# Big banks paying $13 billion in bonuses



## james4beach (Nov 15, 2012)

Bloomberg reports that the Big Six banks have set aside $12.6 billion to pay bonuses. Read this article and hear how bankers moan and whine that bonuses aren't too big this year.

These corporations have some nerve paying these kinds of bonuses. These are glorified government jobs, backed by taxpayers and the government. The only reason they have such strong profits are the public back-stop that WE give them.

IMO bank employees should be treated like government employees: cap the salaries and restrict bonuses. We should also break-up the banks so that their risk-taking investment banking (capital markets) divisions are separated from traditional, depository institutions.

The USA had the Glass-Steagall Act of 1933, which forced the separation of investment banking from depository banking. Canada needs this. By 1998-1999, the US law was repealed, paving the way for the modern taxpayer-backed investment banks that we all know and love. But that law kept a lid on investment banking for 65 years! If you go back to historical records you will find that investment banking wasn't the extremely lucrative field it is thought of as, today.

I don't mind them paying huge bonuses if they actually take their own risks. Separate the investment banking, end all government support, and let them be true capitalists.


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## MrMatt (Dec 21, 2011)

james4beach said:


> I don't mind them paying huge bonuses if they actually take their own risks. Separate the investment banking, end all government support, and let them be true capitalists.


Yup!

While we're at it, can we cut government welfare to other corporations?


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## james4beach (Nov 15, 2012)

MrMatt said:


> Yup!
> 
> While we're at it, can we cut government welfare to other corporations?


Yes, definitely!


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## MrMatt (Dec 21, 2011)

james4beach said:


> Yes, definitely!


Okay, lets start with the media bribes.


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## Janus (Oct 23, 2013)

The banks are a funny one. I have no issue with any company doing what it wants with its profits, but you're right that these profits are to some extent enabled by the Canadian government. Regulation helps them stay in business. But the same could be said for a utility. Their wealth management (asset management and brokerage) business is one of the biggest drivers of profits if I recall, and it poses no risks to the canadian financial system. Who are we to say they shouldn't give out bonuses in line with the rest of bay street in those areas?

At the end of the day, unfortunately, as a Canadian I feel like you have to own the banks in your investment account so that you can make back some of the money that these institutions make off the back of all canadians.

The US banks as far as I know have similar structures to the Canadian ones today, it's just prop trading that's been removed so they can't blow up. I don't feel like modern investment banking endangers a bank once the prop desks are gone.


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## sags (May 15, 2010)

I would have no problem if the bonuses were distributed to all levels of employees, but i suspect they were concentrated at upper and senior levels of executives. What is particularly shameful is handing out bonuses to executives while handing out layoff notices to lower level employees.


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## Money172375 (Jun 29, 2018)

sags said:


> I would have no problem if the bonuses were distributed to all levels of employees, but i suspect they were concentrated at upper and senior levels of executives. What is particularly shameful is handing out bonuses to executives while handing out layoff notices to lower level employees.


Even the tellers got their performance bonuses, in addition to $500 given to every employee for covid efforts.


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## MrMatt (Dec 21, 2011)

sags said:


> I would have no problem if the bonuses were distributed to all levels of employees, but i suspect they were concentrated at upper and senior levels of executives. What is particularly shameful is handing out bonuses to executives while handing out layoff notices to lower level employees.


The upper levels of management are the ones who can make significant impacts on profit.

If someone makes the company an extra $10k, go ahead give them a $1k bonus.
If someone makes the company an extra $10M, go ahead give them a $1M bonus.

I'm a TD shareholder, and I'm okay with paying for performance.

Oh, I also have family that works at TD, if they're not pulling their weight, lay them off.


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## Beaver101 (Nov 14, 2011)

sags said:


> I would have no problem if the bonuses were distributed to all levels of employees, but i suspect they were concentrated at upper and senior levels of executives. What is particularly shameful is handing out bonuses to executives while handing out layoff notices to lower level employees.


 ... as an added bonus: come next year, watch your banking fees increase.


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## ian (Jun 18, 2016)

In sales and sales management I worked on salary and commission. When targets were reached, commission percentages increased greatly. As a general manager I was paid salary and bonus/stock options. Pay for performance was a major contributor to my ability to retire early. Yes, I put in many 10-12 hour days with lots of travel in order to take advantage of opportunity. Seems to me more and more companies are going this way. Shareholders want results.


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## Beaver101 (Nov 14, 2011)

Obscaneus


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## MrMatt (Dec 21, 2011)

ian said:


> Shareholders want results.


And we're willing to pay for them.


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## sags (May 15, 2010)

Who decides who is most valuable to a company and how much that is worth as a bonus ?

The high level executives decide and guess who they think is most valuable and worth the most bonus ?

When the US banks were losing money, heading for bankruptcy and being bailed out by taxpayers, they continued giving themselves bonuses.

When the CEOs were asked why they were handing out bonuses to senior executives, when bank employees were being laid off by the thousands and stock holders were watching their retirement investments evaporate......they all had excuses, but JP Morgan's CEO Jamie Dimon summed it up the best when he smiled and told Senator Elizabeth Warren...."because we can".

The funny thing about US bank CEOs if they often publicly state there exists a great wealth disparity, but they want the government to fix it.......not them.

How about companies that have never earned a profit, or are losing money ? Should those executives be giving themselves bonuses ?


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## sags (May 15, 2010)

MrMatt said:


> And we're willing to pay for them.


Don't be naive. You don't have a choice. 

Did the US banks ask permission from the shareholders getting hammered by the declining stocks if the CEOs should get bonuses ?

The Board of Directors, appointed by the company make the decisions. It is a nice little circle of friends.

Sometimes a shareholder holds enough shares to question the practices, but they are quickly labelled as "activist shareholders".

They are too few to make a difference.


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## MrMatt (Dec 21, 2011)

sags said:


> Who decides who is most valuable to a company and how much that is worth as a bonus ?


The owners



> How about companies that have never earned a profit, or are losing money ? Should those executives be giving themselves bonuses ?


If the people paying the bonus think so, yes.

If it isn't your money, who are you to decide how it's spent?


If I think they're doing a good or exceptional job, yes they should get high salaries and big bonuses.
It's my money and I can spend it how I want.


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## ian (Jun 18, 2016)

Bank employees are getting laid off. Been in a bank branch lately? Technology has changed the nature of many businesses. If you owned the bank and branch traffic was down by 50 or 60 percent would you hold branch staffing levels to what they were 10 or 15 years ago. Would you keep unprofitable or less profitable branches open or would you consolidate branches and invest in IT.

As a shareholder I know what I would expect the bank’s management team to do....stay competitive.


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## Tostig (Nov 18, 2020)

MrMatt said:


> The owners
> 
> 
> If the people paying the bonus think so, yes.
> ...


A lot of corporate employee handbooks say that the company's most valuable assets are the employees. So it should be the employees that get most of the bonuses especially the tellers and customer facing people who haven't been paid overtime for years.

Secondly, if you are a shareowner, it IS your money they are giving away so shareowners really should exercise their right or option (as far as the Board offers them) to say on pay.


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## MrMatt (Dec 21, 2011)

Tostig said:


> A lot of corporate employee handbooks say that the company's most valuable assets are the employees. So it should be the employees that get most of the bonuses especially the tellers and customer facing people who haven't been paid overtime for years.
> 
> Secondly, if you are a shareowner, it IS your money they are giving away so shareowners really should exercise their right or option (as far as the Board offers them) to say on pay.


