The 50-per cent bankers' bonus levy is a nasty, unworkable piece of policy targeting a specific group, yet, it is entirely understandable in the current climate, says CNN's London correspondent Richard Quest, in his exclusive column for domain-b.
It doesn't matter whether we call it justice, revenge, or simply payback, the process of reminding bankers that they owe the rest of us has begun.
It started in the UK when the Chancellor the Exchequer Alistair Darling announced banks would have to pay a 50-per cent one-off levy on any bonuses paid in excess of $40,000.
France is also ready to announce similar proposals. The German Chancellor Angela Merkel calls this a ''charming idea.'' Even The US, which has declined to follow suit, has its Pay Czar hacking away at fat cats' pay.
The financial world is obviously up in arms about this. They criticise the proposals for being unworkable, unfair and discriminatory. They are right. The proposals are all of these things and worse. But the bankers have no-one to blame but themselves. They are the ones that very quickly forgot the debt they owed the rest of us for bailing them out. In his proposals for the future, Gordon Brown, describes this as the ''balance of risks, rewards and responsibility between society and the financial sector."
I am straining not to join in the populist cry of ''string 'em all up,'' ''a plague on all their houses'' and so on. It is too easy to bash a banker these days. What I find worrying is the banks' management that seemingly has no conception of how to behave in these difficult times.
The starting point has to be why we bailed out the banks. Let them never forget we didn't do it because we like them or felt it was the right thing to do. We bailed out the banks because we needed them, pure and simple. They are the backbone of global and national economies. We witnessed the human distress when Northern Rock went under, saw the personal problems when the Icelandic banks froze over and we felt the system's seismic shocks when Lehman Brothers went under. Now, imagine how awful it would have been if Citigroup or Barclays had gone down?
Today, because of a roaring stock market, an abundance of cheap money and low interest rates, the banks are raking it in and ready to pay big bonuses. It is here that there has been a failure of leadership at the top.
CEOs and chairmen should have been prepared to tell their bankers: "Not This Year". They should have reminded them they will always earn more than the rest of society. Not this year; that their generous bonus pools will return in the years ahead. Not this year; Ultimately that happy days may be here again. Not this year.
The fundamental argument against ''Not this year'' is that the bankers will up, walk away and go elsewhere. To this bit of banker's blackmail the chiefs should have been prepared to say: Go. It is that ignorance or contempt for society's pain which needs to be rooted out of the financial system (which incidentally, is where business schools could start playing their role. Let's try teaching a bit more about ethics and their role in society as well as derivatives and bond yields!)
Goldman Sachs' plan to pay its top 30 executives bonuses in shares not cash is a move in the right direction. But why is it not being implemented across 400 partners? And why does it take a public outcry and furor for a bank to do the right thing?
The 50-per cent bankers' bonus levy is a nasty, unworkable piece of policy targeting a specific group of people - something that tax law is not supposed to. Yet, it is entirely understandable in the current climate. Having failed to show moral leadership, the bankers can hardly complain when politicians do it for them (albeit with their own self-serving electoral interests to the fore.)
My point is the CEOs shouldn't be refusing to pay bonuses as some PR stunt, or they are frightened of the public backlash: They shouldn't be paying big bonuses this year because it is the right thing to do. They should have the backbone to look their star performers in the eye and say firmly: ''Not this year.''
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Richard Quest is a CNN correspondent based in London, host of the weekday one-hour program ''Quest Means Business''. For program highlights and more, go to www.cnn.com/qmb