Newspaper commentators and opinion-formers are largely united in their astonishment that massive bank bonuses in the state-owned banks, for state-owned employees, are likely to go ahead. Maybe there will be some kind of eleventh hour agreemenr, but it seems unlikely.
So it is worth spelling out the reason the government seems prepared to take such enormous flak over this. It is that the Treasury is determined to sell their holding in the banks as soon as possible, and their ability to retain top staff depends on bonuses. So any shift in the government's position needs to tackle that point head on.
Of course, to that extent: the Treasury is right. But it would be really staggering if they were to sell off the nations stakes in these banks, and consider it a good job done if everything was exactly the same as before.
This isn't about risk and regulation, which is being dealt with separately. It is about whether they are meeting the coalition agreement promise to create a diverse banking system. We have to wait another year before Vince Cable's commission reports on splitting up the banks. It would be absolutely extraordinary if we got back our money, but were still left with a dysfunctional and monpolistic banking system that doesn't do its job of supporting local enterprise.
So it is time we asked the Treasury what banks are for. Would we as a nation really be relieved to get our money back but to find everything just as dysfunctional as before?
The Joy of Six 1008
10 hours ago