Scars run too deep to let bankers off hook on pay

EVEN 10 years after the crash, the banks are regarded by many as only being there to drive us all around the bend in a vehicle which we are still paying off in instalments.

It certainly hasn’t helped that the combined bill for the tracker mortgages over-charging will be at least a billion.

Against such a background comes the news that Finance Minister Paschal Donohoe is to review current pay restrictions across our bailed-out banks.

This will probably be enough to give some people nose bleeds, but the fact of the matter is that having spent northwards of €65bn on rescuing our financial institutions, it is important that we have the right people to run them.

Not that remuneration in itself is a guarantee of competency or performance, as we know to our cost.

Mr Donohoe has, however, announced that he will use the State’s 71pc stake in AIB to stop plans to return to executive share bonuses from next year.

The deferred incentive scheme would have amounted to almost 100pc of pay for the bank’s 100 top earners over six years.

Austerity scars are simply too raw for that one to run politically.

Pay increases alone are a hard sell given the scale of the banking scandal, but massive bonuses to boot would have been seen as simply having a laugh.

The banks are cleaning up their act, and much progress has been made. But the consensus view would be that having to live within a top pay scale of €500,000 ought not be too much of a hardship.

It is many years since economist John Maynard Keynes mused: “How long will it be necessary to pay City men so entirely out of proportion to what other servants of society commonly receive for performing social services not less useful or difficult?”

How long, indeed.