Well, if we’re in a Swiftian mood…maybe if Darling had made all the senior people re-apply for their jobs, at 10% less pay, the ones who think they can bog off elsewhere would go, the ones who failed to justify being reselected would be sacked, and in either case the ambitious juniors who fancy a stonking pay rise would replace them.

In the case of all banks with meaningful UK retail deposits (which basically means the British banks and Santander) – their investment banks should be separated from retail banks. The investment banks can then be allowed to fail if they screw up. This is effectively what Mervyn King, the BOE governor, is already proposing.

As for Goldman Sachs, JP Morgan, Deutsche Bank etc, it is their governments who will have to bail them out if they fail so is their problem and not ours.

It is time to be smart about this and not emotional and self-defeating. The swiss are welcoming our bankers and hedgies with open arms and their economy is booming. They know they aren’t any more exposed to these bankers than they were anyway – but they now get to receive their tax revenues.

The independent this morning seemse to capture it well :-
http://www.independent.co.uk/opinion/commentators/john-rentoul/john-rentoul-labour-is-unelectable-again-1839320.html

Genius OP.

Ooooh, yes, I like this!

As long as we extend it a little to all who piss away the publics’ money. That £2 billion Olympics which is currently at £12 billion and rising. That NHS computer system that will swallow £20 billion before it’s done.

So far that’s only the Cabinet’s Cambrai but we should be able to get it up to the public sector Passchendale without too much investigation.

Oh but if you start shooting our wealth creators you’ll make British banking uncompetitive. All the top talent will just piss off overseas where they can take enormous risk without getting shot, you’ll see!

We could look on all these emigrant bankers as a fifth column deployed to destroy every other world economy.

@2, the last crisis had ABSOLUTELY NOTHING TO DO with the lack of distinction between i-banking and commercial/retail banking. None of the UK’s banks failed because of i-banking losses: all except RBS failed because they were reliant on volatile wholesale funding for retail and commercial loans; and RBS failed because it was reliant on wholesale funding for the enormous leveraged buy-out it had just done of ABN.

The lesson, fairly obviously, is that banks shouldn’t be reliant on wholesale funding against long-term liabilities. Which has absolutely no bearing on whether they underwrite share issues, help companies raise money on stock and bond markets, or run trading desks.

“is that banks shouldn’t be reliant on wholesale funding against long-term liabilities.”

Not quite. No problem if they issue 30 year bonds. It’s “short term” wholesale financing …..

Tim, I’m a reasonable man, willing to compromise.

I’ll accept public sector Passchendale if you’ll accept private sector Somme.

Reasonable Men know that the solution to present problems is a restructuring of incentives. Seems reasonable, therefore, to ensure we don’t end up with an Incentives Apartheid.

Bullets for all!

“I’ll accept public sector Passchendale if you’ll accept private sector Somme.”

Not quite:

“I’ll accept public sector Passchendale if you’ll accept banking sector Somme.” was the original suggestions.

As I’m neither a banker nor in the public sector I’m quite happy with that second formulation….

Aw, come on – haven’t they got enough of a messiah complex?

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece

‘Let’s be honest – the only people who have a hope of really understanding banking are the bankers.’

The only people who really understand medicine are doctors but most of us recognise Harold Shipman was a wrong ‘un.

I’m against the death penalty on principle. Kneecapping’s another matter. We have paramilitaries who’s skills are going to waste.

I believe a similar policy has been used to deter corruption amongst top companies in China. We should see how successful it has been.

But why not instead look at why we are forced to invest in these bankers crazy schemes in the first place? I think we will find it is because the fiat currencies that ordinary people are forced to use do not act as a stable store of wealth, basically forcing us to invest in this casino corporatism. Besides the lack of more reputable organisations like mutuals (which banking regulation have almost extinguished).

@13 err, it was banking *de*regulation that extinguished mutuals. Once people realised that instead of all being shareholders together in the building society, they could get a fat wodge of cash for selling the building society to an evil bank, they fell over themselves to take the windfalls.

“Abusive, sarcastic or silly comments may be deleted.”

Does this include OP?

I’m an ex-investment banker and my wife is still an investment banker. Come and get us ladies.

I remember one of the “Stop the City” mini-riots broke into the LIFFE exchange in the 90s, a few dozen unwashed types managed to make it on to the exchange floor. I think they expected to meet a load of pin-striped Tarquins. Instead they met Gary, Wayne and their mates. The unwashed got such a hammering I think they were happy to run into the arms of the police as the Essex boys literally kicked them out of the building.

