(13c) Barclays - and its current scandal

The third largest bank of the UK, Barclays, is going to make redundant (equals "is going to get rid of") up to 12,000 employees (this is about 9% of the employees) because the bank has to lower its costs while it will do everything to try to avoid the European cap on bonuses so the bank can pay even higher bonuses than before to its top people (thus effectively increasing its costs). But also other banks are doing their best to find ways of avoiding the cap so they can pay themselves more.

That is what I described before as bad leaders: firing between 10,000 and 12,000 people to be able to pay yourself even more than the previous year by trying to find ways to avoid breaking laws, even when they are European and thus disliked in the UK. Good employers will be happy their business grow and thus need to employ more employees while companies that are not doing very well need to cut the numbers of employees and this will sadden good leaders who may even sacrifise some of their income to save the company. However, bad leaders will fire people to be able to pay themselves more. But what does one expect of leaders (employers) who are not held to account for bad management, certainly when it is not their own company? Why should those leaders feel sorry for others if mismanagement advances them?

And thus, now employees of these banks feel (again) what it means when bonuses are more important than employees although many employees defended the bonuses as they too received something. And those staying employed will be happy getting their own bonus. What can you expect? It may be something for the days they too may loose their job while now they have to work even harder (just when more people are asking for work).

I also wonder why a bank needs to get rid of people in order to be able to pay bonuses? Is this a sign something worse is going to happen such as a new financial problem? This, the future will tell because banks will not. But even many economists warn banks can't continue behaving as before without consequences for all of us. Indeed, I don't trust investors any longer when they can't learn from their past mistakes and can't dampen their greed. But then, over and over again we are told that greedy people, I mean people who take responsibility, only work when they get lots of money and thus these bonuses are necessary to employ the best. In reality, for me they are lazy as they only work when they get lots of money in return while they say that people who work for only some money (e.g. nurses and teachers) are lazy and have no ambition. Still, next time when banks fail, it is agreed no longer the taxpayer but shareholders and deposits of above €100,000 will be used to save banks (I admit, I don't know much of it) as the now almost bankrupt countries will not be able to do and thus many more years may come to pay oneself bonuses as the deposits are huge. In effect, as many (most?) of the rich have their savings in certain countries, it will mainly be the middle-class that will be affected (not something to look forward to if people who saved over many years loose everything) and not the wealthy ones when next time banks fail. Those with less deposits are save for the moment although they may have to use their savings after reforms to the benefit systems will result in them getting less. Still, the EU at least is trying to impose rules for better control of the banks (although maybe we should allow failing banks to fail while refunding the savings of people they loose during bankruptcy (or at least refund a certain (as large as possible) percentage) so they can place the money in well-behaving banks while misbehaving leaders should be in prison).

In the UK but also elsewhere, many political leaders admire these people who have no conscious and take for themselves while they despise those who loose their job and claim benefits and may become poor as a result of benefit reforms. Still, one day one bank too many may fail and take with it the money of those politicians. Then these politicians may become very angry indeed and find solutions against the greedy bankers.

Update 25/02/2014: It seems also JP Morganannounces thousands of more job cuts after the thousands of job cuts last year due to a decrease in numbers of mortgage refinancing as interests rates start to rise (if I remember well, the previous crisis started in the housing sector) as well as a reduction in the numbers of employees in the retail division as the bank switches to more automated machines although it seems the bank also wants to hire some 3000 bankers (who may be paid less and will know little of the bank's products and thus may make errors as those with experience will be fired and thus can't train them). And thus we should trust banks?


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