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Yeah, but when the bank needs loans to stay in business it shouldn't be paying out bonuses. Particularly so if the government (i.e. taxpayers/us) went through g

Yeah, but when the bank needs loans to stay in business it shouldn't be paying out bonuses. Particularly so if the government (i.e. taxpayers/us) went through giant efforts and took a significant amount of risk to hand out these 'loans'. EDIT: I believe that the bailout was needed and it did (IMO) prevent significant negative ripples from flowing through our financial system. What I really despise is the lack of discipline and regulatory oversight during the bailout process. This left a very sour taste in many struggling Americans and demonstrated that our political structures are incapable of focused, regulated, and disciplined action.

Fuxy 12y ago
Not to mention the unquantifiable damage taxpayers took because the economy went bye bye and they were unable to pay their loans and mortgages. You can make a heck of a lot of money if you kill the economy, get bailed out and get to keep the properties and houses of the little guys that don't get the same benefits. If you really wanted the economy to recover quickly you would be bailing out taxpayers not big corporations.
pdpi 12y ago
Notice that you're effectively saying "the bailed out banks should renege on contracts". If nothing else, there's enough money on the table that the affected people are likely to litigate, and there's a fair chance you'll just end up paying the bonuses just the same, but now topped off with the expenses of a lawsuit.
- aidos 12y ago
  Are the bonuses often contractual and not discretionary? If so, they're not really bonuses.
  - growse 12y ago
    Contractual doesn't mean guaranteed. You could have a bonus that's contractually tied to a certain set of conditions being met (e.g. personal objectives). If the employee meets those objectives and the company doesn't pay out, they could be in breach, regardless of their financial situation.
  - snowwrestler 12y ago
    They are bonuses, but the word "bonus" means slightly different things in different industries. In the banking industry, think of it more like a sales commission than a totally optional check for doing a really good job. It's paid out according to a pre-determined formula, not the whim of a manager.
    - aidos 12y ago
      Which makes sense. In the cases of financial institutions needing a bailout while simultaneously paying huge bonuses something must be seriously miscalibrated in their calculations.
- tgb 12y ago
  Isn't reneging on contracts a standard part of bankruptcy?
  - pdpi 12y ago
    The whole purpose of the bailout is that there is no bankruptcy to begin with.
- tveita 12y ago
  Jailing the people responsible for committing criminal misconduct and confiscating their gains seems like a nice solution to this dilemma.
jevgeni 12y ago
Not to burst anyone's bubble, but banks need loans to stay in business per definition. Especially in a Glass-Steagal world.
easytiger 12y ago
How do you think banks work? They are see-saws of money on one big balance sheet. Also the regulatory situation in Europe is still much more stringent than in the US. In US banking there are a load of utter time wasting rules that provide little sanity to the issues suffered
zv- 12y ago
Those banks had contracts with the executives, saying they would get the bonuses if X metrics were met (likely what it was, maybe it was just a straight bonus every year, and the assumption is that they would be fired if they didn't preform). Those contracts don't go away because of a bailout. I would be interested in legislation that changes this. If a private bank (I don't think there are many truly private banks anymore) wants to give whatever bonuses it wants, I really don't care. But once public money is involved, I agree we need some strict controls.

Fuxy 12y ago

Not to mention the unquantifiable damage taxpayers took because the economy went bye bye and they were unable to pay their loans and mortgages. You can make a heck of a lot of money if you kill the economy, get bailed out and get to keep the properties and houses of the little guys that don't get the same benefits. If you really wanted the economy to recover quickly you would be bailing out taxpayers not big corporations.

pdpi 12y ago

Notice that you're effectively saying "the bailed out banks should renege on contracts". If nothing else, there's enough money on the table that the affected people are likely to litigate, and there's a fair chance you'll just end up paying the bonuses just the same, but now topped off with the expenses of a lawsuit.

aidos 12y ago
Are the bonuses often contractual and not discretionary? If so, they're not really bonuses.
- growse 12y ago
  Contractual doesn't mean guaranteed. You could have a bonus that's contractually tied to a certain set of conditions being met (e.g. personal objectives). If the employee meets those objectives and the company doesn't pay out, they could be in breach, regardless of their financial situation.
- snowwrestler 12y ago
  They are bonuses, but the word "bonus" means slightly different things in different industries. In the banking industry, think of it more like a sales commission than a totally optional check for doing a really good job. It's paid out according to a pre-determined formula, not the whim of a manager.
  - aidos 12y ago
    Which makes sense. In the cases of financial institutions needing a bailout while simultaneously paying huge bonuses something must be seriously miscalibrated in their calculations.
tgb 12y ago
Isn't reneging on contracts a standard part of bankruptcy?
- pdpi 12y ago
  The whole purpose of the bailout is that there is no bankruptcy to begin with.
tveita 12y ago
Jailing the people responsible for committing criminal misconduct and confiscating their gains seems like a nice solution to this dilemma.

jevgeni 12y ago

Not to burst anyone's bubble, but banks need loans to stay in business per definition. Especially in a Glass-Steagal world.

easytiger 12y ago

How do you think banks work? They are see-saws of money on one big balance sheet. Also the regulatory situation in Europe is still much more stringent than in the US. In US banking there are a load of utter time wasting rules that provide little sanity to the issues suffered

zv- 12y ago

Those banks had contracts with the executives, saying they would get the bonuses if X metrics were met (likely what it was, maybe it was just a straight bonus every year, and the assumption is that they would be fired if they didn't preform). Those contracts don't go away because of a bailout. I would be interested in legislation that changes this. If a private bank (I don't think there are many truly private banks anymore) wants to give whatever bonuses it wants, I really don't care. But once public money is involved, I agree we need some strict controls.