It’s an absolute scandal that AIB staff are not now going to get their hard-earned bonuses.
Tough shit, John.
Of course the scam artists will all still get their money in the end.
The concept of a bank bonus itself is a complete scam. Bankers have proved to be nothing more than terrorists preying on societies, worldwide.
Can one of the banking heads here explain why should you be paid a bonus for doing your job?
I see absolutely nothing wrong with a bonus being paid to reward good work. It’s about as good a motivational tool as there is I’d say.
The problem with bonuses in Irish banking was that people were being rewarded for the wrong thing. This was true for the senior execs, who were being rewarded for attaining (unsustainable) double-digit EPS growth every year, down to individual lenders, who were being rewarded for the volume of money they were getting out the door. This completely misses the point of what banking is - it’s a long game, and until you get your money back with interest, all you’ve done is put it at risk. So effectively, people were being rewarded for putting as much money at risk as possible and booking paper profit on it, and there was no real incentive to make sure that the borrowers (or customers in the dangerous parlance of Irish banking) were good for the money.
As with everything, this is ultimately driven by the paymasters, in this case the institutional shareholders (mainly pension funds at the time I think, but I stand to be corrected on that), who demanded that kind of dividend growth as an important source of income.
That’s a fair explanation Braz.
The problem with banking as I see it is that it’s a game that’s entirely based on quantifiable figures. These figures are easily manipulated and falsified by people to cloak reality. The whole financial system is so complex with all these derivatives and stuff that very few people understand. That has to make it incredibly easy for people to get away with fraud on a giant scale. There’s something like 15 quadrilion dollars worth of derivatives floating around the wold financial system. All of this stuff is just figures on a computer. It cannot be anything else except a giant scam.
When you hand out bonuses based on achieving quantifiable targets, people will do anything to reach those targets, at the expense of the overall health of their organisation and of wider society. Why would somebody who stands to gain big money care that what they are doing is unsustainable and deeply damaging to society as long as they get personally rich? They don’t. As long as that bonus culture exists personal greed will continue to be the main motivating factor in banking and the financial sector and another crisis will roll around as surely as night follows day.
If people think what went on here is bad, I’d say the sort of shit hat must be going on in America would make people’s eyes water.
Never overlook the role of pensions in all of this. Thirty years ago the average man started work at 17 and worked til 65 and was dead by 72. In other words he worked 48 years to fund a 7 year pension. By 2007 people weren’t joining the workforce until they were 22 and they were retiring at 60 and living til 82. Thirty eight years work to pay for a twenty two year retirement. It’s no wonder thepension funds were squeezing the pips out of the banks to drive higher returns
Thanks for that explanation, lads. FFS. Go back to class.
You have got to be kidding me.
http://www.herald.ie/national-news/boi-executive-scoops-secret-e500k-bonus-2465951.html
By Herald Reporter
Saturday December 18 2010
A SECRET €500,000 bonus was paid to a senior Bank of Ireland figure in recent days – without the knowledge of the Minister for Finance.
The Department of Finance is investigating the payment, which was reportedly made to the executive in Bank of Ireland Asset Management (BIAM).
The Government has demanded full details of the bonus – one of the largest paid in the Irish banking system.
A Department of Finance spokesman said: “The payment was not notified to the minister, NTMA or the department. We are awaiting an explanation from the Bank of Ireland.”
The revelation came as AIB staff continued to press for bonuses to be paid despite Mr Lenihan’s objections.
The bank is facing 75 lawsuits from AIB’s capital markets division.
Mr Lenihan told the Dail earlier this month, in answer to a parliamentary question, that Bank of Ireland gave bonuses to a small number of people at “middle management level” which reflected either guarantees which were agreed after joining the bank, or bonuses which had been deferred over several years.
Bank of Ireland told Mr Lenihan that “it had no legal discretion in these matters” according to the Dail reply.
Bank of Ireland has many generous perks for its senior executives. The chief executive gets an annual cash allowance of €34,000 for his car on top of his basic salary of €690,000.