Honestly tellers and customer facing people don't make a lot of money.
For years retail banking was considered somewhat of a loss leader.

I did exercise my right on say on pay, I voted to approve the compensation package last time I saw it proposed.


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## ian (Jun 18, 2016)

As a shareholder I am more than happy to bonus someone who meets and exceeds their financial targets. I have no problem rewarded those who come up with ideas or implement plans that make the business more profitable than plan.

I mean really, who be willing to may another 20 percent for a domestic automobile simply so that manufacturers did not layoff excess staff and have people sitting around doing busy work? This is what it comes down to.

As a senior I do not pay anything for my checking account. My bank just eliminated the $1.50 charge to seniors for interact e transfers. Like others, I use an on line bank for my HISA because the interest rate is so much higher than bank's offering and just as convenient. We use Home Trust for foreign currency transactions because our bank credit card adds a 2.5 percent service charge. And on those few occasions when we need hard copy bank cheques we order them direct @ $20. instead of paying our bank $40. for the exact same product, same printer. When we had mortgages we always negotiated the rate/terms. Except for our first home when we did not know any better, we never paid for bank mortgage appraisals or those ridiculous mortgage renewal fees. It was competition from other lenders that made the bank willing to negotiate away these fees. Not much effort on our part either other to ask and be prepared to walk to another vendor.

The big banks do have competition in some areas. Alas, many Canadians are incredibly relaxed about banking charges yet they still like to criticize.


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## ian (Jun 18, 2016)

duplicate


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## james4beach (Nov 15, 2012)

ian said:


> As a shareholder I am more than happy to bonus someone who meets and exceeds their financial targets. I have no problem rewarded those who come up with ideas or implement plans that make the business more profitable than plan.
> . . .
> The big banks do have competition in some areas. Alas, many Canadians are incredibly relaxed about banking charges yet they still like to criticize.


They are not competing fairly. The big banks are the ones paying these massive bonuses, and this happens because they are supported and back-stopped by the public (taxpayers and our children).

An investment bank which gets to take tons of risk, harvest the benefits of them when they go well, but then NOT face the risks and losses when their gambles go sour, is not operating within the framework of capitalism.

You're not really a true shareholder either. If you really were a shareholder, in the way corporate ownership is supposed to work, then *you* would also take on all risk and downside of the business of the banks. However, you do not. The public shares that risk with you.


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## MrMatt (Dec 21, 2011)

james4beach said:


> They are not competing fairly. The big banks are the ones paying these massive bonuses, and this happens because they are supported and back-stopped by the public (taxpayers and our children).
> 
> Yes, they should get bonuses if they meet financial targets, but only if they are operating as true independent businesses. The big banks are not independent. They are government-supported, and they don't deserve any of these bonuses.


1. They shouldn't be government supported.
2. Government employees who excel, and have variable compensation in their contracts, should get bonuses.


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## Money172375 (Jun 29, 2018)

ian said:


> Bank employees are getting laid off. Been in a bank branch lately? Technology has changed the nature of many businesses. If you owned the bank and branch traffic was down by 50 or 60 percent would you hold branch staffing levels to what they were 10 or 15 years ago. Would you keep unprofitable or less profitable branches open or would you consolidate branches and invest in IT.
> 
> As a shareholder I know what I would expect the bank’s management team to do....stay competitive.


Can you share some stories of bank layoffs.....I haven’t seen any lately.


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## james4beach (Nov 15, 2012)

MrMatt said:


> 1. They shouldn't be government supported.
> 2. Government employees who excel, and have variable compensation in their contracts, should get bonuses.


Again, I completely agree.

Another option is that banks can be run like Crown Corporations. These are good jobs, and there are bonuses. I have some friends who work at Crown Corps and have excellent careers.

If bank people still want the public backstop, maybe it's time we the public take over their equity and turn them into Crown Corporations. This will give the solid government assurance that they deserve and love.

I very clearly remember how they whined in 2007-2009 that they are essential businesses and need government help. Great, so the government should run them. Boy oh boy did they whine, and then they started threatening all of us and said everyone is going to suffer if they don't get public help NOW.

So let's make them Crown Corps. If that idea doesn't appeal to Bay Street, that's fine too ... but let them take their own risk. In the current structure, they don't assume their own risks and that's not capitalism.


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## Mortgage u/w (Feb 6, 2014)

I have no issues with the profits the banks make. You have the option to invest in them to get a piece of the pie.
I also find it an advantage they are regulated by the government. Its the reason we didn't follow the US during the subprime fallout.


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## ian (Jun 18, 2016)

Make banks a Crown Corp? Is that some sort of a joke????

Our banking system works. Why screw it up with Government ownership and control.


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## james4beach (Nov 15, 2012)

ian said:


> Make banks a Crown Corp? Is that some sort of a joke????
> 
> Our banking system works. Why screw it up with Government ownership and control.


No I'm absolutely serious. What do you mean 'screw it up with government'.

Do you realize how much government supports and keeps these things alive? They basically ARE government structures. If it wasn't for the government behind these, the Big Five banks wouldn't be anywhere worth what they are now, your bank equity would be worth far less too.

The decision has to be made. Either they are government, or real corporations... you can't have a hybrid like this.

Nobody is forcing them to be government owned. I'm saying, if you DON'T want government ownership, then they also don't get to have government support and backstop.

If you don't want them to be government owned, then they must be torn apart so that investment banking is separated out, with absolutely NO government support when they blow up. *That's real capitalism.*


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## sags (May 15, 2010)

I suspect the banks will come begging again when the tsunami of COVID bankruptcies start arriving.


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## Spudd (Oct 11, 2011)

Money172375 said:


> Can you share some stories of bank layoffs.....I haven’t seen any lately.











Reuters | Breaking International News & Views


Find latest news from every corner of the globe at Reuters.com, your online source for breaking international news coverage.




ca.reuters.com


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## ian (Jun 18, 2016)

sags said:


> I suspect the banks will come begging again when the tsunami of COVID bankruptcies start arriving.


The banks have already taken a loss provision for covid bankruptcies.


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## ian (Jun 18, 2016)

Are some people suggesting that banks never lay off staff as their business model changes or as business practices change? Does this layoff ban only apply to banks, or are some people suggesting that no business should be allowed to layoff people? Why not let businesses decide on what staffing levels are best for them...up or down.

Business are in business to make money. They have to stay competitive. I worked in an industry that was downsizing for 20 years as it moved from emerging to mature. Layoffs and technological change necessary. Failure means bankruptcy....even more jobs lost.


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## MrMatt (Dec 21, 2011)

james4beach said:


> No I'm absolutely serious. What do you mean 'screw it up with government'.
> 
> Do you realize how much government supports and keeps these things alive? They basically ARE government structures. If it wasn't for the government behind these, the Big Five banks wouldn't be anywhere worth what they are now, your bank equity would be worth far less too.
> 
> ...


Government screws up most things.

No I don't realize how much government support keeps them alive.

You can have hybrids, which they are not. 
Canada post, a Crown corporation is a hybrid.

I don't want government ownership, and I don't want government support or backstop.

Why does investment banking need to be separated out? Because you don't like it?


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## james4beach (Nov 15, 2012)

sags said:


> I suspect the banks will come begging again when the tsunami of COVID bankruptcies start arriving.


