Bankers need to think about their public reputation

January 18, 2010 at 10:18 am | Posted in Uncategorized | 2 Comments
Tags: bankers, bonuses, election, recession, reputation

With Bank profits (and associated bonuses) back in the news the public outcry is again becoming deafening. The Banks have (rightly or wrongly) become the scapegoat for the current recession, and the public anger has only been heightened by the billions of taxpayer’s money that has been used to bail the them out. The fact that, barely twelve months on, the Banks are already gearing up to pay employees bonuses of hundreds of thousands of pounds smacks of naivety, especially so close to an election.

The City of London contributes an enormous amount to Britain’s prosperity, and in a free market if our Banks are recruiting the best and making huge profits then those staff members should be rewarded for their expertise. However, the level of animosity currently held against bankers, coupled with the back drop of rising unemployment means the timing of their bonuses is pouring fuel on the fire. The biggest potential threat for the Banks and their remuneration strategy is becoming an election issue with Brown and Cameron trying to outdo each other to show who would come down hardest on the Banks – a popular vote winner at the moment. Far better for the Banks to understand their current reputation with the public and, at the very least, defer bonuses for a year while the heat is taken out of the topic and they are no longer a national news story. Continuing with their current policy of not seeming to care about their reputation could result in legislation being introduced that will impact on them for years to come.