EU nears cap on banker bonuses, as Osborne holds out

The UK is one of just three countries opposed to the cap.

EU banking reforms are set to impose a limit on bankers' pay, against the wishes of much of the City of London.

The proposal, backed by the democratically-elected European Parliament, would cap bonuses that exceed the recipients salary. France has recently come around to the idea, and, the Financial Times reports, there is now a "clear majority" which is willing to agree to the cap just to get the debate out of the way. The rest of the reforms, which are focused on bank capital ratios, are considered urgent, and there is little desire to hold them up over the pay caps.

The UK, leading those who oppose the pay caps, has suggested that even it is preparing to case on the basic idea, circulating a policy document suggesting reforms which "build on the principle of a cap", the paper reports:

It strengthens current rules enforced in the UK with an absolute ban on upfront cash bonuses that exceed salary and a requirement for bank shareholders to set a cap on variable to fixed pay.

But a ban on upfront cash bonuses is very different from the ban on the entire bonus exceeding salary. That proposed ban can, with a vote from a supermajority of shareholders, be weakened to a 2:1 ratio of bonus to salary, but even that is still a far more restrictive requirement than the one the UK desires.

The British government has reasons for its scepticism. The argument for including bonuses in a bill focused on bank stability is that, when a bonus can exceed the value of one's salary, the incentive to play it safe rather than go for massive short-term profits is reduced. But the UK also makes a compelling argument for focusing just on cash bonuses. Other types of bonus, like front-dated stock options or bonds which vest only if the employer still exists, can be tweaked so as to encourage not only profit but healthy, stable, profit.

In contrast, if the EU's current plan passes, the incentive will be to offer the entire value of the cap in up-front cash. The magnitude of the bonus may thus be shrunk, but its incentive effects could end up being perversely increased.

Nonetheless, politically the economic effects of the bonus cap are likely to be less important than the simple fact of its existence. The banking sector has been seen as overpaid by most of the British public for a very long time now, and if Osborne digs his heels in over what many will see as the right for banks to pay unlimited bonuses, he could find himself even more unpopular than he already is.

That is especially true if the importance of what is being delayed hits home. The capital ratios — which are the main focus of the talks — are widely seen as one of the first post-crisis regulations which could actually have a real effect on the likelihood and severity of future financial crises. By requiring banks to have a certain amount of liquid capital on hand, the move will, it is hoped, prevent the damaging bank runs which ultimately contributed to the recession in 2008. If the Chancellor is seen as holding the economy hostage over the right for banks to pay unlimited bonuses, his image as a canny political operative may be damaged somewhat.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Why hasn’t British Asian entertainment built on the Goodness Gracious Me golden age?

It is 20 years since the original radio series of Goodness Gracious Me aired. Over two decades, the UK media portrayal of Asians hasn’t used its success to evolve.

Save for a handful of special one-off episodes, Goodness Gracious Me hasn’t occupied a primetime TV slot for nearly two decades. Yet still it remains the measuring stick for British Asian comedy.

The sketch show, which transitioned seamlessly from radio to screen (it started as a BBC Radio 4 series in 1996), has stood the test of time and is as much a staple of modern British Asian culture as Tupperware or turning up an hour late.

What Goodness Gracious Me did so expertly was to take a set of serious issues facing first, second and now, I suppose, third generation migrants, and turn them on their heads. 

In making light of the pressures of academic expectation or family drama, Goodness Gracious Me wasn’t playing down the poignancy of such concerns; it was raising awareness and combatting their uglier side with humour.

It offered resonance and reassurance in equal measure; it was ok to have an embarrassing uncle who insisted he could get you anything much cheaper, including a new kidney, because other people like you did too.

That Goodness Gracious Me was broadcast on a mainstream channel was also a victory for minorities; it made us feel integrated and, perhaps more importantly, accepted. Against the backdrop of Brexit, what wouldn’t we give for that treatment now?

Really, though, the jewel in Goodness Gracious Me’s crown was its willingness to recognise diversity within diversity. It is a relic of a departed era when discourse on TV around Asians was different, when the broad church of that term was truly represented, rather than reduced to one catchall perception of British Muslims.

Goodness Gracious Me offered insight into the experiences and idiosyncrasies – religious or otherwise – of Indians, Pakistanis, Bangladeshis, Sri Lankans and even English people. It’s what made it so accessible and, in answering why subsequent programmes have failed to reach similar heights, this is a good starting point.

Without the flexible sketch format, the modern Asian sitcom Citizen Khan has struggled to cover multiple topics, and, by being specifically about a Muslim family, it leaves many non-Muslim Asians wondering: where’s ours?

I hasten to add that I feel plenty of sympathy for the British Muslim community, hounded by tabloid headlines that attack their faith, but it would be disingenuous to suggest that non-Muslim Asians are sitting pretty in 2016 and don’t need a similar level of support in terms of positive public perception.

The current volume of British Asian media products is fairly good. The BBC has its dedicated network, The Good Immigrant essay collection was one of the outstanding reads of the year, and we still have champions of comedy in Romesh Ranganathan and Nish Kumar.

But I think ultimately it comes down to the broadness of appeal, rather than the quantity of products. Goodness Gracious Me was not only able to engage the full spectrum of British Asia; it transcended its target audience and was on terrestrial TV.

The British Asian media on offer now is up against it, released as the country’s attitude towards foreigners completes a full circle back to the same suspicion my grandfather encountered in the Sixties.

Fewer outlets are willing to explore the stretch of what it means to be Asian, either by denying it due consideration in mainstream shows or by peddling their own monolithic observations. The BBC Asian Network, for example, is laudable in its existence, but does little to engage the young Asians who aren’t into techno spliced with Bhangra.

The mainstream representations of Asians in Western film and television that are commissioned, meanwhile, are irritatingly limited and sometimes inaccurate. In an article for the Guardian last year, Sara Abassi lamented the disproportionate appetite for “gritty post-9/11 films about conservative Pakistani families”, and that the researchers of American series Homeland failed to realise that the national language of Pakistan isn’t Arabic.

When I interviewed the actor Himesh Patel for the No Country for Brown Men podcast, he suggested that the answer to re-establishing Asians in mainstream media, both here and in America, was three-fold. The first challenge to overcome was for outlets to acknowledge that not all Asians fit the same religious or cultural profile; the second was to be open to placing Asians in non-Asian specific products to better reflect their presence in society.

Patel, who is best known for his portrayal of Tamwar Masood in the soap opera EastEnders, made his third recommendation based on this role. He felt that characters should be written with only their personality in mind, making the ethnicity of the actor who plays them incidental. Tamwar’s awkwardness but underlying kindness, Patel said, was what defined him – not his skin colour.

Goodness Gracious Me, though a primarily Asian show and a comedy at that, actually taught some salient lessons about representation. It succeeded in providing a window into a multiplicity of cultures, but at the same time wasn’t a total slave to the politics of identity – several of the 100-plus characters needn’t have been Asian at all. It was reflexive to the times we lived in and a perfect advertisement for empathy. That is why we still talk about it today.

Rohan Banerjee is a Special Projects Writer at the New Statesman. He co-hosts the No Country For Brown Men podcast.