It's too early to tell what will happen with bankruptcies, but if insolvencies do get bad, yes of course they will... and that's my point.

Every time they screw up (these are *bad business decision*) they come to the taxpayer for help.

I ran a business too, and I don't get to do that! I can't be reckless, become insolvent, and then go running to the federal treasury for emergency assistance. Oil & gas doesn't have that luxury either.

Banks could avoid trouble by operating with much less leverage and having a much larger capital position. But they don't. They take aggressive risks, and then once a decade or two, they screw up badly and then come begging for public money.

It's unacceptable.


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## james4beach (Nov 15, 2012)

MrMatt said:


> I don't want government ownership, and I don't want government support or backstop.
> Why does investment banking need to be separated out? Because you don't like it?


The issue is that the government will _inevitably_ have to support/back stop the regular banking side because it's so essential to the country. We can't escape from that and I think government will always support the traditional big banks.

But, investment banking then piggy backs on it and exploits that implicit support. This division takes extreme risks, and during boom times, creates enormous bonuses and outlandish compensation. They also can incur extreme losses like in 2007-2010. This division is the wild, reckless part of the bank.

When it's all one big bank, and investment banking blows up, the rest of the institution eats the losses too and the whole bank inevitably goes running to the government for help. The investment bank is also able to benefit from liquidity facilities that are offered to depository institutions, things like the central bank liquidity support lines.

So the investment bank piggy backs on all the goodies and supports that are meant for standard depository banks. That isn't right. During the last crisis, the investment banks (having enormous losses) were benefiting from the parent bank's use of central bank facilities. That's not what those facilities are for.

By separating out investment banking, you let that institution (capital markets division) experience real risk and reward. That's what I'm after ... let them have REAL risk and real reward. Pay the employees billions of dollars for all I care; they can do whatever they want as a private corp. But if the firm goes bust, they're bankrupt. No support. That's how it's supposed to be.

The *result* is that the remaining "traditional bank" stripped of its capital markets division, now is able to use those liquidity facilities / central bank facillities the way it's meant to, which is public or national support for traditional banking.


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## doctrine (Sep 30, 2011)

Great news! A $13B injection into nearly 100,000 bank employees in Canada and their families. Other companies should follows suit. Better than burning the money doing something stupid like buying foreign companies and writing them off a decade later, like some banks have been known to do.


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## MrMatt (Dec 21, 2011)

james4beach said:


> The issue is that the government will _inevitably_ have to support/back stop the regular banking side because it's so essential to the country. We can't escape from that and I think government will always support the traditional big banks.
> 
> But, investment banking then piggy backs on it and exploits that implicit support. This division takes extreme risks, and during boom times, creates enormous bonuses and outlandish compensation. They also can incur extreme losses like in 2007-2010. This division is the wild, reckless part of the bank.
> 
> ...


Yeah, I agree that's a nice idea.
But the government often bails out politically connected groups, Trudeau will even break laws to bail out friends.
It's not even a federal problem. 

Provinces love to bail out supporters as well.


https://www.cbc.ca/news/business/ontario-defends-pension-fund-bailout-1.895617


Yes bailing out private pensions is like the government just topping up your RRSP, but they're politically connected, they get your tax dollars. That's the way our democracy works.


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## ian (Jun 18, 2016)

Very happy with the banking system. We hardly need the Government to participate. Fine to regulate but not directly operate.

At the retail level I believe the biggest problem is Canadians themselves. Far too passive. If more people shopped for things like service charges or negotiated instead of blindly accepting bank T's and C's the banks might be forced to become more competitive when it comes to service charges and credit card offerings. Why wouldn't the banks keep increasing account fees and service fees when Canadians are apparently so willing to accept them? Certainly we complain, moan and groan...but that is the extent of it. A month later it is back to normal. It is a no brainer for the banks.


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## Tostig (Nov 18, 2020)

doctrine said:


> Great news! A $13B injection into nearly 100,000 bank employees in Canada and their families. Other companies should follows suit. Better than burning the money doing something stupid like buying foreign companies and writing them off a decade later, like some banks have been known to do.


If that's true, then it is great news. Money that goes to salaried and hourly-paid employees eventually make their way into the economy. Money that goes to executives flows out of the country and hidden in shell companies, secretive overseas accounts and other tax evasions schemes.

If the bonus money is to be distributed to employees and management alike, then they should be distributed in equal proportion to their base salaries. Sometimes, hourly employees get peanuts while executives still get the biggest portions relative to their base pay.


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## Tostig (Nov 18, 2020)

ian said:


> Very happy with the banking system. We hardly need the Government to participate. Fine to regulate but not directly operate.
> 
> At the retail level I believe the biggest problem is Canadians themselves. Far too passive. If more people shopped for things like service charges or negotiated instead of blindly accepting bank T's and C's the banks might be forced to become more competitive when it comes to service charges and credit card offerings. Why wouldn't the banks keep increasing account fees and service fees when Canadians are apparently so willing to accept them? Certainly we complain, moan and groan...but that is the extent of it. A month later it is back to normal. It is a no brainer for the banks.


Government participation is in the form of labour laws. It's basically an honour system in which it's up to the victims to report violators. And that's where we really need whistle-blower support.

I just watched "Dirty Money" on Netflix yesterday. It profiled the cross-selling tactics of Wells Fargo. I'd like to think that the Canadian Bank Act would regulate things like that, but I don't know enough of the Bank Act. All I know is that the highly regulated Canadian banking system is what kept Canadian banks from suffering the same level as American and European Banks during the financial crisis of 2008.

Having said all that, I still am aware of the pressure each bank employee does face with monthly sales targets. That has been revealed in some CBC articles by anonymous bank employees.


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## sags (May 15, 2010)

I suspect front line employees at the banks shared very little of the $13 Billion in "bonuses" the banks awarded themselves.

With an average wage of $34,000 Canadian, those bank employees are barely above the $28,500 per year minimum wage in Ontario.

They would likely benefit from some extra money more than highly paid executives.

Given that the banks do it despite the bad optics, I think it reveals they really don't give a hoot about what people think of them as businesses.


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## ian (Jun 18, 2016)

Sags.....businesses pay based on skill level and availability of skills. They apply bonus, restricted stock units, stock options as a way of rewarding and a way of placing golden handcuffs on those they deem add above average value to the organization or those with talents, skills, knowledge, etc that would be difficult to replace and whose departure would have a negative overall impact on the company. Hence a teller may not get bonus but a divisional or regional VP or General Manager may. 

Not saying this is 'fair' but this his how the real world works and has always worked. Lower level employees may be rewarded, may get profit sharing but certainly not to the same degree. The optics may appear bad to some but senior management's role is to maximize shareholder return and shareholder value. This is a way of paying those individuals who directly impact it in a significant manner.

As a shareholder in a firm I certainly do not think there is bad optics if the company rewards/bonusses those employees who have surpassed expectations and overseen above average growth in revenue and profit. That is my expectation as a shareholder. It is not a co-op.


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## MrMatt (Dec 21, 2011)

ian said:


> Sags.....businesses pay based on skill level and availability of skills. They apply bonus, restricted stock units, stock options as a way of rewarding and a way of placing golden handcuffs on those they deem add above average value to the organization or those with talents, skills, knowledge, etc that would be difficult to replace and whose departure would have a negative overall impact on the company. Hence a teller may not get bonus but a divisional or regional VP or General Manager may.
> 
> Not saying this is 'fair' but this his how the real world works and has always worked. Lower level employees may be rewarded, may get profit sharing but certainly not to the same degree. The optics may appear bad to some but senior management's role is to maximize shareholder return and shareholder value. This is a way of paying those individuals who directly impact it in a significant manner.
> 
> As a shareholder in a firm I certainly do not think there is bad optics if the company rewards/bonusses those employees who have surpassed expectations and overseen above average growth in revenue and profit. That is my expectation as a shareholder. It is not a co-op.


