Editorial: No contrition in the city

Conducting the interview with the ex-Lehman Bros banker for our Black September feature was a chastening experience. Several points struck me during our Canary Wharf lunch. First, anybody who thinks the City is going to co-operate willingly with a scheme designed to curb its bonus structure is kidding themselves. A million and a half a year, as this guy was earning in the good times, is an addictive annual cash injection. Breaking that loadsa-bonus habit is going to involve first his acceptance that doling out such sums might involve some moral hazard for all of us - which he doesn't. Only then could he start contemplating the cold-turkey. Second, City workers are angry that all the blame has been levelled at them - 'This country has ridden on the coat-tails of the City for the last 10 years!' he protested. And he had a point, as the now reduced receipts from the finance sector to HM Revenue and Customs will show.

by Matthew Gwyther, mt editor
Last Updated: 09 Oct 2013

Third, what really hit me was the lack of remorse. He genuinely did not believe that either he, his bank or his industry had brought about this financial train-crash and recession. He blamed Dick Fuld, politicians and public naivety that it could all go on for ever. For him, things weren't going to be so easy, but there was no way his new employer Nomura wanted him or his colleagues to be less creative. 'You stick a hair shirt on for a while, but then you find other ways to make money.'

Although the slump might mean that the take-home pay of our Master of the Universe drops from a million and a half to a paltry six-figure sum, it means something far worse to Joe Public. Those who will suffer when business hits the buffers and companies start hacking away at costs are ordinary, less-well-qualified people - those on £25k who are going to lose their jobs and have to explain that to their kids when they get home from school. Mr Ex-Lehmans was right to says that we all floated upward in the bubble together, but now that it has been pricked, the hardest fall will be for those with no crash-mat.

One thing that's vital as things turn down is to try to keep one's chin up (see our feature, p46). There's nothing worse than a collective dose of the blues to have us all reduced to numbed inactivity. I'm not saying that we should all be wandering around grinning like village idiots oblivious to the realities we face. Just that sometimes seeing a glass that is half-full rather than half-empty can do wonders for morale and productivity. And survival.

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