Wednesday, 2 September 2009

Square Mile Alert: *Updated* Euroweenies Want to Control Bonuses

UPDATED: see below

Sarkozy, Merkel, Borg and their G20 buddies are still pushing for government control of bankers bonuses.

“I don’t think the rest of the world will agree to those plans and efforts,” Otto Waser, chief investment officer at R&A Research & Asset Management AG said in a Bloomberg Television interview on Aug. 27. “Talents are just going to leave the industry and do their business elsewhere, so I don’t think it’s a workable avenue." No kidding.

Bonuses did not cause the market to nosedive, trying to cap them is an emotional reaction - not a smart one. The world is fluid. If you cap the salaries of the top talent here they will take their talent and their tax dollars elsewhere. Whether or not some people make ridiculous amounts of money is not the issue - goernments should not be telling private businesses how much they can pay their employees (well except for maybe private businesses which are now essentially owned by the government, but that is another story for another post).

How can you be sure the government will not wake up tomorrow and decide you make too much money?

Update: Well when he is right, he's right and I'm with him on this one. Boris Johnson and several other politicians from around the globe are in Brussels trying to stop, or hamper, the efforts for more government controls of the financial sector. Read the very interesting details here. It appears socialism is ruling the day at the EU, but that should not surprise anyone.