Lessons still not learned by banking elite

The complete disconnect between senior bankers and those in privileged positions within the financial services industry and ordinary taxpayers in this country has been laid bare once again this week by the controversy surrounding Irish Nationwide boss Michael Fingleton. Mr Fingleton finds himself under increasing pressure to resign from his €1m-a-year post with the bulding society after it was revealed that he had been paid a €1m bonus and allegedly benefited from a €27m pension payment. Calls for him to step down have grown ever more strident this week with the Green Party branding the situation 'a disgrace" amid mounting public outrage over such greed at a time of soaring unemployment and when ordinary taxpayers have had their pay frozen, or in many cases, cut. Mirroring this farcical situation across the Atlantic is the US public"s fury over €220m paid in bonuses to executives of the American International Group (AIG) since the insurance giant was bailed out by the American taxpayer. Public and political outrage at the payment of such large bonuses in what was effectively a failed company before the rescue has been fanned by an indignant media demanding those in receipt of the money give it back, and lawmakers have begun crafting bills that could have the effect of taxing the bonuses by up to 98 per cent. Some AIG executives, frightened by the furious reaction of the American public - and even death threats - have offered to return the full amounts, even though the AIG chief executive had asked all those who received bonuses of over €100,000 to give just half of it back. It is reported that a number of AIG employees have already handed back their entire bonuses. The shameless greed that has been displayed by some banking figures truly defies belief when set against the realities facing most people in the current economic crisis the world is facing. The desire to punish such avarice is completely understandable when these are the very people who contributed to the collapse of the financial house of cards and who then received billions of euro/dollars in taxpayers" money to keep their institutions afloat. While demonising bankers is a favourite bloodsport at the moment, it is important to make the distinction between those at the top of the banks and the institutions themselves. The banks cannot be allowed to fail as they would bring the entire global financial system with them, sparking worldwide chaos. The lessons of Lehman Brothers have been learned, and that lesson is that banks" failure would be felt harder on Main Street than Wall Street. Senior bankers, on the other hand, are expendable and those who have presided over this banking catastrophe should now be shown the door. The behaviour of some senior bank bosses, like the particularly loathsome attitude adopted by the former boss of Royal Bank of Scotland, Fred Goodwin, who rejected pleas to hand back his £16m pension pot, can only be described as morally corrupt. Mr Fingleton has shown contempt for all Irish taxpayers, the very people who will be left to pick up the pieces of a ruined Irish banking sector, a monster that he helped to create. But the board of Irish Nationwide is also culpable in this matter. How on earth did it manage to approve such an inappropriate bonus and pension arrangement in such difficult economic times, or was its correctness even questioned by those who were appointed to supervise and guide the fortunes of the building society? There are many questions to be answered about this affair and it is entirely right that Finance Minister Brian Lenihan ask the Attorney General if it is possible to claw back the bonus if it was in breach of the terms of the bank guarantee scheme.