SilverHood
FH is my second home
- Joined
- Dec 23, 2003
- Messages
- 2,377
True, but the people who caused these losses are no longer with their original firms. Why should FX traders get no bonus, even though they've earned their company 20 million last year, just because some guys in credit derivatives fucked the system? If the guy isn't paid his bonus, he is going to call his friends at the other banks and get a job there.
Where does that leave the bank in question? They just lost 20 million in profit because they couldn't pay out 1 million. Repeat for every single other desk with the exception of Credit desk guys, who are thankful they have a job.
The same argument is going on over here in the USA, Citigroup just offloaded Phibro for the book value to avoid the bonus politics. That commodities trading desk has made 100's of millions every year for the last 10 years. And they couldn't keep it because the guy who ran the desk was contractually bound to receive a 100 million bonus, as part of the $500 or so million profit his desk generated. So Citi just threw away their star desk to keep the US government happy. That is retarded on so many levels. Business comes first, keeping the government happy second. If you have no business, then it's moot anyway.