With a PoliticsHome poll showing that 48% of those polled believe that the return of profits for banks is a bad thing whilst 86% of those polled feel that the return of big bankers bonuses is a negative development, it is hardly promising to see the FSA chief say that it is not in the FSA's remit to control individual bankers bonuses. This is said, despite the fact they are the regulators. Hector Sants says that instead it is up to "politicians and society as a whole" to control individual bonuses. Remarks such as this just further demonstrates the lack of accountability the banking and regulatory system has, with key figures passing the buck, unable to accept responsibility.
This links to my recent blog post around the systemic ways banking regulation works, and what each of the three main parties advocate to improve it. There needs to be more clear accountability in the regulatory system, but the Tories are wrong to say that the regulatory duty should be cast all towards the Bank of England. Instead, we need to make sure that the FSA chief knows more about his and the institutions role as a regulator, and so that the tripartite system, amongst other things, is changed to make the banking system work better. The concerns by the public around the size of bonuses again links to one of my recent blogs, as it shows further evidence for my criticism of an article in The Independent, which claimed that the size of bonuses does not matter. This is because, the increasing size of bonuses just plays on the fears of the public, that it really is just 'business as usual'.
The political poll also shows that overall, despite a few Tory free marketers, all three main political parties believe that the government have been too weak in their response to the banks. That is worrying for Labour, as a big majority of Labour supporters are included within this view. I have to agree with the majority of those polled, as the government should have been stronger in terms of making sure the excessive risk culture did not return so that we did not see the signs of 'business as usual', which we are seeing. They should have temporary nationalised the banks and controlled lending that way, then once lending was restored to a steady and sustainable level, privatised them. Nevertheless, what is done is done, and there needs to be more forceful legislation to control the way banking and bonuses are done, so that we see more faith in the economic system and that the signs of 'business as usual' recedes.
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