How are they trying to cook this up?
The banks are now agitating for re installing bonus systems for the employees of their private banking and corporate banking divisions.
Now it is great if bonus systems are available for employees, but when implementing those some basic questions must be answered. What are we rewarding?
Remember, these are the banks whose collective bankruptcies put them in third place over the largest corporate bankruptcies in the US according to Jared Bibler of the Financial Authority!
Anywhere in the US! Ever!
Just Kaupthing manages fifth place on that list, above such luminaries as Enron, Texaco, Chrysler and Pacific Gas. Landsbankinn is in ninth place and Glitnir tenth.
The result from Iceland’s heady experiment with becoming a global financial player is three Icelandic businesses which would make the US top ten bankruptcy list!
Three!
For a country with just over 300.000 inhabitants that must be some sort of galactic record.
Those bankruptcies can hardly be blamed on the staff of the banks’ retail branches who were lending mortgages, overdrafts and credit cards. No the problems must have really started at a higher level. Like private banking and corporate banking.
And the staff is much the same as before the crash. And now they want bonuses again.
How does that work? A successful private banking employee works the phone and his contact list again and again to make money for his division. Do Stefan and Anna really pick up the phone and say, “Hey remember that 100 million you entrusted me with in 2006-2007? Yeah, shame about that. But let me tell you about the great opportunities our asset management team has discovered for you now”.
What on earth are their customers thinking?
There shouldn’t be any reason for any customers to continue banking with the same people and the same banks…unless.
Unless those same customers have benefited somehow from handsome write-offs. And that would especially make sense at the corporate level, and to a lesser extent in private banking.
Anyhow, what is going to happen if these bonuses are not approved of? Are these employees just going to stand up and leave?
And so what? Where are they going to go? Are they really sought after in the City, Wall Street, Dubai or Copenhagen? The management should at least not worry about finding enough talent to fill their shoes at this moment in time. With close to 10% unemployment and a highly educated workforce, that shouldn’t be a problem.
Social Democratic MP Robert Marshall today said that if these bonuses would become reality then they should be taxed to the hilt. A welcome sign that there still is life in that party. But would the Social Dems really dare? Or are old habits really just too hard to break?
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Iri
1 year ago
Wow, I am stunned at the arrogance of the bankers to even bring up the issue of bonuses after everything that has happened! Who do these people think they are? Seriously unbelievable! Has anyone learnt anything?
Carl Mosconi
1 year ago
They seem to be suffering from delusions of adequacy!
Daði
1 year ago
Oh, the irony!
Just this morning I received Arion Bank’s Asset Management’s newsletter in the mail.
The headline “A long term relationship is built upon trust”
Greatest hits include: “Honesty, transparency, responsibility” and “New solutions for new situations” and “Opportunities are hiding in various places on the market”
Blubber
1 year ago
Quick! Blame IceSave. Or Brown. Or the mortgage crisis in Southern California.
Dadi
1 year ago
Blubber, I would like to remind you that this all started with Heath Ledger’s death…
Vilhjalm A.
1 year ago
Finally the government has come out with their version the of the “skjaldborg” – the fortress around Icelandic homes.
Here’s what the government proposes to do:
- sérstök úrræði fyrir þá sem eru tekjulágir eða hafa orðið fyrir tímabundnu tekjufalli
- úrræði fyrir fólk með tvær eignir
- enn lægra hámark á dráttarvexti
- við nauðungarsölur verður markaðsvirði eigna dregið frá kröfu
- fólki gert kleift að búa í húsnæði í 12 mánuði þrátt fyrir nauðungarsölu/gjaldþrot
- hámarksfjárhæðir innheimtukostnaðar takmarkaðar enn frekar
- reglur um niðurfellingu skattkrafna endurskoðaðar
- hóflegar skuldbreytingar skattfrjálsar
- stórfelldar niðurfellingar skattlagðar
- dregið úr vægi verðtryggingar
The average employed working Icelander with a mortgage gets ….. just about nothing. No reduction / write-down of the mortgage principal. No way to negotiate with the banks, except by filing a lawsuit against them.
