Bonus wrath hits bankers

January 26, 2010
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, DAVOS, Jan 26 – Global bankers return to the international spotlight at the Davos forum on Wednesday to battle increased regulation while still fighting off anger over bonuses.

Facing the mother of all public relations battles, Deutsche Bank chief executive Josef Akerman, Brian Moynihan of Bank of America, Vikram Pandit of Citi group and HSBC chairman Stephen Green will be among leading bankers at the World Econonic Forum (WEF) in the exclusive Swiss ski resort.

Only Green braved the Davos storm last year as governments poured trillions of dollars into saving the financial system.

Banks now face a barrage of regulatory proposals, which they are expected to fiercely oppose when with the 30 heads of state and government leaders in Davos. But their troubles are not yet over as fierce critic President Nicolas Sarkozy gives the opening speech Wednesday.

US President Barack Obama has proposed making top US banks pay an estimated 90 billion dollars in fees over the next decade to recoup "every single dime" of the Wall Street bailout.

Obama also wants to limit the size and scope of US banks so that they "never again" get so big that taxpayers have to bail them out.

Britain, in turn, is leading a push for a global banking reform deal that could include a special tax on lenders.

The bankers\’ campaign also comes in the midst of the bonus season, which is expected to see about 150 billion dollars handed out in the United States alone.

Banks have already tried to assuage the anger. Barclays staff will defer payment of bonuses for up to three years, the Financial Times reported. Barclays\’ executives are flying to Davos on commercial airlines, rather than corporate jets.

After Britain and France announced a 50 percent tax on big bonuses, other institutions such as Goldman Sachs and Credit Suisse have cut the controversial payouts.

The major banks face an uphill battle to stave off growing interference in their affairs and the ethics onslaught appears never ending.

Obama called the annual payouts "obscene" as he outlined his reforms. Former French prime minister Lionel Jospin said the bankers "will take any bawling out as long as they get their bonuses."

A multitude of international religious and faith leaders have become the latest group to weigh in with withering commentaries for a WEF report which highlighted what it called a "crisis of ethics and values".

"The most fundamental question today is whether we can adopt a more communitarian spirit or whether we will fall back into old habits and excesses," said the report, "Faith and the Global Agenda: Values for the Post-Crisis Economy."

A Facebook poll of 130,000 people in France, Germany, India, Indonesia, Israel, Mexico, Saudi Arabia, South Africa, Turkey and the United States found that more than two thirds believe the "economic crisis is also a crisis of ethics and values."

In the report, Lesley-Anne Knight, secretary general of Caritas International, the Roman Catholic charity operating in more than 200 countries, said the crisis had shown that deciders did not care about those most likely to suffer.

"Attention was focused on financial mechanisms, profits, bonuses — anything but the human beings at whose doors the trail of disaster ended: poor people largely, people who had been given loans they would struggle to repay and who would subsequently lose their meagre savings and homes as a result."

Mustafa Cacgrici, Grand Mufti of Istanbul and a professor of Islamic theology, said globalisation had become "so exaggeratedly individualistic, hedonist, materialistic and, in the last analysis, destructive."

Katharine Jefferts Schori, presiding bishop of the Episcopal Church, said: "If the wealthy of this world continue to reap outsized profits in the face of mounting poverty, we can expect only that violence and bloodshed, and growing global insecurity, will be the result."

Sri Sri Ravi Shankar, the spiritual and humanitarian leader from India, said "people have little or no faith left in banks and financial institutions" and called for a moral revival.

"Along the same lines as a carbon credits system, there could be a points system for corporate social responsibility (CSR) too," he suggested.
 

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