Monday, October 25, 2021
More

    Latest Posts

    Irish bank pay curbs risk more harm than good

    Receive free reward updates

    Ireland’s memory of the financial crisis and the subsequent € 67.5 billion bailout program from the IMF and the EU is still fresh after more than a decade. That is to be expected given the significant impact of the crisis on the Irish economy and the daily lives of its citizens.

    Makes it easier to understand the popularity of Ireland’s fixed salary cap of € 500,000 For lender bankers who received taxpayer relief, in parallel with a complete ban on bonuses. This measure has made the Irish administration one of the toughest in the world when it comes to curbing bankers’ wages, exceeding the EU’s bonus limit, which limits prizes to twice fixed salaries.

    But as Latest senior exit According to the Bank of Ireland show, caps and bans are now dull tools that go beyond their usefulness and are now at risk of harming more than good. These apply to three lenders (BoI, Allied Irish Banks, and a small permanent TSB) with government interests that dominate the domestic market. Other financial institutions are not bound by tech companies, not to mention the tech companies that are obsessed with (until recently) the promise of Irish tax-friendly bases.

    Headhunters and bankers have complained that this measure has hampered participation and instead exacerbated turnover, from the top to the cashiers. This is a problem when Irish lenders are competing with fintech companies and international banks for customers and talent. After Brexit exchanged London for Dublin..

    In reality, the cap only affects a handful of executives. Others have found workarounds, such as BoI CEO Francesca McDonough negotiating with the Treasury for a salary of € 950,000. Her predecessor maintained a salary of over € 600,000 after the introduction of the cap.

    More important is the ban on bonuses.Most unfairly, it also extends and applies to health care and child care To all 22,000 regular employees Of a bailed out bank. It’s hard to justify it. The pandemic widened the gap and allowed other financial companies to distribute childcare vouchers to their employees.

    Politicians personally nod to the need for reform.But banker wages are not the winner of the vote of the struck country First by the financial crisis, and now by the pandemic.. The delicately constructed majority coalition government is half-focused on the 2025 elections. Left-wing nationalist Sinn Féin, who is currently successful in polls (although it is unlikely to find a coalition partner), is even tougher when it comes to bankers’ salaries.

    But politicians need to insist on the long-term prosperity of the Irish banking sector. This does not have to mean a return to the excessive risk-taking seen before 2008. Even if Ireland waives the bonus ban, it is still subject to the EU’s variable salary cap. Banks of Ireland are also in a position to withstand some possible bad debt losses. The ratio of the safest type of capital was 18.8% at the end of 2020, compared to the European average of 15.6%.

    Proponents of wage caps argue that bosses, who are essentially utility banks in government-sponsored duopoly, do not deserve high salaries. Probably not. But it should be a board decision, not a state. This is especially bad in the case of BoI, where the state’s stake is currently only 12% (the government remains a majority shareholder in AIB). Set to further reduce..

    Routes set by the government to abandon its interests Insisted on banking without state support.. Now it’s time to cut the strings attached to the support.

    Irish bank pay curbs risk more harm than good Source link Irish bank pay curbs risk more harm than good

    The post Irish bank pay curbs risk more harm than good appeared first on California News Times.

    Source link

    Latest Posts

    Don't Miss

    Stay in touch

    To be updated with all the latest news, offers and special announcements.