Same a few years later when a load of swampies invaded the International Petroleum Exchange, London Times story:

When 35 Greenpeace protesters stormed the International Petroleum Exchange yesterday, they had planned the operation in great detail.

What they were not prepared for was the post-prandial aggression of oil traders who kicked and punched them back on to the pavement.

“We bit off more than we could chew. They were just Cockney barrow boy spivs. Total thugs,one protester said, rubbing his bruised skull. “I’ve never seen anyone less amenable to listening to our point of view.

Another said: “I took on a Texan Swat team at Esso last year and they were angels compared with this lot. Behind him, on the balcony of the pub opposite the IPE, a bleary-eyed trader, pint in hand, yelled: “Sod off, Swampy.”

Do any of you girls actually know how to handle a gun?

@16 Wow, that’s at least the second time I’ve seen you tell that story. One thing does stick with me though. I do remember being impressed by how big your penis was that first time too. Truly humongous.

And you’re friends too, they must all have huge wangs.

Anyway, “climate activists not very good at fighting” is about as exciting a story as “city traders can sometimes act like bellends.” I wouldn’t worry about winning the Pulitzer any time soon.

Guido: “I’m an ex-investment banker.”

Nope, still not really seeing the downside to my plan.

In all seriousness – or at least, as serious as anything’s going to get beneath this post – the point wouldn’t in fact be to assassinate a bunch of Fred Goodwins (although that would be fun). It’s a deterrant.

At the moment there just aren’t enough incentives for bank bosses to keep an eye on their underlyings. The upside of letting them take huge risks that pay out nine years out of ten is not cancelled out by the downside of an occasional implosion. Not least because the government keeps bailing them out.

Throwing the odd bullet into the mix would do a lot to remove that moral hazard, I think.

Also, I’m not envisioning a stampeding mob of lefty activists. This would be strictly government sponsored violence.

@14:

That was an epiphenomen of much older regulation that had previously extinguished any new mutuals from coming into existence and thriving. See Phil Booth on this: http://conservativehome.blogs.com/platform/2009/12/philip-booth.html

Guido Fool “I remember one of the “Stop the City” mini-riots broke into the LIFFE exchange in the 90s, a few dozen unwashed types managed to make it on to the exchange floor. I think they expected to meet a load of pin-striped Tarquins. Instead they met Gary, Wayne and their mates. The unwashed got such a hammering I think they were happy to run into the arms of the police as the Essex boys literally kicked them out of the building.”

Dear Penthouse, I was siiting at the railway station one day and a blonde lady sat down next to me and asked me if I wanted to fuck………….It all seemes just a dream.

Worth reading (Nobel laureate) Joe Stiglitz on regulating banking in this Sunday’s Observer:
http://www.guardian.co.uk/commentisfree/2009/dec/13/mervyn-king-banks-curbed

Guido, if you’re that hard, try taking on squaddies instead of swampies.

I always thought Guido was delusional, now it turns out he is a fantasist as well.

Regulation won’t work. Regulators are dozy creatures, and bankers will find ways around them.

I have a very simple proposal. Banks expect the taxpayer to bail them out in the event their liabilities go pear-shaped. So let them pay an insurance premium to the government, geared to the amount of liabilities, in order to fund bail-outs.

Of course, banks will try to hide their liabilities offshore to avoid paying the premium. So keep them honest, make it a criminal offence to understate the liabilities. If a bank does hide its liabilities, and is then exposed when things go bad, we will at least have the satisfaction of sending its directors to prison. The sight of a few of their friends behind bars would have a salutory effect on other bankers.

I’m an ex-investment banker and my wife is still an investment banker. Come and get us ladies.

I remember the last time they did during the G20 protests. These people shut the whole place down they were so scared.

Here is a picture of me looking less than terrified.

http://order-order.com/2009/04/01/view-from-above/

@ 25 er actually the bankers were taunting them, waving £20 notes at the great unwashed below, along with tradional exhortations to get a bath, a haircut and a job.

@ 25 er actually the bankers were taunting them, waving £20 notes at the great unwashed below, along with tradional exhortations to get a bath, a haircut and a job.

What, and look like them? Poncy Brownshirts. No thanks.

Here is a picture of me looking less than terrified.

Amazing, Guido. I always assumed this was you and your mates…

http://bit.ly/5b7JFP

I thought you might be the dashing rake holding the Hayek.

