Diavolo Rosso wrote:I think it's a much more complicated issue than most people think, and I can't say I have one simple suggestion. These have been mentioned in various forms but my suggestions would be:

-> there needs to be a cap on bonuses in IB. I have no issue whatsoever with what most people would deem "excessive" bonuses of £1m pa+ because ultimately there are people working in Banks who directly generate £30/40m+ worth of profit a year. I've got no issue with being rewarded for that but we need to find a way to structure it so there is a natural limit to bonuses, such that it's not just about how much money you make.
-> Banks should employ more women in management positions. It's in no way a coincidence for me that most of the women who work on my trading floor are very attractive and in PA or Sales roles. I doubt the correlation between being very attractive and very intelligent is that much different from the correlation between offensively ugly and highly intelligent. This is an issue for the private sector in general, but it could have much bigger effect in Banking due to the macho culture which although vastly exaggerated in the general press, does exist.
-> just as there has been an industry wide review of the role of rating agencies, there needs to be a review of the major client surveys, eg. the Euromoney FX Survey. Regulators should repurpose these and link them to bonus payouts IMO.
-> we need to find a hybrid ownership structure. It can't be a coincidence IMO that Banking culture changed from being client focused as the Partnership structure faded out to be replaced by one of public listing. The best way to implement a client focus has to be to ensure senior management are completely tied in to the future of the company.
-> Banks should have to explain to any non Financial Institution client how they are making profit from any trade and give scenario analysis of what can go wrong. You can explain the structure clearly of even the most complicated instrument, but it's only when you know how a trader or structurer is making money from it that you really get what the risks are and whether it's a suitable investment.

For me society needs to stop focusing so much on what bonus Bankers get paid and concentrate on what they have contributed to society to earn them. What certainly doesn't help is the various unwashed hippies, trust fund warriors and Occupy smackheads who we regularly get parading around the City, nor the wailing reporting from the press. It all distracts from meaningful debate.

Diavolo Rosso wrote:I think it's a much more complicated issue than most people think, and I can't say I have one simple suggestion. These have been mentioned in various forms but my suggestions would be:

-> there needs to be a cap on bonuses in IB. I have no issue whatsoever with what most people would deem "excessive" bonuses of £1m pa+ because ultimately there are people working in Banks who directly generate £30/40m+ worth of profit a year. I've got no issue with being rewarded for that but we need to find a way to structure it so there is a natural limit to bonuses, such that it's not just about how much money you make.
-> Banks should employ more women in management positions. It's in no way a coincidence for me that most of the women who work on my trading floor are very attractive and in PA or Sales roles. I doubt the correlation between being very attractive and very intelligent is that much different from the correlation between offensively ugly and highly intelligent. This is an issue for the private sector in general, but it could have much bigger effect in Banking due to the macho culture which although vastly exaggerated in the general press, does exist.
-> just as there has been an industry wide review of the role of rating agencies, there needs to be a review of the major client surveys, eg. the Euromoney FX Survey. Regulators should repurpose these and link them to bonus payouts IMO.
-> we need to find a hybrid ownership structure. It can't be a coincidence IMO that Banking culture changed from being client focused as the Partnership structure faded out to be replaced by one of public listing. The best way to implement a client focus has to be to ensure senior management are completely tied in to the future of the company.
-> Banks should have to explain to any non Financial Institution client how they are making profit from any trade and give scenario analysis of what can go wrong. You can explain the structure clearly of even the most complicated instrument, but it's only when you know how a trader or structurer is making money from it that you really get what the risks are and whether it's a suitable investment.

For me society needs to stop focusing so much on what bonus Bankers get paid and concentrate on what they have contributed to society to earn them. What certainly doesn't help is the various unwashed hippies, trust fund warriors and Occupy smackheads who we regularly get parading around the City, nor the wailing reporting from the press. It all distracts from meaningful debate.