Public Rage, Weak Ministers and Bankers in Denial Over a Criminally Irresponsible Bonus System [Edition 2]
Daily Mail › February 10, 2009
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Summary
THE FEROCIOUS debate about the dire consequences of the bonus culture in British finance will reach a climax today when the former bosses of the Royal Bank of Scotland and Halifax Bank of Scotland come face-to-face with the House of Commons Treasury Select Committee.
Sir Fred Goodwin, of RBS, and Andy Hornby, of HBOS, will be asked to justify why the two banks threw caution to the wind and went hell- for-leather for growth, long after it became clear that Britain's ten-year economic boom was coming to a shuddering halt.See the full content of this document
Extract
Public Rage, Weak Ministers and Bankers in Denial Over a Criminally Irresponsible Bonus System [Edition 2]
It is plain that one of the main factors driving the banks' disastrous expansion -- from the branch level up to the boardroom -- was a lunatic staff incentive structure which paid little attention to the risks the banks were undertaking.
The more revenues and profits that the bank could generate in the short-term -- whatever the quality of the loans originated -- the higher th...See the full content of this document
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