Once again, the reason things like this happen or bailout queens get paid like superstars is because the political class lets it happen. They always come up with plenty of excuses at the time and later provide plenty of “what else could we do?” but they’re liars.
The British taxpayers will have plenty of reasons to be furious with this abusive behavior though they won’t have much support for reform, just as we don’t have any support for reform in the US. As Elizabeth Warren has said at the DNC last year, the system is rigged.
In this case, the Royal Bank of Scotland, which is 82% owned by the state, plans to dish out nearly $400 million in bonuses to the very staff who are implicated in the bank owing a nearly $800 million fine for its role in the Libar-rigging scandal. But the bank is state-owned, so the taxpayers are paying for both the fine, and the bonuses to the people who may be responsible for the bank being fined.
Talk about an entitled group of people. Wow. Funny how entitlements like this are never cut.
George Osborne is braced for a new political backlash over bank bonuses, as state-controlled Royal Bank of Scotland prepares to pay as much as 250 million pounds ($393 million) to staff at an investment banking division heavily implicated in the Libor-rigging scandal.
The chancellor’s discomfort has been amplified by the fact that the bonus round comes just as RBS prepares to settle with US and UK regulators over the Libor scandal with a fine expected to top 500 million pounds. The taxpayer will effectively be paying RBS investment bankers about 250 million pounds in bonuses, while simultaneously footing the bill for the bank’s abuse of Libor over a number of years up to 2010.
The majority of the Libor fine will be paid to US authorities. Although negotiations are not yet complete, those close to the talks say the British taxpayer could end up sending a check for more than 400 million pounds across the Atlantic. The bank, which is 82 per cent state-owned, is expected to pay about 100 million pounds to the Financial Services Authority.