|Chapter title||'You are on my property': Economic, legal and moral objections to regulation from a banker's perspective|
High payments, usually in the form of end-of-year bonuses, have created an unprecedented gulf between the average earnings of employees and the remuneration of top-tier executives. For example, while the Chief Executive Officer (CEO) of General Motors took home roughly 66 times the earnings of his average employee in 1968, the CEO of Wal-Mart earns today 900 times as much (Judt 2010: 14). This bonus culture has been identified as a contributing factor in the financial crisis. It is said to have distorted the incentives of those working in the financial sector by rewarding short-term success without penalising failure. Ominously, it appears to have survived the economic and political turmoil of the intervening years: the bonus culture is still with us. This chapter explores the assertion that the compensation of those who work in the financial sector is a matter for self-regulation, and the resulting tolerance for the ‘bonus culture’. Put another way, it confronts the socio-economic context and moral subtext of an absence of legal text. It argues that any effort to re-envisage post-financial-crisis compensation structures, and financial regulation more generally, must take a socio-legal approach. That is, we must re-establish connections between text, context and subtext if we are to achieve suitably nuanced understanding of both the behaviour of markets, and their proper regulation. The chapter begins with recent legislative initiatives, taking as its central example the European Union Committee of European Banking Supervisors (CEBS) Guidelines of December 2010, and the negative reactions of the industry to them. It is suggested that at the heart of these objections is a distinctive normative approach to private property rights and economic efficiency. Extensive reference is made to contemporary commentary by practitioners and journalists in order to demonstrate the immediate real-world significance of these debates over text, context and subtext.
|Book title||Socio-Legal Approaches to International Economic Law: Text, Context, Subtext|
|Published||03 Dec 2012|
|Digital Object Identifier (DOI)||https://doi.org/10.4324/9780203075753-21|