I'll say it's fair.
What's unfair is to pay people more than they are worth. Similarly it's unfair to pay people less than they are worth.

The problem with sags and people like that is they don't know what the correct value, so they think their uninformed and uneducated opinion should be the metric, even though it isn't even their money.


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## Eder (Feb 16, 2011)

MrMatt said:


> 1. They shouldn't be government supported.
> 2. Government employees who excel, and have variable compensation in their contracts, should get bonuses.


Could you imagine the PM office getting performance bonuses? Pretty sure we'd get better people than insurance salesmen & drama teachers.


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## Tostig (Nov 18, 2020)

Eder said:


> Could you imagine the PM office getting performance bonuses? Pretty sure we'd get better people than insurance salesmen & drama teachers.


Well, we had an economist who didn't know what he was doing. His only work experience was being mail room clerk and then head whiner of a lobby group.


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## Money172375 (Jun 29, 2018)

ian said:


> Sags.....businesses pay based on skill level and availability of skills. They apply bonus, restricted stock units, stock options as a way of rewarding and a way of placing golden handcuffs on those they deem add above average value to the organization or those with talents, skills, knowledge, etc that would be difficult to replace and whose departure would have a negative overall impact on the company. Hence a teller may not get bonus but a divisional or regional VP or General Manager may.
> 
> Not saying this is 'fair' but this his how the real world works and has always worked. Lower level employees may be rewarded, may get profit sharing but certainly not to the same degree. The optics may appear bad to some but senior management's role is to maximize shareholder return and shareholder value. This is a way of paying those individuals who directly impact it in a significant manner.
> 
> As a shareholder in a firm I certainly do not think there is bad optics if the company rewards/bonusses those employees who have surpassed expectations and overseen above average growth in revenue and profit. That is my expectation as a shareholder. It is not a co-op.


every Employee (except those extremely rare situations where one was on a Performance Improvement plan) received a bonus in all my years at a bank. The more senior you were, the larger portion of your overall compensation was incentive based.

at the senior executive positions, I think much of their bonuses are deferred shared units, which I believe you need to keep for at least 2 years after you leave the company........I suppose this is to try and leave the company in better shape than you found it.


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## MrMatt (Dec 21, 2011)

Tostig said:


> Well, we had an economist who didn't know what he was doing. His only work experience was being mail room clerk and then head whiner of a lobby group.


Sorry, but pretty much everyone knows that Harper was one of the most competent and capable policy guys around.

You don't have to agree with his agenda, or politics, but to suggest that "he didn't know what he was doing", just shows your own ignorance.
Harper had basically no political charisma

As much as Trudeau is IMO an unethical, incompetent (in most areas) narcissist, he seems to be one of the most politically capable operators of my lifetime. 

I hate the politics of Jack Layton, but that guy just oozed likability.


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## sags (May 15, 2010)

Using that logic, the CEOs of Revera and other corporations owning long term homes are much more valuable than the PSW helping your grandparent bathe and dress. The confused logic in that demonstrates how thoroughly indoctrinated some people have become to the belief that honest work has no value.

Maybe the problem is how we quantify the value of work. Frankly, the top executives of a bank add more negative impact on my life than positive.


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## sags (May 15, 2010)

Conservatives can try to change Harper's history all they want, but Canadians aren't buying it.

Any politician who remotely resembles his policies, like Andrew Scheer and Erin O'Toole have no chance of winning an election.

Jason Kenney was wise to head to Alberta........the only place in Canada where he could win an election while still bearing the taint of Harperism.

But even Albertans are quickly growing tired of him. His poll numbers have dropped so much that the Liberals could win seats in Alberta in the next election.









Kenney's approval rating continues to slide as pandemic progresses: poll


The recently released results of a new poll suggests the majority of Canadian premiers are being lauded for their performance during the ongoing pandemic with noticeable exceptions in Alberta and Manitoba.



calgary.ctvnews.ca


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## Tostig (Nov 18, 2020)

MrMatt said:


> Sorry, but pretty much everyone knows that Harper was one of the most competent and capable policy guys around.
> 
> You don't have to agree with his agenda, or politics, but to suggest that "he didn't know what he was doing", just shows your own ignorance.



You chose to ignore the first act Harper did as PM. The Canada/US softwood lumber dispute had been in existence since confederation or earlier. But Harper gave it up right away by paying the $10billion to the US just to put the issue away for ten years.

When Harper left office, he left a whole bunch of loose ends that Trudeau had to close. And he did it successfully - and not without the same controversies that Harper would have faced.

Everybody thought Trudeau would be a push over especially when facing Trump. But it was Trudeau that put Trump's back against the wall four times and making Trump back down: twice with making Trump miss his NAFTA deadlines and twice on Trump's aluminum tariffs. AND with NAFTA, not only did Trudeau get to keep Chapter 19, he got rid of ISDS, got to keep the cultural exemption and got rid of the ratchet clause on energy.

What would Harper had done? Cave-in. Remember what Harper did with softwood lumber?

And finally, during the 2015 election campaign, in desperation, Harper started offering a smorgasbord of tax cuts that got real economists puzzled and wondering if Harper had any direction. And that's during Kenney's proposal for a hotline to report barbaric cultural practices.

Yeah, under Harper, anybody who disagreed with his policies were enemies of the state. And that included both environmental groups and indigenous groups.



MrMatt said:


> As much as Trudeau is IMO an unethical, incompetent (in most areas) narcissist, he seems to be one of the most politically capable operators of my lifetime.


Mike Duffy and Conservative Senate expenses by Harper appointees , election in-and-out campaign spending, lost documents of Maxime Bernier.

Political scandals are part of politics everywhere in the world. In Canada, Conservatives and Liberals share equal amounts. In fact, the Conservative Party is the father of the Canadian political scandal with the Pacific Scandal.


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## ian (Jun 18, 2016)

Tostig said:


> You chose to ignore the first act Harper did as PM. The Canada/US softwood lumber dispute had been in existence since confederation or earlier. But Harper gave it up right away by paying the $10billion to the US just to put the issue away for ten years.
> 
> When Harper left office, he left a whole bunch of loose ends that Trudeau had to close. And he did it successfully - and not without the same controversies that Harper would have faced.
> 
> ...


....not to mention that phoney Pentacostal Preacher Don Meredith who called himself DR. but his degrees were all from mail order degree mills. He had to resign for his relationship with a 16 girl. Not to mention the settlements that the Gov't is paying to multiple former employees for sexual harassment.


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## Money172375 (Jun 29, 2018)

Think we need a new thread....


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## MrMatt (Dec 21, 2011)

sags said:


> Using that logic, the CEOs of Revera and other corporations owning long term homes are much more valuable than the PSW helping your grandparent bathe and dress. The confused logic in that demonstrates how thoroughly indoctrinated some people have become to the belief that honest work has no value.
> 
> Maybe the problem is how we quantify the value of work. Frankly, the top executives of a bank add more negative impact on my life than positive.


Sorry, honest work does have value.

