Banks Will Use Pay Czars To Crush Out Competition

This is a very interesting article about how the Banks will use the new ”Pay Czar” to get rid of the competition.

We all know that businesses love regulations that allow them to push out competitors and create barriers to entry for upstarts. Phillip Morris, for instance, is a huge supporter of bans of tobacco advertising because it already control most of the market and wants to be sure that rivals don’t gain market share.

The moves to put pay caps on financial executives are also being coopted in anti-competitive ways by banks. The Financial Times reports that JPMorgan has asked the UK’sFinancial Services Authority to review a multi-million pound deal offered to lure one of its star proprietary traders by rival Barclays Capital.

From the FT:

News that BarCap has offered Todd Edgar, who specialises in trading commodities, and four other members of his team as much as £30m in cash and stock to join the bank will trigger fresh claims that it is back to “business as usual” in the City, less than a year after the near-collapse of the UK banking system.

There are more ways to “retain talent” than just paying a lot for it. You can get the government to stop anyone else from paying for it.

http://www.businessinsider.com/banks-will-use-pay-czars-to-crush-out-competition-2009-8

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