As the financial year end draws to a close, the bonus payout plans of the world's largest banks are coming under the spotlight again, and governments will likely criticise banks that make excessive payouts.
SCMP, January 9
It was hardly a prediction. Only one day earlier British Prime Minister David Cameron let loose on a rant about excessive compensation packages that 'made people's blood boil'.
The interesting thing about this is that he also said it was not up to government to determine executive pay.
Oh, really, Mr Cameron? I can give you three good reasons why government has a great deal to do with it in Britain. These three reasons are named Royal Bank of Scotland, Lloyd's Banking Group and Northern Rock. The British government has poured a huge fortune into helping all three escape their comeuppance for engaging in silly risks.
The message to British depositors is clear - don't worry about the safety of your deposits. Your government has guaranteed them. You need no longer take any precautions about guaranteeing your money. You are free to go to whatever bank pays you the highest deposit return and never lose a minute's sleep again that this bank may take unwarranted risks with your money.
The message to bankers is equally clear - go ahead and take unwarranted risks with your depositors' money. We have guaranteed these deposits and you never need lose a minute's sleep again that your depositors will take their deposits away from you because they are scared of what you are doing with their money. With our guarantee in hand they no longer care.