Sir, – Your letters page has of late contained many individual comments on bankers and bonuses, and rightly so. This is an important issue. I should like to suggest that not only is the Irish limit of €20,000 currently appropriate for this country’s special circumstances, but that it could profitably be adopted as a permanent worldwide standard.
Commercial banking is essentially a public utility. We need banks to facilitate payments among ourselves and to allocate credit to our more promising enterprises and prudent consumers.
As a business, if conducted well, banking is boring and adequately – but not exceptionally – profitable. Bank income can of course vary considerably. Our own banks are currently emerging from a period of very thin profits with forecasts for dramatic improvement in future years – but this will be due entirely to a changed interest rate environment over which bank management has no control or even influence (although this is unlikely to keep managers from taking credit for it). Major changes in income levels will almost always be the result of such external factors.
Perhaps only because good banking is boring, bankers seem unable to resist from time to time what they perceive as opportunities to spin straw into gold. Our own property development catastrophe is a perfect example, but it was just the latest in a long series that included, for example, the “discovery” that sovereign debt was virtually risk-free (obviously, it wasn’t: nothing is). The existence of substantial bonuses within banking encourages the search for exciting “straw into gold” opportunities.
Banking would serve us all better if bank management accepted that it should be boring and that their job is to keep the ship steady, not to win transatlantic races. Restricting bonuses to relatively modest amounts can only help create such an atmosphere within banking. – Yours, etc,
Sir, – Given that the Cabinet has approved plans to ease restrictions on pay bonsuses of up to €20,000 for bank staff perhaps they might do something similar for teachers?
I’m not calling for the inclusion of other non-pay benefits like childcare costs, private health insurance and company cars, although they would be very welcome too. A €20,000 bonus would immediately solve the current recruitment and retention teaching crisis. The same could be done for the Defence Forces and nurses. Most importantly it will not lead to a group of people becoming so reckless that they will bankrupt a country. – Yours, etc,
Sir, – The bankers have their generous pay and conditions dealt with personally by the Minister for Finance.
Everybody else has to engage in months of arm wresting down at the Workplace Relations Commission.
Warped priorities? – Yours, etc,
RORY E MacFLYNN,
A chara, – Much always wants more. – Is mise,