Banks 'still expect taxpayer to pay for their failure' (key Bank of England policymaker)

[stockholmer]

A key Bank of England policymaker has contradicted the public statements of senior bankers by revealing that some privately expect the taxpayer to pick up the tab in the event of another financial crisis.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8736081/Banks-still-expect-taxpayer-to-pay-for-their-failure.html


In a paper published yesterday, Paul Fisher, the Bank's executive director for markets, disclosed that "some banks have told us that they think they should not be required to hold capital and liquidity to deal with such extreme tail events – leaving the public sector to be the capital provider of last resort".


His comments clash with the public statements of bankers who claim lenders should not be a burden on the taxpayer. Earlier this year, Bob Diamond, Barclays' chief executive, told the Treasury Select Committee: "It is not acceptable for taxpayers to bail out banks," adding that "badly managed" lenders should be allowed to fail. There is no suggestion that Mr Diamond is among those to whom Mr Fisher was referring.


Mr Fisher was speaking as banks have stepped up their campaign against structural reforms proposed by the Independent Commission on Banking to prevent a repeat of the crisis. He claimed the crisis was partially caused because bank bosses "seemed to have had no grasp of how risky their exposures really were". The reason was the weakness of stress tests, which looked at each bank in isolation and failed to "make consistent assumptions about ... general market conditions".

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Directors’ reluctance to bullet-proof their banks against extreme risks, however, “leads directly to moral hazard and excessive risk-taking”, Mr Fisher said. “Tail events seem to happen far more often than people assume and if the risks were properly acknowledged at the outset, many structures would be avoided or risks re-structured so as to limit losses in the event of tail risks. That has obvious implications for financial stability.”

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Some CEOs paid more than company tax bill: study

http://www.marketwatch.com/story/some-ceos-paid-more-than-company-tax-bill-study-2011-08-31

CHICAGO (MarketWatch) -- There are 25 major U.S. corporations that paid their chief executives more last year than they contributed in federal income taxes, according to a report released Wednesday. For its "Executive Excess" study, the Institute for Policy Studies looked at the 100 U.S. firms that paid their bosses the most and at a quarter of them, "the bill for chief executive compensation actually ran higher than the company's entire federal corporate income tax bill." Among those were General Electric, Boeing, Ebay, and Verizon .

At the same time, the group noted that major corporate CEOs took home 325 times the pay of the average American worker: "Among the S&P 500, CEO pay last year averaged $10,762,304, up 27.8%, while average worker pay...finished up at $33,121, up just 3.3%."

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Median income in the USA is around $25,000 per year, here in Sweden, median income is over $37,000. The ultra high wages/earnings at the top of the USA distort upwards what the vast majority are actually making.

Per capita GDP is even more inaccurate, as so much of the USA GDP is based on financial turnover, not production.

[hifiguy]

1. If these shits don't want to carry enough capital to cover

their own exposure, they should be allowed to fail, driven through the streets of London in tumbrels to be pelted with rocks and garbage and clapped in chains in a dungeon somewhere. There must still be a usable dungeon in some English castle.

[RUMMYisFROSTED]

2. UNacceptable.