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Opportunity for Dublin in financial trading in the proposed limit on bankers' bonuses to salary level


patslatt

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Opportunity for Dublin in financial trading in the proposed limit on bankers' bonuses to salary level

See Bankers' bonus cap: negotiations stall | Business | The Guardian Maybe blinded by envy,eurocrats don't understand that salaries of many financial traders and securities sales people are merely meant to cover living costs-often champagne style-while the real money is earned in bonuses that can be a high multiple of salaries. For banks,that has the cost control advantage of keeping fixed wage costs low,while variable bonus wage costs can be slashed in periods of slack business.

More important,bonus arrangements recognise the reality that performances vary enormously in occupations that traditionally are paid heavily in commissions and bonuses eg many kinds of trading;commission sales in securities,insurance and property;investment banking deal making. The 80/20 rule applies to these,also known as Pareto's law in sociological statistics.This rule of thumb indicates that roughly 20% of sales people account for 80% of sales,20% of the traders account for 80% of trading profits etc. Within this 20%,the top performers,maybe a tenth of them,may account for,say,40% of sales or of trading profits. Given this variability in results,it simply is totally impractical to reward people heavily on salary,as a top trader or sales person could be four times as productive as the average and ten times as productive as the below average.

As a result,banks in Europe will be forced to radically restructure their trading operations when the bonuses are limited to salary levels. Many banks will not be able to trade efficiently and will withdraw from many trading activities in bonds,foreign currencies and financial derivatives. Some will outsource trading to US and Canadian subsidiaries,possibly creating an army of new traders on the graveyard shift starting at 4 to 5am to open at the same time as Europe. These traders would need to visit Europe frequently to keep in touch with clients.

Many banks will also outsource trading to independent trading houses,providing them with the capital to do the trades. It would be important that those trading houses have some of their own capital involved in the trades-"skin in the game" to ensure diligence in trades as opposed to gambling with bank money.

This could be an opportunity for traders in Dublin to set up major independent trading houses offering their services to Irish,UK and European banks. Irish billionaires with experience of financial trading,Dermot Desmond and JP McManus,could be interested.
 
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neiphin

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Aug 23, 2009
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you should do a wipe round here on p.ie
get in on the ground floor ,sort of speak
 

patslatt

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[/QUOTE]

EU's IDIOTIC LIMITS ON BANKERS' BONUSES

Ireland as chair of EU negotiated a deal on bankers' bonuses yesterday. Limiting bonuses to one or two years' salaries will apply even to non-EU bank employees,presumably those of EU banks,as opposed to non-EU employees of non-EU banks with EU affiliates and subsidiaries.This gives the latter an immediate competitive advantage over EU banks where EU bonus oriented investment banking activities can be done outside the EU,especially in the US and Canada. Most trading activity can be done far more efficiently by traders working mainly on bonuses rather than high fixed cost salaries and the same is true of the sales and client development side of investment banking.

The City of London will fight this on the EU constitution which specifically forbids wage setting. City gents who formerly looked favourably on the EU for their EU wide financial activity will tend to become Eurosceptics.
 

ManUnited

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5,221
EU's IDIOTIC LIMITS ON BANKERS' BONUSES

Ireland as chair of EU negotiated a deal on bankers' bonuses yesterday. Limiting bonuses to one or two years' salaries will apply even to non-EU bank employees,presumably those of EU banks,as opposed to non-EU employees of non-EU banks with EU affiliates and subsidiaries.This gives the latter an immediate competitive advantage over EU banks where EU bonus oriented investment banking activities can be done outside the EU,especially in the US and Canada. Most trading activity can be done far more efficiently by traders working mainly on bonuses rather than high fixed cost salaries and the same is true of the sales and client development side of investment banking.

The City of London will fight this on the EU constitution which specifically forbids wage setting. City gents who formerly looked favourably on the EU for their EU wide financial activity will tend to become Eurosceptics.[/QUOTE]

Who cares?
 

patslatt

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Apr 11, 2007
Messages
13,693
EU's IDIOTIC LIMITS ON BANKERS' BONUSES

Ireland as chair of EU negotiated a deal on bankers' bonuses yesterday. Limiting bonuses to one or two years' salaries will apply even to non-EU bank employees,presumably those of EU banks,as opposed to non-EU employees of non-EU banks with EU affiliates and subsidiaries.This gives the latter an immediate competitive advantage over EU banks where EU bonus oriented investment banking activities can be done outside the EU,especially in the US and Canada. Most trading activity can be done far more efficiently by traders working mainly on bonuses rather than high fixed cost salaries and the same is true of the sales and client development side of investment banking.

The City of London will fight this on the EU constitution which specifically forbids wage setting. City gents who formerly looked favourably on the EU for their EU wide financial activity will tend to become Eurosceptics.
Who cares?[/QUOTE]
The gents are highly influential and could swing the outcome of a referendum on EU membership.

Dublin has a lot of financial jobs,though mostly back office administration,not trading or investment banking orientated.
 
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seabhcan

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Sep 3, 2007
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Paying bankers multimillion bonuses to encourage psychopathic behavior is not good for society. Its not good for the real economy. Its generally a bad idea.

Its like paying bus drivers bonuses for finishing their route early, and then being surprised when they achieved it by speeding and not picking up passengers. It defeats the original goal.

Banning excessive bonuses it is a good idea.
 

viper999

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Ireland will opt out as we protect the large corperations and the like with ultra low tax breaks, and the high paid elite who have been cut fe.ck all, we will hear some sh.te about getting the best people you have to pay top money, even though these f,uckers are the same people who rode this country bare back and put us where we are
 

ManUnited

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Ireland will opt out as we protect the large corperations and the like with ultra low tax breaks, and the high paid elite who have been cut fe.ck all, we will hear some sh.te about getting the best people you have to pay top money, even though these f,uckers are the same people who rode this country bare back and put us where we are
Ireland were front and centre pushing it through.
 

johnfás

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Feb 22, 2007
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Reality is ireland doesn't currently do the form of banking which would attract the high bonus earners. We do a lot of fund domicility and administration but not management. We could obviously hope to change that over time.
 

Spanner Island

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These rules are bound to have so many holes in them that the banks will drive coaches and horses through them in no time...

Heard it speculated this morning that it's possible the banks will simply up salaries by multiples of what they are now which could well lead to worse than the existing shambles...

Simple answer is to tax the sh!t out of bonuses and close all loop holes...


It's like the bedroom tax they're introducing in the UK for social housing...

It wouldn't surprise me if one of the consequences of that will be people having more kids they can't afford in order to avoid it...

Avoid the tax. Get additional child benefit... a win win situation for those on welfare while the 'state' foots the ever increasing bill... :roll:
 

anewbeginning

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Jan 20, 2009
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If they leave, good riddance.

These are the so called masters of the universe whose investments can make millions one year and lose billions the next year and still they take their bonuses.
 

stopdoingstuff

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Feb 26, 2011
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The poison chalice more like. Mind you Singapore is a nasty place so maybe it's the best place for them. The threat of a good caning might be a better incentive.
Singapore won't mind because it's not a bailout type of place.
 

CarnivalOfAction

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Jun 15, 2010
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16,545
Paying bankers multimillion bonuses to encourage psychopathic behavior is not good for society. Its not good for the real economy. Its generally a bad idea.

Its like paying bus drivers bonuses for finishing their route early, and then being surprised when they achieved it by speeding and not picking up passengers. It defeats the original goal.

Banning excessive bonuses it is a good idea.
Agreed but they will find ways around it. Need to impose a Robin Hood tax [FTT] and properly tax high incomes. And firmly shut all the loop-holes.
 

Barroso

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Oct 1, 2011
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EU's IDIOTIC LIMITS ON BANKERS' BONUSES
Ireland as chair of EU negotiated a deal on bankers' bonuses yesterday. Limiting bonuses to one or two years' salaries will apply even to non-EU bank employees,presumably those of EU banks,as opposed to non-EU employees of non-EU banks with EU affiliates and subsidiaries.This gives the latter an immediate competitive advantage over EU banks where EU bonus oriented investment banking activities can be done outside the EU,especially in the US and Canada. Most trading activity can be done far more efficiently by traders working mainly on bonuses rather than high fixed cost salaries and the same is true of the sales and client development side of investment banking.

The City of London will fight this on the EU constitution which specifically forbids wage setting. City gents who formerly looked favourably on the EU for their EU wide financial activity will tend to become Eurosceptics.
These scum are responsible for much of the crisis we are now living through, and you want even more of them over here.
You do realise that one of the earliest banks to go to the wall was a German one, owing to the antics they got involved in in the IFSC, don't you?
 
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