View more on these topics

Bank bailout could have been dodged if bonuses 20 per cent lower

The Bank of England said the Government bailout of the banks could have been avoided if bonuses and dividends had been reduced by as little as a fifth.

In its Financial Stability Report released today, the BoE said British banks could have saved up £75bn of capital between 2000 and 2008 by showing restraint on bonuses and dividends.

The BoE said that distributions in the future need to be “materially lower”.

It said: “If discretionary distributions had been 20 per cent lower per year between 2000 and 2008, banks would have generated around £75bn of additional capital – more than provided by the public sector during the crisis.”


End arbitrage between corporate pensions, says Friends

Friends Provident has welcomed the introduction of consultancy charging in the corporate pensions market but is calling on the FSA to take further action to remove significant differences between occupational and contract-based schemes.

Lifetime ISAs – International Evidence

By Fiona Tait, Pensions Specialist Since the announcement in March, the Lifetime ISA (LISA) has attracted controversy. Heralded as a saviour for the self-employed and the young wanting to get on the housing ladder, the new LISA risks adding confusion for savers trying to fully understand the benefits of new workplace pension savings through auto-enrolment. To […]


News and expert analysis straight to your inbox

Sign up


There are 7 comments at the moment, we would love to hear your opinion too.

  1. Banks have been taken hostage by reckless bankers and turned into private profiteering vehicles for the benefit of their employees.

    Now banks attempt to do the same for entire economies.

    This is an intolerable situation. Banks must be regulated more heavily, and if any of the robber barons leave the country in protest, all the better.

  2. If if if … if capital regulations had been tighter … if risk had been better quantified … if rating agencies were “better” … if if if …

  3. But that would mean that banks would have to behave responsibily… Forget that… Thats never gonna happen

  4. What a ridiculous comment to make. “If banks hadn’t paid so much in bonuses….”

    Who’s to say they wouldn’t have spent it on something else? By paying so much in bonuses they were able to generate more capital and income and also pay the huge taxes that are levied on companies under this government. By paying SO much back into the system, BOE employees are able to be paid the vast salaries they are and their houses were worth the money they were. If only the BOE had understood more about the US banking system, it could’ve put more pressure on UK banks to take a more careful look about what the ‘assets’ they were buying

  5. I love these reports they are as one of the previous writers says “if if if.” All that is actually needed is for each person to take responsibility for their decisions AND to take subsequent responsibility for the consequences of their decisions. now if everyone did that including the FSA, the Governement, MPS etc there would have been no banking crisis, no MPS expenses crisis, no massive government overspend etc etc

  6. Dermot Brannigan, your comments are silly. Banks got bailed out by the tune of billions, worldwide by trillions. Add to this the ongoing QE and artificially low interests fuelling carry-on trades. If you add all this together banks never had and never have paid the equivalent of taxes. Banks are at best capital destroyers, NOT creators!

  7. Separate Casino banking from current account banking, so the government doesn’t need to bail the banks out or…

    If banks want to rely on a bailout (insurance policy) in the future, they should collectively pay the government a bailout insurance premium of around £7 billion a year. (which is only equivalent to 20% of the bonuses they pay each year. Peanuts to them).

    Speaking of which, you don’t hear much about how we, the public, are going to be repaid when RBS and the like pay back the government with interest in 5 or 6 years time.

    We will undoubtedly have to pay higher taxes to replace ‘our money’ now, but and when the banks pay back this missing money plus interest, won’t the government have been paid twice ?

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm