Following the loss, RBS management has agreed to reduce (not eliminate, God forbids) their performance bonuses, and instead increase their base salary, claiming they will not be able to attract talent otherwise.
Indeed, if it’s talent that was needed to lose such sums, wouldn’t it be a prudent business decision to attract the less talented?
And let’s get serious. Bankers are not as hot as they once were. Do we really feel that if we didn’t increase their salaries they will resign, and take, for instance, teaching jobs instead? If banks don’t understand the current economic reality of supply and demand they are in the wrong job, and we’d better get rid of them altogether.
On the other hand, if we give them, why shouldn’t they take? After all, this is one of the only things they do understand.
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