Alex Hern counters Guido Fawke’s spin that stopping Hester’s bonus cost the taxpayer £320 million.
With the news that Stephen Hester is set to give up his £1 million bonus, largely due to the threat from Labour of a commons vote on the issue, the head of RBS has suddenly found himself with a number of defenders – or more, accurately, the head of Labour has not-so-suddenly found himself with a number of detractors.
Guido Fawkes, for instance, is pushing the idea that forcing Hester to drop the bonus wasn’t sound business:
Hester wasn’t going to get his hands on his bonus for over a year, it wasn’t even going to come directly from treasury funds and most of it would have ended up in Treasury coffers, yet this morning £320m has been wiped off of the value of the British taxpayers’ forced investment.
With mob mentality over-ruling contracts, there are obvious jitters around the banks this morning.
This is backed up with a ominous looking graph:
Unfortunately for Guido, it’s not just RBS which has had a bad morning:
Tempting as it can be to try to spot patterns in stock prices, its always best to look further afield to ensure that there aren’t alternate explanations. If just RBS were down, the bonus could perhaps be to blame.
As it is, most banks are suffering today, and the Wall Street Journal explains why:
European stocks fell Monday and Portugal’s government bond yields soared as investors fretted that Greece still hasn’t secured a deal with its private creditors on the restructuring of its debt…
“Policymakers have emphasized that Greece is unique, but markets are not convinced. Placing greater financial clout behind the euro area rescue mechanisms with strong commitment to austerity and structural reform at the national level would go a long way to securing credibility,” said Societe Generale.
Investors are also likely to keep an eye on the relationship between Greece and Germany. Reports over the weekend suggested that Germany would like the EU to have veto powers over the Greek budget–a proposal not welcomed by Greek politicians…
Banks overall were not having a pleasant session. The Stoxx Europe 600 banks index was down 2.4% at 144.89.
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• The government has the power to stop Hester’s bonus, they just don’t want to – Ben Fox, January 27th 2012
• All in it together? RBS fat cat “in line for £7m payout”. Seven. Million – Shamik Das, January 27th 2012
• Cable fails to provide a stick or carrot in the fight against obscene pay – Duncan Exley, January 24th 2012
• Three things Cameron should do if he’s serious about high pay – Duncan Exley, January 9th 2012
• How bankers’ bonuses are contributing to the new credit crunch – Cormac Hollingsworth, December 6th 2011