Sir, It is far from financially illiterate to equate Bob Diamond’s bonus with the salary of public sector workers (“Driving bankers abroad is financial suicide”, Camilla Cavendish, Opinion, Mar 10). Leading banks can only afford to pay such massive bonuses because as institutions that are “too big to fail” they benefit from a taxpayer guarantee that enables them to borrow more cheaply than would otherwise be the case. According to the Bank of England, this subsidy is worth £100 billion annually.
Of course, banks will loudly resist attempts to claw back some of this subsidy for wider social benefit. But despite the sound and fury their room for manoeuvre is limited.
Any bank looking to relocate, would not only have to find another city with the infrastructure of the City of London and a time zone between the US and Asia, but also a government with deep enough pockets to bail them out when things go wrong. That essentially leaves Frankfurt, although that also has a cost for an industry where English is the accepted international language.
Rather than fold in the face of bankers’ threats, the Government should call their bluff and join the German and French governments in attempting to get a fairer deal for ordinary taxpayers. Financial transaction taxes, supported by Lord Turner, chairman of the Financial Services Authority, could raise up to £20 billion in the UK alone.
Reducing the lottery-sized, publicly-subsidised rewards bankers have come to take for granted would be an added bonus.
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Max Lawson
Robin Hood Tax campaign
Sir, Let the bankers go, and allow equally talented but more public spirited executives and traders to take their place. Allow these people to make the profits that fund our public services but without the thinly veiled threats that they will bring financial ruin upon us if they are not allowed to make obscene personal gain.
At its heart, a sector so vital to our way of life must have a strong ethical foundation. To build our future on a foundation dominated by greed and threats to our elected government will prove to be disastrous.
Angus Ross
Penrith, Cumbria