has conducted itself and I believe that the ridiculous amount of risk taken in the past by said banks need to be curtailed. There is a trade off in that people/business'/government need to accept that the low interest rates and level of money they borrowed was a fools paradise and adjust to a new reality - you can't have it both ways (If you can't afford the house you want or your business can't sustain itself without constant life support then you should not get the house and your company should be allowed to fail). I've no real comment on bonuses as it is a non issue and over-hyped so that people can obsess over it without worrying about capital requirements, effective regulation, global competition, inflation, trade balances and all the other boring and complex/interconnected considerations that are actually important. I love the fact that a few senior bankers/traders are the only ones that caused all the problems. Governments did not borrow ridiculous amount so that they could pander to their voters and not confront unrealistic public spend; public did not over borrow to buy overpriced property and live beyond their means; companies did not borrow money to expand recklessness or maintain a failing business model. I have to admit that the only part of the article that really annoyed me, rather than simply shake my head, was the agreement to make £190bn available - credit should only be made available based on the risks and be rejected if the risk is too great. The more I read in the press the more I see that people have already forgotten that our current issues, which were over a decade in the making, were caused by debt and the unwillingness to address this addiction - this always seems to be something that we should deal with at some later point or by someone else.
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24 August 2011