When Lloyd Blankfein met politicians in London a little while ago he brushed aside warnings that investment banks faced higher taxes if they ignored the rising public outcry about multibillion-dollar bonus pools. The Goldman chief executive seemed to believe governments would not dare.
That misjudgment – a measure of the breathtaking hubris that, even after all that has happened, continues to separate bankers from just about everyone else – may explain Goldman's response to the British government's decision to apply a 50 per cent tax to this year's payouts.
In the description of Whitehall insiders, Goldman executives reacted with anger and aggression. The threat was that the bank would scale back its business in London. For a moment it seemed Gordon Brown's administration might wobble. In the event, Goldman's lobbying failed to persuade it to soften the impact of the tax.
Britain, of course, is not alone. France has imposed its own bonus tax. Barack Obama's administration has just announced a levy to recover an estimated $90bn (£55bn, €63bn) over 10 years. The centre-right government in Sweden has gone further by introducing a permanent "stability levy" to discourage excessive risk-taking.
It is a measure of how far the political debate has shifted against the financial plutocrats that George Osborne, the Tory shadow chancellor, has applauded the Swedish plan. If the Tories win the coming general election, they would support a worldwide levy along similar lines. It is "unacceptable", Mr Osborne remarked the other day, for the banks to be paying big bonuses rather than building resilience against future crises.
rest at http://www.ft.com/cms/s/0/d2424f46-0461-11df-8603-00144feabdc0.html?nclick_check=1
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