Liberals = Bonkers

Matt gets it about right in the Telegraph today when he asks, "Is it me, or does May 6th seem to be getting further away."

Traditionally, I look to the tofu munching Liberals to provide a bit of light hearted entertainment during the whole drawn out election thing. I'm pleased to report that this time round they are determined not to disappoint and have come up with some truly bonkers ideas that put them nicely on the edge somewhere between the pre war Politburo and Arthur Scargill.

Send for the men in flapping white coats in the van with the blue light on top.

This morning the Liberal Democrats have shown themselves to be a real threat to the UK economy with their delusional policy on the banking industry within the City of London . 

Let's just summarise what Mr Clegg and Dr Cable said this morning:
 
- No cash bonus over £2,500.    
- The rest to be paid in shares that cannot vest for 5 years and cannot be traded.
- No bonuses at board level.
- Full disclosure of any individual that is earning more than the UK Prime Minister - approx £200,000
- A desire to have a strong banking system in the UK.
 
So, are the Lib Dems just referring to banks that needed Government cash or all banks/brokers that operate in the City of London? What happens when a bank that did seek financial aid from the Government(Tax Payer) has extracted itself from the public sector and returned to the private sector?
 
What happens to a payment in shares if an individual wished to leave one bank to work for another?High fliers may find a new employer will make a payment to compensate...but then what becomes of the monetary value of the abandoned shares? 
 
Workers that are not high fliers count on their annual bonus... it can ease the cost of Christmas and for young workers or middle ranking officers they may not be able to walk away from shares in the current employer.
 
Is this a restraint of trade...is this in breach of the employment rules of the European Union?
 
How are board members to be rewarded? Watch the share price ahead of vesting date!
 
What is it with the level of income that the PM makes...how about we adjust for inflation the income earned for the 5 years after leaving office of Baroness Thatcher, Sir John Major and Tony Blair...the latter has truly coined it since leaving No 10.
 
Can the Lib Dems really believe that their polices have any merit in making the banking system or the City of London strong? As capital is international so talent can be so as well. Do they not have any concept of the multiplier effect that resonates through London and ripples out across the land?
 
This was playing to to masses on the grandest of scales. It is sadly in reality a very naive policy. Lending targets should be missed if the target can only be achieved by lending to untenable/uneconomic causes.
 
The net result of this nonesense will be higher salaries yet again, as I described in an earlier post, producing higher fixed costs which will be passed to the customers.  The banks will then be less competitive against international banks. Oh, and yes, more people will leg it abroad reducing the tax take.
 
Yes there is a need for reform, we have to celebrate and reward the intelligence and innovation in the City, not give it a dose of euthanasia.  You could hammer six inch nails into their foreheads without causing any damage: I'll say it once more for these stupid people; look through the compensation issues and seek out the leverage and concentration of risk that generate unusual returns. Both Bear Stearns and Lehman had extremely high levels of employee ownership and long term share lock in periods. Didn't help much there did it? Unfortunately, Mr Cable now appears to believe his own PR and has said goodbye to reality. These stupid people are avoiding doing the right thing and enacting good reform to create a more stable banking platform because they are either too stupid, too idle or just like to break things.
 

God help us if we have a hung parliament and this shower have any say in matters of any import.