Why are bankers bonus’s so immoral? – Personal Analysis

The banks are dictating the way in which the financial and economic structures of the world operate financially supported by government, but expect to be compensated as if they were operating in free and competitive markets. Retail bankers operate as oligopolies, but are essentially performing a public service, which should be regarded as important to the security of the country as the military. It is too easy to use cheap Government credit and lend out sparingly at huge mark ups (or even lend back to the Government itself with a mark up) when people have nowhere else to go.

During the last two decades, banks lent imprudently creating economic bubbles, and were able to ratchet up their profitability and bonus’s. Furthermore they found ways to repackage debt into various instruments to further enhance their profits and bonus’s. We know today that much of this lending was suspect at best and reckless at worst yet bonus’s were due. The financial markets collapsed in 2007/2008. If banks wish to be treated as operating in free and competitive manner, then they do not deserve to be completely bailed out by governments. They were bailed out. Without the bail out to the banking industry, no single bank in the world would have survived the contagion effect and chaos would have reigned.

The financial collapse ensured that the economies of the majority of the world collapsed as banks withdrew their support for their economies and in particular withdrew lending from those countries which had the worst problems and from economies that were unlikely to have significant growth and focused upon developing lending in emerging economies.

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