Banker boys need to grow up and stop digging

THEY say that when you are in a deep hole you should stop digging.

Clearly the boys who run our banks, and it is mainly boys, have either never heard it or have chosen to disregard it.

How else would you explain AIB and Bank of Ireland’s claim that they will continue to charge small businesses penalty interest and account surcharges even though the Financial Regulator intends to stop the practice? According to AIB, without such charges customers could engage in inappropriate behaviour.

Well, Doh! Homer Simpson has been visiting all of the banks and has removed all the mirrors lest our sensitive bankers see reflections of their own repeated behaviour. Very many small, and big, companies are in trouble, not because they are bad business people or are lazy gits, they are there because of the lack of finance because of the economic problems brought about by the banks and by bankers’ greed and clear lack of accountability.

Bankers are not alone but that’s another day’s story.

Trading out of these problems would not appear to be a real option for small companies, given the lack of working capital from the banks, despite government support and exhortation. It has, unfortunately, been pointed out yet again that Irish banks are the second worst in the EU for providing credit to small and medium firms. That is second to, that bastion of entrepreneurship and good business practice, Bulgaria.

You would think that when you are asking for a salary cap to be ignored so you can employ a new chief executive on what you believe are required terms and conditions; you would try and avoid making it difficult for the Government who have to agree to the derogation.

The salary cap — €500,000 — is an awful lot of money in any man’s language. We’ve been told that if you pay peanuts you get monkeys. However, we also know the same banks have paid considerably more than peanuts in the past and we have been driven into a very deep financial crisis by the so-called cream of bankers.

We have also seen banking scandal heaped upon banking scandal including episodes of defrauding the state and the taxpayer. The brass necks run deep and obviously through generations of bankers.

Scuttlebutt would suggest that Michael Noonan is going to refuse to raise the cap but will agree to other terms and other perks that could, indeed probably would, drive the total package to €1 million and more. It would appear that the two guys in the frame are big hitters with international banking groups and will not come cheap. However, that does not mean that they are worth the money that AIB wants to pay.

Many of us already think that €500,000 of a salary is far too much. Unfortunately, it would appear that without international agreement on curbing current ridiculous remuneration packages, we would be on our own. So it looks like Mr Noonan is between a rock and a hard place. He knows the guys we have already in place cannot cut the mustard yet we cannot get the guys from outside without paying the big bucks.

Well, we do not have to roll over and just give them whatever they are asking. There has to be pretty severe strings attached.

Golden handshakes following screw ups cannot be countenanced. Anything above the cap must come with really demanding targets, not existing ones that suggest getting up in the morning is a good enough reason to get a bonus.

We must see results and those results must be over a longer term. If we do not impose such conditions we are liable to see much of what we have seen already, initial spectacular gains followed by a drop into near oblivion, but only after the bonus is paid. Just because you think you are does not make you worth it.