Opinion: Banker bonuses and public rage - what anti-bank sentiment means

There are few who would deny that the banks had an enormous part to play in the credit crunch which led to the horrors of the recent recession. The recession has had earth-shaking consequences for millions of people worldwide, who have been hit hard with diminishing incomes, the loss of their homes and jobs, and even starvation.

It has left a generation of young people drifting, rudderless, in a world devoid of the opportunity to forge careers, earn a living wage, own homes. It has scoured Europe with the wire-brush of austerity initiatives, which have seen benefits cut and infrastructures crumble. The lives of thousands have been plunged into miserable poverty – something for which the banks should surely be brought to account. Many agree – there have even been calls for the high-powered greedy financiers responsible for the financial mess to be prosecuted for their role in the recession. Yet the banks seem utterly unrepentant.

Bonuses and greed

Banker bonuses are a particular bone of contention, which rankle enormously with an angry public. To see bankers awarding themselves bonuses spiralling up into the millions for work which has brought misery to billions causes utter rage -  not to mention the fact that banker salaries are drawn from publicly banked money, subject to extortionate charges which drive the effects of the recession deeper. There are also very real concerns that such enormous bonuses cement a culture of excessive greed which encourages reckless risk taking in the pursuit of ludicrous amounts of personal wealth.

Such risks are not seen as ‘risky’ by greedy bank executives due to the ‘Too Big To Fail’ rule, which ensures that public money will be used to bail out banks when their risks go wrong as the consequences of said banks collapsing would be catastrophic. The paying out of billions in public money naturally has dire consequences for the population and infrastructure of Europe as a whole, rendering the need to do something about the greed and risk culture imperative. Bonuses appear to be the headline issue around which this battle is focusing – and the banks seem utterly and bewilderingly opposed to capping their excesses. European authorities are not blind to the depth of public feeling on the subject. Caps on banker bonuses have been imposed – yet these caps remain enormously high, and some banks construct fairly transparent ways and means of getting around them.

Money and power

The bankers evidently think that public opinion is a passing phenomenon, and things shall quickly go back to the way they were. They clearly believe that they can get away with a lack of change – and in many ways they are right. They have the enormous advantage of controlling the money. More than that, however, the biggest bankers are often drawn from the same pool of people which run the most influential European nations. They have huge influence, both political and personal, over those with legislative power.

In the UK, for example, Tory minister George Osborne has gone out on a limb to fight caps on banker bonuses – causing widespread public and political anger - yet he retains his position on the subject. This may well be because not only is his party tacitly funded by various banking bigwigs, but he also counts many bonus-loving bankers amongst his oldest friends. With such power and influence, it is perhaps no wonder that bankers steeped in a world of excess appear determined to sit out the storm of public opprobrium without changing their policies.

Public backlash 

Bankers may be making a huge error by not changing their ways. The widespread protests against banking behaviour have not gone unnoticed. While banks may be somewhat complacently considering protest to be confined to those well versed in finance in politics, and expecting the whole thing to blow over in short order, they may find to their detriment that they have seriously misjudged the situation.

Anti-bank sentiment was brought thoroughly to the attention of all during the fiery rage against big finance which was demonstrated through the actions of worldwide ‘Occupy’ movements, protests, and so on. A factor for which banks are possibly unprepared is the swift and pervasive influence of social media. Whereas flare-ups in previous years may have been kept to those who researched the particulars of the case and have passed quickly from the minds of the public, the influence of social media today means that millions upon millions of people can be informed about the pertinent issues in a matter of moments.

It takes less than a second to ‘share’ one of the hundreds of thousands of anti-bank slogans, memes, articles, pictures and so on – any one of which could go ‘viral’ within a matter of minutes and be shared around by untold numbers of people worldwide. This keeps anti-bank anger alive and ensures that the fires of resentment continue to smoulder and flame up long after previous generations would have managed to smother them.

A changing mindset

Furthermore, there is a certain egalitarian aspect to the distribution of information via social media. The constant ‘liking’ and ‘sharing’ of anti-bank rhetoric allows the issue to sink into the public consciousness, and permeate to such an extent that it becomes part of the public mentality. Hollywood have quickly realised the selling power of this anger, with films like The Wolf of Wall Street tapping into public contempt for high financiers and serving to further embed the issue within the public mind. Record companies are releasing anti-bank songs, and banker villains are increasingly cropping up in everything from books to movies to theatrical performances.

This is very bad news for the banks. The banks may think themselves untouchable, but the pervasive and all-encompassing nature of anti-bank attitudes ensures that more and more people are looking to take back the power. Websites like UK financial advice site money.co.uk are publishing widely-read articles about ‘Getting your own back’ on the banks, promising to ‘make them work for every penny of their sizeable bonuses!’. Even some politicians are realising that taking an anti-bank stance could be a considerable vote winner. Members of Angela Merkel’s generally pro-business party in Germany have been telling reporters that they may have to take the banks 'by the hand' if they do not buck up their act.

A chance of change?

What does this mean in real terms? Well, many big financiers appear to think that this is a storm in a teacup which will quickly disperse, but others disagree. Sir Mervyn King, governor of the Bank of England, has spoken very sternly about the failure of banks to heed public concerns. His words come as a precursor to his increased role in overseeing and controlling the actions of British banks. Regulations are being imposed upon banks worldwide to try and prevent the same kind of greedy gorging on cheap credit which produced the 'Credit Crunch'.

Already the banks are complaining that these regulations will strangle and ‘cramp’ them – complaints which, to most of the public, come as an indication that said regulations are a step in the right direction. In the long run, it is true that the banks do have a lot of monetary power, which gives them in turn more political power than most politicians.

As they have shown little personal inclination to accept responsibility for their actions and change their ways, it is doubtful that any change will come unless it is forced by elements beyond their control. Unfortunately, politicians are not beyond their control. However, public opinion is – and if the public continue to turn away from the banks, the banks will be forced to listen – and hopefully to reform.

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