But if you own TWO homes, congratulations, you get relief – just give back one of the houses!
See the critical article by Samtök lánþega blog, entitled “Ekki neitt !”:
http://gandri.com/?p=885
Ekkert er þar umfram þegar skilgreind úrræði um leiðréttingu á höfuðstól íbúðarlána.
Ekkert er þar að finna um aðgerðir til að þvinga fjármálafyrirtæki til að fara að lögum.
Ekkert er þar að finna um skyldu aðila til að túlka samningsatriði sem lagaleg óvissa ríkir um, neytendum í hag svo sem skýrt er kveðið á um í lögum.
Ekkert er þar að finna um aðgerðir til að stöðva nú þegar innheimtuaðgerðir sem byggja á samningum sem dæmdir hafa verið ólöglegir fyrir íslenskum dómstólum.
Ekkert er þar að finna um flýtimeðferð á þeim málum sem bíða úrlausnar Hæstaréttar.
Ekkert er þar að finna um hugmyndir einstakra þingmanna um svokallað lyklafrumvarp.
Ekkert er þar að finna um hugmyndir einstakra þingmanna um lækkaðan fyrningartíma gjaldþrots einstaklinga úr 10 árum í 4.
In the meantime the banks are happily handing out huge loan write-downs to businesses and granting themselves salary bonuses.
I don’t think it’s possible any longer to pretend that the government has some secret plan or motive to help the average Icelander. And the do-nothing strategy is not the result of ineptitude, either. It’s looking more and more likely that the real intention of the government is to reduce the need for imports by depriving the average person of almost all available discretionary spending, first by increasing taxes on everything and second by making them spend almost all their money on paying off loans to the banks. You can’t spend what you don’t have.
Bromley86
1 year ago
In fairness to the Icelandic government, this probably also applies to them:
“You can’t spend what you don’t have.”
Housing relief was always going to include an element of those with savings or in employment bailing out those that were “a little heedless”. Although I accept that there may well be better ways of doing it.
Andrew
1 year ago
“Blubber, I would like to remind you that this all started with Heath Ledger’s death…”
But what about the role of Brittany Spears in the economic meltdown?
Blubber
1 year ago
”
“Blubber, I would like to remind you that this all started with Heath Ledger’s death…”
But what about the role of Brittany Spears in the economic meltdown?
”
Clearly the infamous head shaving incident was too much for the economy to handle. But the real break came with Mr Ledger’s untimely death.
I shudder to think what will happen now that Beckham is most likely out of play this summer.
Complete and utter mayhem is sure to follow.
Andrew
1 year ago
@Blubber
Still not convinced about Heath Ledger… We haven’t even mentioned Paris Hilton or Lindsay Lohan yet either
The bankers in Britain are still getting big bonuses too, but at least their firms have to pay a 50% supertax on them.
I think the Irish have the right idea, they have just arrested one of their bankers.
http://news.bbc.co.uk/2/hi/europe/8573972.stm
Blubber
1 year ago
@ Andrew,
agreed, the Irish are getting their ducks in a row.
Reading the article, it looks like he did exactly what bankers and company CEOs were doing here. However, it seems that Icelandic legislation is so lax in these matters that prosecuting them will be near impossible?
Andrew
1 year ago
” it seems that Icelandic legislation is so lax in these matters that prosecuting them will be near impossible”
As an outsider, it does seem that Icelandic law has not yet caught up with financial matters in the 21st century. Having a law to seize assets will be a considerable advantage. I think your legislators have a lot to do (and it has to be said, are proceeding at a glacial pace!).
Blubber
1 year ago
See, I told you, Beckham injury = volcanic eruption.
Andrew
1 year ago
“See, I told you, Beckham injury = volcanic eruption.”
You were quite right. Good prediction. How about some stock market tips?
So does “Eyjafjallajökull” translate as “Posh Spice”?