We quantify the value of work by how much people are willing to pay them to do that work.

Do you propose a different method? Some person takes all your money and divides it up however they choose?

As flawed as our current system is, and it is flawed in many ways, I think letting the people who do work and create value, trading that to others who do valuable work for them, is the most fair system.

When I do work, it should be up to me how I distribute the fruit of my labour.


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## sags (May 15, 2010)

There is nothing fair or equitable in the current system.

When bankers are more highly valued than brain surgeons.........we have a big problem.


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## james4beach (Nov 15, 2012)

sags said:


> There is nothing fair or equitable in the current system.
> 
> When bankers are more highly valued than brain surgeons.........we have a big problem.


And these bankers aren't even real capitalists. Now if they were actual capitalists, who took _their own_ risks and made their own profits, I would respect that more.

But these guys aren't capitalists. They are pseudo-government employees supported by the public back-stop. This gives them an unfair advantage (no risk of failure) and they pay themselves as if they were real capitalists. In reality, they are stealing from the rest of Canadians.

The public assumes their risk, and they get to take home all the profits.


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## MrMatt (Dec 21, 2011)

sags said:


> There is nothing fair or equitable in the current system.
> 
> When bankers are more highly valued than brain surgeons.........we have a big problem.


Why?
What if that banker figures out how to finance and build the hospital, so that 10 brain surgeons can do their job?

Oh wait, you don't see the value in what other people do.


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## sags (May 15, 2010)

Bankers borrow the money from the central bank at low rates to lend it to a government at higher rates to build the hospital.

It is good work if you can get it. We would all be rich if we could do that.

Just curious.........how do you think the banking system works ?


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## MrMatt (Dec 21, 2011)

sags said:


> Bankers borrow the money from the central bank at low rates to lend it to a government at higher rates to build the hospital.
> 
> It is good work if you can get it. We would all be rich if we could do that.
> 
> Just curious.........how do you think the banking system works ?


Wow, do you really think it works like that?

At times I almost think you're a parody account.


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## ian (Jun 18, 2016)

I believe what the banks pay out in bonus, and to which employees, is entirely their business and the business of their shareholders. And as a shareholder I do not care about bonus money. I care about dividends, profit, stock price, and the increase in the stock price.


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## cainvest (May 1, 2013)

ian said:


> I believe what the banks pay out in bonus, and to which employees, is entirely their business and the business of their shareholders. And as a shareholder I do not care about bonus money. I care about dividends, profit, stock price, and the increase in the stock price.


And if someone has issues with banks they certainly can avoid buying their stocks ...


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## james4beach (Nov 15, 2012)

ian said:


> I believe what the banks pay out in bonus, and to which employees, is entirely their business and the business of their shareholders. And as a shareholder I do not care about bonus money. I care about dividends, profit, stock price, and the increase in the stock price.


It's not entirely their business. They didn't take the fundamental risks of their business.

If you want it to be "entirely their business" then we have to end all government support, including CDIC deposit insurance and bail-out assistance. We could do that and yes, then it would be entirely your business how to deal with profits.

There are many other businesses in Canada who don't have the public rescuing them whenever they do badly. Those are situations where it's entirely their business and their shareholders.


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## james4beach (Nov 15, 2012)

cainvest said:


> And if someone has issues with banks they certainly can avoid buying their stocks ...


That won't let them avoid involvement. Every Canadian supports the big banks as a taxpayer and stakeholder in the CAD. All of us (the public) are forced to support these institutions by assuming their risks, especially when they mismanage their businesses.

Why is it that other businesses in Canada have to suffer failure, whereas the banks get special treatment and support from the public? This is a corruption of capitalism.

Why should Cineplex have to suffer from poor business conditions? If they were a big bank, they would have unlimited billions of $ of special liquidity support, without any requirement to disclose it to shareholders, and would also have government departments secretly buying their troubled assets. So why doesn't Cineplex get to have that?


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## Money172375 (Jun 29, 2018)

james4beach said:


> That won't let them avoid involvement. Every Canadian supports the big banks as a taxpayer and stakeholder in the CAD. All of us (the public) are forced to support these institutions by assuming their risks, especially when they mismanage their businesses.
> 
> Why is it that other businesses in Canada have to suffer failure, whereas the banks get special treatment and support from the public? This is a corruption of capitalism.
> 
> Why should Cineplex have to suffer from poor business conditions? If they were a big bank, they would have unlimited billions of $ of special liquidity support, without any requirement to disclose it to shareholders, and would also have government departments secretly buying their troubled assets. So why doesn't Cineplex get to have that?


I haven’t given this any thought at all....perhaps there are essential businesses and non-essential businesses. I’m still waiting for the airline bailout which I think will come. And there will inevitably be government sponsored businesses that evolve due to covid (vaccine production, Canadian made PPE). I think you’ll see home grown businesses sprout up to keep key manufacturing within Canada. Perhaps we SHOULD be supporting Canadian businesses more......feels like we’ve neglected aerospace (Avro) and multiple tech companies over the years. Maybe we shouldn’t have let them fail?  Just spitballing.......haven’t given this more than 10 seconds thought.


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## james4beach (Nov 15, 2012)

Money172375 said:


> I haven’t given this any thought at all....perhaps there are essential businesses and non-essential businesses. I’m still waiting for the airline bailout which I think will come. And there will inevitably be government sponsored businesses that evolve due to covid (vaccine production, Canadian made PPE). I think you’ll see home grown businesses sprout up to keep key manufacturing within Canada. Perhaps we SHOULD be supporting Canadian businesses more......feels like we’ve neglected aerospace (Avro) and multiple tech companies over the years. Maybe we shouldn’t have let them fail? Just spitballing.......haven’t given this more than 10 seconds thought.


Yes and maybe we should support all Canadian business.

I run a business too. I want a limitless line of liquidity so that I can't possibly become insolvent... where do I sign up?

And by the way the essential vs non-essential matter is exactly why we have to break up the banks to separate investment banking. Their highly leveraged capital markets divisions (hedge fund operations) are NOT essential banking services.

We can restructure the Big Six banks and keep only their primary, traditional depository banking. Make this an essential service, and that would justify government support and taxpayer assistance.

But their investment banking / hedge fund divisions are non essential, and should be left to operate on their own and take *their own* risk, not the taxpayer's.


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## Money172375 (Jun 29, 2018)

james4beach said:


> Yes and maybe we should support all Canadian business.
> 
> I run a business too. I want a limitless line of liquidity so that I can't possibly become insolvent... where do I sign up?


You’re not too big to fail.......yet.


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## ian (Jun 18, 2016)

CDIC deposit insurance is NOT funded by the public. It is entirely funded by member institutions. I cannot remember the last time a Canadian bank was bailed out.

There are lots of Canadian business that are getting bailed out directly or indirectly, receiving local, provincial tax write-offs and outright grants, federal grants for locating in certain areas, and enhanced amortization for tax purposes.

Does this mean that we should have a say on the amount each of these firms pay in bonuses and how they distribute those bonuses???


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## james4beach (Nov 15, 2012)

Money172375 said:


> You’re not too big to fail.......yet.


Another reason the government needs to start busting up the banks. Break them apart into smaller pieces, so they can't hold this "too big to fail" gun to our heads.

Breaking up monopolies with unfair advantages is actually an important part of capitalism. The USA has been doing this for a long time, and it helps ensure fair and functional capitalism. Once companies get too large, that they gain too large and unfair an advantage, the government has to start breaking them up.