Head of retail Des Crowley receives an annual car cash allowance of €27,500 along with €20,000 for entrance fees to clubs, and €7,000 for annual membership fees. Both also receive free tax advice.
Meanwhile a surprise doubt has emerged over Mr Lenihan’s new laws giving him sweeping powers to reform and restructure the banking sector.
Rather than immediately signing the banking legislation, President Mary McAleese called a meeting of her special advisory council to decide if the banking legislation is potentially unconstitutional.
Was talking an to an ould Tipperary fella in a bar in last weekend. Said he would start voting Sinn Fein if the IRA returned to take out a few bankers.
I know the lad well and he is as grounded a man as you’ll meet and it shook me when he said it.
People are starting to seeth.
[quote=“Kinvara, post: 53458”]
I’d vote Sinn Fein if the IRA came back and started shooting Fianna Failers.
Shannonsider - he’s in the RA
Can someone explain to me what these stress tests are? Says on the news there that BOI will need 5-6bn and Irish Life will need to sell its Life business to fund PTSB or something like that. BOI and AIB shares suspended from trading on ISEQ in the morning.
They’re basically a set of corcumstances based on unemployment rates and other economic factors to project how a bank will perform. Will the banks have enough solvency or enough liquidity to cover these scenarios? (2 separate tests).
The speculation on PTSB is that they’re fucked. They have a tiny deposit base so are hugely exposed on their disproportionate share of the mortgage market. They have received no capital until now because they had no NAMA loans but their capital shortfall sounds like it will be huge in these stress tests.
The life part of that company is profitable and all assets are ringfenced and solvency is very secure. But that life business can’t bail out the bank, rightly, so the government need to intervene again. They won’t want to keep the life co though and the industry won’t like it either so that will be sold. In reality its the only part of the business worth saving.
Not sure what the impact for the other two is because there has been less speculation and they’re better placed with higher deposits and already having received state capital. The trading suspension is more likely to stop wild speculation before the results come out in the afternoon.
I’d call on any employees of the affected financial institutions browsing the forum to avoid rumour and innuendo tomorrow morning and concentrate fully on servicing customers.
Leo Varadkar said that “the banks won’t get another cent”. I believe him. 
My brother sold his ILP shares a few years back for 22 euro a share. I held onto mine 
a pity Phil Leotardo wasnt around still to sort them out
Why cant PTSB sell off Irish Life and use the money to shore up its balance sheet? suppose the black hole is too much to be plugged.
Anyway since the Irish taxpayer will own 5 (is it?) banks AIB, Anglo, BOI, PTSB, INBS - its time the wages of their entire staff are cut to bits. Fuck it they should all be merged and thousands of staff given the boot. Not great for the staff but its hugely unfair how these staff are being protected but others in companies that have gone bust have been left with nothing. Just hope the new government can finish for good these disgraceful institutions and start again.
What a shameful state of affairs and one that should be rammed down the throat of every public sector bashing mong. 5 private enterprises bust and through their idiotic business models have bankrupted the country for generations. Yes, regulation should have been in place but they ran themselves into the ground and staff, bondholders etc should be taking the fall for it.
And so the seeds were sown for an Irish financial services conglomerate that took over the world, the world I tell you, in the most Monty Pythonesque way you could imagine.
Looks like by the end of the day we’ll have only two banks left. AIB & BOI. EBS & IL&P to be jammed into either one of the two of em.
Some farce that they let IL&P buy Nationwides deposit book and now they’ll have to move it somewhere else.
Wages aren’t really going to cut it. There have already been plenty of redundancies in the banks and there will be many more as they consolidate further. The wages are really just a drop in the ocean anyway. The companies are losing vast sums of capital. I agree that they’re not viable entities anymore so I would question the need to support them even further but hitting the workers isn’t going to solve the problem or imporve the national economy.
It’s the likes of me with a 1.75% tracker mortgage that’s killing the cunts B)