Thursday, 27 August 2009
It's interesting to see the head of the government watchdog to the Financial sector, the FSA, comment on a tax for large city bonuses.
Lord Turner chairman of the FSA, also told Prospect magazine that the financial services and banking sector had "grown beyond a socially reasonable size".
This is interesting because not only will it drive the financial sector abroad, which London and the UK relies on, but it will have a huge effect on incentives and bonuses across the board.
We believe, at Pareto, that incentives and bonuses are essential not only for business growth but for the country as a whole. It was not just that some people got bonuses that got the country in a recession it was many factors, mainly poor management. If bonuses become a thing of the past how can businesses grow and move forward.
We agree that needs to be some control on excessive bonuses and even management bonuses but to simply cap or stop bonuses will not help the country. Finance companies will simply move aboard to regions where they can flourish.