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## Money172375 (Jun 29, 2018)

I think the banks are somewhat unique in that they are structurally important. They’re one of the largest, if not the largest, employers in Canada by a large margin.


james4beach said:


> Another reason the government needs to start busting up the banks. Break them apart into smaller pieces, so they can't hold this "too big to fail" gun to our heads.
> 
> Breaking up monopolies with unfair advantages is actually an important part of capitalism. The USA has been doing this for a long time, and it helps ensure fair and functional capitalism. Once companies get too large, that they gain too large and unfair an advantage, the government has to start breaking them up.


government could let a bank fail, but it would probably be purchased by one of the others first and the net result would be one less bank with less consumer choice and more monopolistic behaviour. It might actually be better to support one if it got that bad.

do you feel this government support has always been there or since 2008?


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## Money172375 (Jun 29, 2018)

james4beach said:


> Another reason the government needs to start busting up the banks. Break them apart into smaller pieces, so they can't hold this "too big to fail" gun to our heads.
> 
> Breaking up monopolies with unfair advantages is actually an important part of capitalism. The USA has been doing this for a long time, and it helps ensure fair and functional capitalism. Once companies get too large, that they gain too large and unfair an advantage, the government has to start breaking them up.


I’m waiting for this to happen in the US. when‘s The last time there was a major break-up? Early 1900s?


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## Money172375 (Jun 29, 2018)

I hadn’t see this story before....looks like Air Canada got a lot of money already...



https://www.cbc.ca/news/politics/air-canada-492-million-in-wage-subsidy-covid-19-1.5824950


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## fireseeker (Jul 24, 2017)

Money172375 said:


> I’m waiting for this to happen in the US. when‘s The last time there was a major break-up? Early 1900s?


How quickly people forget.

The bust-up of Bell in the 1980s was huge news. It transformed the telecommunications industry and unleashed enormous innovation and enterprise — far more than was evident in sclerotic Ma Bell. It sowed the seeds for the late 20th century tech revolution.

I think this is James’s point: Giant quasi-monopolies are bad for capitalism. If you believe in economic competition then you want the ref to step in when one team has nine skaters on the ice.

Wired mag on Bell breakup


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## cainvest (May 1, 2013)

james4beach said:


> That won't let them avoid involvement. Every Canadian supports the big banks as a taxpayer and stakeholder in the CAD. All of us (the public) are forced to support these institutions by assuming their risks, especially when they mismanage their businesses.
> 
> Why is it that other businesses in Canada have to suffer failure, whereas the banks get special treatment and support from the public? This is a corruption of capitalism.
> 
> Why should Cineplex have to suffer from poor business conditions? If they were a big bank, they would have unlimited billions of $ of special liquidity support, without any requirement to disclose it to shareholders, and would also have government departments secretly buying their troubled assets. So why doesn't Cineplex get to have that?


Others have pointed out reasons why above. Canada is supporting other businesses right now as well as people. Yes banks are a special concern to the government and remember they need to follow special rules as well so they are resilient to failure. Also, nobody is stopping other banks, like credit unions, from becoming large are they?

BTW, which is worse for people ... having a major bank fail or Cineplex go down?


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## james4beach (Nov 15, 2012)

cainvest said:


> Others have pointed out reasons why above. Canada is supporting other businesses right now as well as people. Yes banks are a special concern to the government and remember they need to follow special rules as well so they are resilient to failure. Also, nobody is stopping other banks, like credit unions, from becoming large are they?


I didn't say the banks shouldn't be supported. I said that their aggressive and highly leveraged investment banking (hedge fund) divisions should be forced to separate out, so that what remains -- traditional banking -- can be supported.

In the current structure, the federal government is forced to support the large parent bank meaning that the investment bank is supported too.

I don't have a problem with government supporting essential businesses. But the investment banks (which are more or less hedge funds) are not 'essential businesses'. They should be standalone firms that take their own risks, which is how things used to be *before the 1990s*.

The solution is to strip the investment banking divisions out of these giant banks, and continue to have government support (and strong regulation) for the core banking. This is what the USA did in the 1940s and it worked tremendously well, creating an environment that lasted 60 years with excellent banking stability, and leaving investment banks to operate as standalone businesses that couldn't benefit from taxpayer assistance.


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## Money172375 (Jun 29, 2018)

fireseeker said:


> How quickly people forget.
> 
> The bust-up of Bell in the 1980s was huge news. It transformed the telecommunications industry and unleashed enormous innovation and enterprise — far more than was evident in sclerotic Ma Bell. It sowed the seeds for the late 20th century tech revolution.
> 
> ...


Thanks for the history lesson. I was playing in the sandbox in ‘82.......I guess they skipped the Bell story in Law class.


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## cainvest (May 1, 2013)

james4beach said:


> The solution is to strip the investment banking divisions out of these giant banks, and continue to have government support (and strong regulation) for the core banking. This is what the USA did in the 1940s and it worked tremendously well, creating an environment that lasted 60 years with excellent banking stability, and leaving investment banks to operate as standalone businesses that couldn't benefit from taxpayer assistance.


Just not sure what the benefits of that would be, for the banks or people. Obviously the 1933 act is gone for a reason right?


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## MrMatt (Dec 21, 2011)

james4beach said:


> I didn't say the banks shouldn't be supported. I said that their aggressive and highly leveraged investment banking (hedge fund) divisions should be forced to separate out, so that what remains -- traditional banking -- can be supported.
> 
> In the current structure, the federal government is forced to support the large parent bank meaning that the investment bank is supported too.


Well, the aren't forced, they could simply strip them out as a condition of the bailout.

Plus if the investment bank crashes, that could cause problems.
maybe it will just take down the bank, maybe it will take down the capital markets.


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## nathan79 (Feb 21, 2011)

ian said:


> I cannot remember the last time a Canadian bank was bailed out.


That's because we gave them so much "liquidity support" that they didn't need one. When you dig into it, it starts to look an awful lot like a bailout.

During the 2008-2010 financial crisis, Canadian banks received 114 billion dollars in liquidity support through various programs. A substantial portion of this was through the Insured Mortgage Purchase Plan (IMPP), whereby the CMHC purchased 69 billion dollars worth of insured mortgages from the banks. They brought back the IMPP again during COVID-19. This allowed banks to keep lending at low rates, and the result was the housing bubble continued inflating despite a recession.


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## james4beach (Nov 15, 2012)

Several of our big banks were all bailed out in 2008-2009. It wasn't just central bank overnight lending support.

There were special central bank facilities and also special (secret) loans through the government, plus extra CMHC programs. Even the Federal Reserve had secret emergency bailout facilities that weren't even known about until Bloomberg sued them several years later. After fighting through the Supreme Court, the records were released and Bloomberg discovered that the US Fed had given secret emergency loans to many banks, including Canada's Big Five.

I can't believe so many people are ignorant of these details just a few years later.

The Canadian banks almost collapsed, got amazing amounts of public/federal support (from both Canada and US) ... and now they are paying billions of dollars of bonuses. It's sickening. We've got to either nationalize these banks or dissolve them into smaller banks, eliminating their investment bank divisions. Otherwise they will do this again every 10-20 years and each time (as shown in this thread) everyone will forget the details.

This isn't capitalism and no, the banks should not get to "keep" the profits. They did not earn them. They are back stopped and bailed out by the public.


