Bailed-out banks pay out billions in bonuses
Feb 8th, 2009 by Jamie Bradley
Over £4 billion of taxpayers’ money is set to be reinvested by the banks, but probably not in a way that you would expect or hope, especially considering the current financial climate.
Instead of using these funds to offer obtainable credit to those denied by cautious banks, the money is being used to offer bonuses to staff, despite 2008 overseeing a financial failure for the banking industry.
Many of these banks and building societies who are offering these payouts have been either fully or partially nationalised through government intervention.
Many people objected to the banks being bailed-out in the first place, but were forced to sit back and watch their hard earned money being ploughed into these risk taking banks through taxations.
However, taxpayers have yet to be repaid for their loyalty, while staff working for banks, which almost brought the country to a financial stand still, are reaping the rewards through massive bonuses.
Many of us who have contributed to these payouts have since been made redundant due to financial insecurities that have befallen our employers. Yet, those who have overseen this economic downfall will be rewarded with thousands in taxation generated bonus payouts.
If workers up and down the country can have their contracts ripped up, how is it justifiable that the needless risk takers that are UK banks are protected by such a fate and are not only rewarded with bail-out subsidies, but are smeared with unwarranted bonuses that could have been otherwise used to save industries that were forced to reduce staff?
Although a large proportion of bankers may argue that the subsequent failures of their respective employers was independent of their efforts, perhaps they should consider themselves fortunate that they had no occupational affiliation with those 30,000 who lost their jobs working for Woolworths and accept job security as a sufficient bonus for a year ridden by financial insecurity.
Barclays announced, yesterday, annual profits of £6.08 billion for 2008, of which £2.3 billion will be paid out in bonuses. Royal Bank of Scotland, by contrast, recorded record annual losses, which amounted to £28 billion. Despite this setback, RBS is still poised to pay a proportion of the £1.4 billion in bonuses; the total amount accumulated by themselves, Lloyds TSB and Northern Rock.
However, if the banks continue their pursuit of a bonus payout culture, then they can only expect to be greeted with a consequential financial conundrum that will put pay to their get-rich-quick scheme.
Without taxpayer support, these banks would not even exist, let alone have the financial clout to undermine the economical system and offer unwarranted payouts to occupationally secure staff.
So, with less money being invested into the economy and unemployment figures rising, who will subsidise the banks when they need bailing out in the future due to careless lending and excessive bonus payouts?
By Jamie Bradley
