Public opinion has swung massively against the banks since the start of the financial crisis, and they weren’t anybody’s favourite group before then. With more and more revelations appearing in the media about the amount bankers were paid, the bonuses they could expect, the scandals they were involved with and more, there has been a real hope that the industry would clean its act up.
However, a study by the financial careers site eFinancialCareers has revealed that around eight in ten bankers still expect to receive a bonus this year. Admittedly, this is a drop from last year, when nine in ten bankers expected bonuses, but it still shows that the culture of bonuses is deeply ingrained within the finance industry.
There have been repeated calls by the media, politicians and the Bank of England to end the bonus culture, as many believe it rewards failure, paying out vast sums to people who give out loans that look good in the short term but are negative overall, or even to those who conduct borderline illegal activities in order to boost their bank’s profits.
Not only that, but half of those who are expecting bonuses believe that they will be receiving more than they did last year. This flies in the face of everything that the banks are trying to tell people, carefully explaining why the culture that led to the financial crisis no longer exists, and why the strict regulations and scrutiny that people want focussed on the banks is entirely inappropriate.
Sir Mervyn King, governor of the Bank of England, has even suggested that banks forego paying out bonuses in order to increase the amount of capital they have available. A lack of liquid cash was one of the big reasons banks needed state bailouts at the beginning of the financial crisis, and ensuring that they have enough in reserve has been a constant battle for the BoE recently, not that it appears to be making much difference.