You rightly query why it has taken since 2008 for the Bank of England merely to “propose” that bankers “may” have to return unjustified bonuses within six years of receiving them (Comment, 14 March), but the problem of recouping quickly-spent bonuses could be solved by awarding them only in shares that cannot be sold or transferred for several years.
In this context, the Royal Bank of Scotland results are relevant. Its total losses for 2008-13 were £46 billion, exceeding the so-called profits of £45bn declared in 2007.
So, over the 12 years – surely a reasonable time-scale for any bank’s genuine profitability and strength to be judged – RBS earned less than nothing.
By coincidence, it also owes the taxpayer £45bn, so unless the bank is sold to a generous buyer, it will have to earn at least that sum for us to be repaid within the next 12 years – hardly likely as it moves back to its core UK retail base.
During 2002-7, based on such “profits”, it paid out vast sums in bonuses to numerous executives and directors. Not one has refunded a penny, though after public pressure, Fred Goodwin reluctantly waived £200,000 of his £703,000 annual pension.
Such directors are financial trustees from whom one might expect the highest degree of personal responsibility.
One might expect a self-focusing moral compass, a concerned awareness of the public pocket’s effective payment of these sums, and a humble questioning of their entitlement to retain such largesse, particularly those who remain members of the world’s senior body of professional accountants – motto Quaere Verum, or Seek The Truth.
St Andrews, Fife