BARCLAYS chief executive Antony Jenkins is the latest banking boss to waive his bonus. Quite right, given the catalogue of scandals and investigations surrounding his bank.
His decision follows that of Stephen Hester of Royal Bank of Scotland and Stuart Gulliver of HSBC to forfeit all or part of their bonuses, leaving only Antonio Horta-Osorio, chief executive of Lloyds Banking Group, as the last of the big banking bosses still in line to collect a payout.
These self-denying acts of goodwill suggest at least a shift in attitude from the “hell mend them” days when senior bankers believed these huge top-ups to their already inflated salaries were an entitlement rather than a reward for good performance.
But the time is now right for further action to control the payment of bonuses and such action can only be taken by government which needs to show that this squalid back-slapping is no longer acceptable.
The latest scandal over interest rate swaps and the imminent fines over the Libor-rigging outrage could not be more acutely timed, just as the banks prepare to make their annual awards.
Lord Lawson, the former Chancellor, has called for an end to big bonuses and for none to be paid at all at RBS, which he wants taken into full public ownership and carved up. A complete ban on bonuses, at least until all the repair work on the banks is complete, may be the only way to resolve the issue and if it means bankers leaving for other jobs then so be it.
RBS, desperate to be seen as a responsible bank, is looking to claw-back up to £100 million in bonuses from investment bankers to cover the imminent fines over Libor rigging and to withhold £150m from this year’s pool. But it is still planning to pay out £300m.
By relinquishing his own bonus Jenkins has made what he will regard as a noble gesture and since replacing Bob Diamond he has been at pains to demand a return to ethical standards at Barclays.
But some regard these moves as little more than exercises in public relations. The banking system continues to be attacked by the culture of greed that erodes public confidence and trust.
£33bn gamble on the unknown
BRITAIN is slow to invest in major infrastructure, whether it is in broadband communications, energy or, perhaps most frustratingly of all, building a railway fit for the times.
The network in use today remains largely the one created by the Victorians but which is forced to handle many times its original capacity. That suggests the case for HS2, the high speed line from London to the north of England, is something of a no-brainer. New lines are indeed badly needed to improve traveller comfort and overall efficiency.
But the debate over the merits of the line is far from clear cut. Journey times will be shortened, but does that encourage more people to head north, or will it simply suck more into the already crowded south-east? Experience in other countries suggests that capital cities gain over those provinces that such lines are intended to benefit.
When Dr Beeching shut swathes of lines in the 1960s he did not anticipate crowded roads and the rise of the commuter belt. He could not have expected almost every commuter in the 21st century to have a laptop and smartphone. Committing £33 billion to this new line is therefore a gamble on what we know and expect, but the future is full of unknowns.