The yog has a picture of the gun totin’ hardman:
http://www.chickyog.net/wp-content/uploads/2008/08/guido_fawkes_paul_staines.jpg

@26

Are you pissed again Paul? Or have you mutated from a lardy-arsed, narcissistic, self-publicist and twat into a cigar? The depressing thing is that most people grow up and mature, but you’re the same immature dick swinging fool you were over 20 years ago. And I thought you were a twat then.

The yog has a picture of the gun totin’ hardman:

I’m nobody’s Errol Flynn myself, but damn. Guido looks like the impossible result of bareback sex between Laurel and Hardy.

No offence, Paul.

@32 Damn. I work really hard crafting a comic post, and then someone comes along with a better joke in the comments. Always the way.

By Ambereen Choudhury
Dec. 14 (Bloomberg) — Tullett Prebon Plc, the London-based inter-dealer broker, said it will help employees to leave the U.K. following the government’s decision to put a 50 percent tax on bankers’ bonuses.
The London-based firm “will seek to facilitate, where possible and appropriate, relocation to the company’s other offices around the world which have more certain taxation regimes,” Tullett said in an e-mailed statement. The firm employs about 700 brokers in London.

SO MY ESTIMATE IS THAT IF HALF OF THEM GO THATS ABOUT £55MILLION PER YEAR OF LOST TAX REVENUE. £55MILLION EVERY YEAR WE WILL NEED TO PERSUADE SOME SILLY INVESTOR TO LEND US OR £55M WE CUT FROM SPENDING.

“SO MY ESTIMATE IS THAT IF HALF OF THEM GO THATS ABOUT £55MILLION PER YEAR OF LOST TAX REVENUE. £55MILLION EVERY YEAR WE WILL NEED TO PERSUADE SOME SILLY INVESTOR TO LEND US OR £55M WE CUT FROM SPENDING.”

(caps lock broken?)

Not if the increased tax takes from the remaining firms cover the loss.

It’s about finding the peak of the laffer curve really.

Planeshift

Don’t have a grasp of economics? You are either saying that a) the remaining financial firms left in the UK will be taxed more to compensate or b) the remaining firms will pick-up the business left behind by the guys who left.

Both are utterly flawed.

If the remaining firms are taxed more then you really will see an exodus as there is absolutely no need for any of these firms to be based here when all their assets are human and financial and all their business is done online or over the phone. If the perception grows that there is no fair basis for the city tax strategy beyond punishment and milking it for all it has then I can promise you we will ALL be off and you will be left with a third-tier financial centre and a Gilts and Sterling crisis.

If you think the remaining firms will pick-up their business you are wrong for the same reason. When the brokers move all their business and clients remain the same as before – the brokers are just sat in a different location. So there is no less competition for the guys still in the UK. Just more tax.

We are well past the point of diminishing returns in taxing the financial industry. Every pound of extra taxation probably costs us several pounds in GDP across the medium to long term. But Brown is happy to be a nose-cutter to shore up his core vote.

@Guido Fawkes

Ha. You very, very sad man.

Andy,

What I am saying is that there is a rate of taxation that sits at the peak of the laffer curve, and we should find out what that rate is. My position is we should then subsequently set tax at that rate whilst adopting a long term policy of re-orientating the economy away from dependence upon sector that is blackmailing the rest of us.

I was pointing out that if only one firm leaves as a result of a tax rise, and this reduces tax take by 55 million, then the increased tax take from remaining firms may cover these losses. Like I said, it depends upon whether the tax rise pushes us over the peak of the laffer curve.

@34 your estimate fails at the point where you say “if half of them go”. Out of Tullet’s 800 staff, 700 are in London. The other offices are tiny regional ones. And their staff are all Kessex boys who don’t want to live outside Kessex because the food’s foreign and smelly.

Tullet are trying to turn the tax announcement to their advantage by trying to get more-than-no volunteers to do expat duty. The people who do take up the offer and move to start international offices are likely to get replaced in London; even if they aren’t, the net job loss will be Very Very Low.

We *aren’t* well past the point of diminishing returns in taxing the financial industry in the short-to-medium term, that much is certain. The bigger question is what happens in 10, 20, 30 years – and to be honest, that’s so dependent on wider global economic and political issues that tax probably doesn’t make much difference either, certainly in any predictable direction.

(what is certain is that, irrespective of how much or how little they’re taxed, cityboys will complain that it’s too much)

From Am I Alone in Thinking?:

Sir,
May I point out that MPs should be entitled to a fair hearing, then they should all be shot.