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## Money172375 (Jun 29, 2018)

james4beach said:


> Several of our big banks were all bailed out in 2008-2009. It wasn't just central bank overnight lending support.
> 
> There were special central bank facilities and also special (secret) loans through the government, plus extra CMHC programs. Even the Federal Reserve had secret emergency bailout facilities that weren't even known about until Bloomberg sued them several years later. After fighting through the Supreme Court, the records were released and Bloomberg discovered that the US Fed had given secret emergency loans to many banks, including Canada's Big Five.
> 
> ...


I don’t believe we operate under pure capitalism in Canada. Or the US for that matter. It’s a hybrid system with definite socialist overtones. 

I don’t think people forgot or are ignorant......they just don’t care.....and many other sectors receive money too.......in fact, I would guess, that most people support these efforts..........what would things looks like if the banking, auto, airline, energy sectors failed.....? They get headlines, but if you’re in an impacted industry, you want the bailout.

bonuses help to keep quality employees........I would have left TD much sooner without the incentive plans. and perhaps, and I don’t know, banking is far more integrated than other industries? From what I recall, TD exited the sub-prime business very early cause the execs didn’t understand it or couldn’t quantify the risk.........but because of such global interconnectedness, one or two company failures can bring down an industry.

and I certainly remembering talking to a senior executive a few years after ‘08....and he said nobody will understand how close the entire system came to failing apart. While the headlines made the news, the magnitude of it all, was never understood or appreciated.

with all that being said, I’d certainly support a little more transparency for government support.


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## cainvest (May 1, 2013)

james4beach said:


> I can't believe so many people are ignorant of these details just a few years later.
> 
> The Canadian banks almost collapsed, got amazing amounts of public/federal support (from both Canada and US) ... and now they are paying billions of dollars of bonuses. It's sickening. We've got to either nationalize these banks or dissolve them into smaller banks, eliminating their investment bank divisions. Otherwise they will do this again every 10-20 years and each time (as shown in this thread) everyone will forget the details.
> 
> This isn't capitalism and no, the banks should not get to "keep" the profits. They did not earn them. They are back stopped and bailed out by the public.


Not sure what caused your sudden hatered for Canadian banks but all our critical systems in Canada should have some back-stop protections don't you think? Sure, maybe they should have given out the huge bonuses and keep some for protection in the future. Also, after 2010 didn't the banking regulations change to help address future issues that might occur?


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## undersc0re (Oct 7, 2017)

Does a bank get bailed out of a failed mortgage (insured mortgage) by someone like cmhc? Who funds cmhc...is cmhc fully funded by the consumer who buys the home? Anyone know what percentage of homes in Canada are insured by firms such as cmhc?


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## james4beach (Nov 15, 2012)

cainvest said:


> Not sure what caused your sudden hatered for Canadian banks but all our critical systems in Canada should have some back-stop protections don't you think? Sure, maybe they should have given out the huge bonuses and keep some for protection in the future. Also, after 2010 didn't the banking regulations change to help address future issues that might occur?


I don't know why you call it hatred. It's a very straightforward matter: traditional depository banking is an essential service. Investment banking is not.

Should we back stop the essential banking? Yes of course. Strip away the investment banking / high risk activities, then back-stop the regular bank. This is what we used to have before the 1990s.

Taxpayers should be outraged that we are funding aggressive and extremely well paid investment bankers, as they gamble and speculate in markets. They are exploiting us, the public. We take all the risk, and these guys reap the reward. How is that fair?


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## cainvest (May 1, 2013)

james4beach said:


> I don't know why you call it hatred. It's a very straightforward matter: traditional depository banking is an essential service. Investment banking is not.
> 
> Should we back stop the essential banking? Yes of course. Strip away the investment banking / high risk activities, then back-stop the regular bank. This is what we used to have before the 1990s.
> 
> Taxpayers should be outraged that we are funding aggressive and extremely well paid investment bankers, as they gamble and speculate in markets. They are exploiting us, the public. We take all the risk, and these guys reap the reward. How is that fair?


Re: exploiting ... was any of the 2010 backstopped money not paid back? What real risk was taken by the public?


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## james4beach (Nov 15, 2012)

cainvest said:


> Re: exploiting ... was any of the 2010 backstopped money not paid back? What real risk was taken by the public?


I don't like this argument, that just because 'it worked out' that there was no harm to the public.

It's not right for the public to repeatedly assume the risks of these banks. "Risk-taking" is not a free activity that comes without consequences. We could have seen loans defaulted on (huge cost to Canada's treasury) or might have had to print huge amounts of money, causing devaluation and stealing wealth from all Canadians. These things didn't happen, but they could have.

If it's so harmless for the public to take risks, then ALL businesses of all shapes and sizes should have limitless loan facilities with the government. How would you like that?

There are other non-bank hedge funds on Bay Street. By the logic you're using, some mid sized hedge fund should go ahead and take massively stupid risks, and then if they suffer enormous losses, borrows billions of $ from the government... why don't we let hedge funds do that? I'm sure they will pay it back.

The Big Five banks took massively stupid risks leading up to 2008, and are back to the same activities, again taking massively stupid risks. They are operating with high leverage as before. And they do it because they know that @cainvest will happily fork over the money if it all goes south.


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## ian (Jun 18, 2016)

Not certain about the currently percentage but it used to be that the banks insisted on CMHC insurance for any home mortgaged at over 80 or 85 percent. The CMHC insurance premium is paid by the home owner...tacked on to the mortgage total. On our first home we struggled to get our downpayment just below the point at which CMHC insurance was required by the bank. As I recall the insurance is not cheap....maybe 1 percent or so.

Absolutely no idea how many homes are CMHC insured. Their web site probably has the answer If I am not mistaken CMHC now offloads some of that liability to other insurers.


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## cainvest (May 1, 2013)

james4beach said:


> I don't like this argument, that just because 'it worked out' that there was no harm to the public.
> 
> It's not right for the public to repeatedly assume the risks of these banks. "Risk-taking" is not a free activity that comes without consequences. We could have seen loans defaulted on (huge cost to Canada's treasury) or might have had to print huge amounts of money, causing devaluation and stealing wealth from all Canadians. These things didn't happen, but they could have.


Yes, could have, might have ... but didn't. I do agree that additional restrictions were needed and some changes where implemented to reduce risk since 2010. Is it enough? .... I don't know but it was a move in the right direction. Maybe push the government for tighter regulations and have banks keep more liquid assets around?



james4beach said:


> If it's so harmless for the public to take risks, then ALL businesses of all shapes and sizes should have limitless loan facilities with the government. How would you like that?
> 
> There are other non-bank hedge funds on Bay Street. By the logic you're using, some mid sized hedge fund should go ahead and take massively stupid risks, and then if they suffer enormous losses, borrows billions of $ from the government... why don't we let hedge funds do that? I'm sure they will pay it back.


Other companies have received government "bailout" money in the past but of course, not all. They have to weigh out the positive/negative of doing such actions. Point being, it's not just banks who can receive government funding so they don't fail.



james4beach said:


> They are operating with high leverage as before.


Are they? Didn't the leverage amounts get changed after 2010?


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## ian (Jun 18, 2016)

James...when was the last time that a Canadian bank got bailed out or failed????


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## james4beach (Nov 15, 2012)

ian said:


> James...when was the last time that a Canadian bank got bailed out or failed????


They got bailed out in 2008, just 12 years ago. The Canadian banks used large emergency loans from the Bank of Canada, Federal Reserve (secret loans that were concealed until lawsuits from Bloomberg), plus extra CMHC assistance.

I claim they were bailed out. Their lobbyists claim they were not.

Banks normally borrow money overnight from the central bank or at the discount window. These are the goodies that *we have already agreed that the banks get to use*. But in 2008-2009, they needed far more money than just this. So they started digging into additional special loan mechanisms and federal support. The US Federal Reserve provided huge amounts of emergency loans to the Big Five, but concealed the activity.

These were back-room deals. They ran powerful PR campaigns and had government ministers repeat the lie that they were just fine during the crisis. The banks were not just fine; they used huge amounts of public/federal support to stay solvent.

The banks did not fail. You might not even want to call it a bail out. However, it was *undeniably* an absolutely massive amount of total stimulus and special/emergency lending, at a level the Canadian banks have never before received in history. And this kind of lending and support does have consequences for the public... it's not free.


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## ian (Jun 18, 2016)

Did the banks get Federal bail out money, or do they get guaranteed loans. There is a huge difference. Were the loans repaid, forgiven, defaulted on?


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## james4beach (Nov 15, 2012)

I get it, @ian , you don't have a problem with the banks getting special emergency assistance.

Myself, I do have a problem with. It puts all of Canada on the hook when they mismanage their business and I think this is inappropriate.

Do you think the public should assume the risk for any large company who runs their business into the ground, or is this a special perk that you think only banks deserve?


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## sags (May 15, 2010)

Unbelievable that 2 LTC homes received $157 million in COVID support money and then paid out $74 million in dividends to shareholders.

Families say that despite the government support, the quality of care has deteriorated.

Mixing capitalism with healthcare (privatization) leads to poor outcomes for those affected.



https://www.cbc.ca/news/canada/toronto/big-spend-long-term-care-aid-dividends-1.5832941


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## sags (May 15, 2010)

This is appalling care. Just leave them there in pain, turn out the light and shut the door.

Turn of the emergency call button and tell the poor resident not to call again ? 

They get money from the government and give it to shareholders, abuse the patients, and then get protected from liability.......ain't capitalism great.


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## Mortgage u/w (Feb 6, 2014)

james4beach said:


> I get it, @ian , you don't have a problem with the banks getting special emergency assistance.
> 
> Myself, I do have a problem with. It puts all of Canada on the hook when they mismanage their business and I think this is inappropriate.
> 
> Do you think the public should assume the risk for any large company who runs their business into the ground, or is this a special perk that you think only banks deserve?


The difference is the banks hold YOUR money. I would say that yeah, I want my government step in and protect my assets.


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## MrMatt (Dec 21, 2011)

Mortgage u/w said:


> The difference is the banks hold YOUR money. I would say that yeah, I want my government step in and protect my assets.


Not an issue, bank deposits are insured.That money was never at risk.

The issue is if the government should backstop the investing activities of the bank.


But this is where it gets complicated.
Completely made up list of priorities, but I think it shows a point
Should the government backstop the bank to.
1. Support individual personal bank deposits (ie savings accounts) and access to those accounts (ie branches)
2. Commercial banking services (deposits etc)
3. Residential mortgages
4. Commercial mortgages
5. Personal loans.
6. Commercial investment loans.
7. Higher end stock & equity investments etc.

I think everyone sees how 1 & 2 are essential to the economy. and there is a clear public benefit.

Somewhere around 7 I think there should be a cut off.

Below that I think it's important that Businesses and people have access to "reasonable" credit.
Lots of discussion to have here.

That being said, I honestly dont' understand how bad a failure at 7+ is.


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## cainvest (May 1, 2013)

MrMatt said:


> Not an issue, bank deposits are insured.That money was never at risk.


Not all money is though, CDIC has limits.


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## MrMatt (Dec 21, 2011)

cainvest said:


> Not all money is though, CDIC has limits.


True, and I think CDIC limits should be raised. 
I really don't see much reason for a limit at all. I'd assume that the "insurance fee" would be based on the amount deposited.


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## Mortgage u/w (Feb 6, 2014)

Who will back CDIC if they run out of money to reimburse the banks they 'insured'?


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## MrMatt (Dec 21, 2011)

Mortgage u/w said:


> Who will back CDIC if they run out of money to reimburse the banks they 'insured'?


The Federal Government will backstop CDIC.

CDIC failure would be catastrophic, economically and politically.


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## nathan79 (Feb 21, 2011)

MrMatt said:


> Below that I think it's important that Businesses and people have access to "reasonable" credit.
> Lots of discussion to have here.


I wouldn't worry about mortgages and loans as those would be taken over by another institution in the case of a bank failure. In fact your mortgage might already have been sold off without you even knowing.

If the banks were forced to keep adequate reserves they wouldn't need all of this liquidity support. It seems like many people still believe that banks are required to keep a 10% reserve, but there is no reserve requirement in Canada -- it was removed back in the 90's. It's left up to banks how much reserves they want to keep, and predictably they keep next to none, since they know they can always rely on the government backstop.


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## james4beach (Nov 15, 2012)

Mortgage u/w said:


> The difference is the banks hold YOUR money. I would say that yeah, I want my government step in and protect my assets.


Only the depository bank (traditional bank) holds your money.

The Big Five banks can be seen as two different things operating under the same umbrella: a traditional bank (deposits & loans) and then investment banking (capital markets, speculation / hedge fund).

It's incorrect to say that "we need banks" and that they are critical. Only the traditional bank is critical and worth saving.

This is why the investment banking divisions have to be broken up and separated out. We should then continue to back-stop and assist the traditional bank, which is exactly what the 1930s legislation in the US did.


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## MrMatt (Dec 21, 2011)

james4beach said:


> Only the depository bank (traditional bank) holds your money.
> 
> The Big Five banks can be seen as two different things operating under the same umbrella: a traditional bank (deposits & loans) and then investment banking (capital markets, speculation / hedge fund).
> 
> ...


I agree and disagree.
Investment banking is essential, however I think it should be separated out and allowed to fail.


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## james4beach (Nov 15, 2012)

MrMatt said:


> I agree and disagree.
> Investment banking is essential, however I think it should be separated out and allowed to fail.


Yes, I'd like it separated out so that they can be real capitalists like they pretend to be.

That's how it was in the US for nearly 70 years during the greatest economic expansion in world history and the hey day of Wall Street. It obviously works just fine to have risk-taking investment banking in separate firms that are allowed to fail. Then they can pay out billion $ bonuses for all I care ... when _I'm not on the hook_ for their losses.


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## Gator13 (Jan 5, 2020)

While Canada's banking system is not perfect, I am fine with how it currently operates. The Canadian banking system has provided stability and security, in the general sense, during harsh economic times. The bank stocks also provide a lot of dividend income and capital growth to Canadians which adds value.

I would start with the government itself if I wanted to look for the single biggest institution I am on the hook for. IMHO


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## Just a Guy (Mar 27, 2012)

True dope and the rest of the government got a raise despite spending 400B more than they brought in. That’s not counting the kickbacks he didn’t get caught getting, of course I don’t see people complaining about that.


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## james4beach (Nov 15, 2012)

Vethermond said:


> The Canadian banking system is a mess like any other due to the central bank's monopoly on printing money. I have zero faith in such a system.


It's going to be hard to invest if you have no faith in the core of the system.

How do you invest or store your money, then?


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