FX bonus conundrum solved
In the UK, we apparently have a socialist government that has, it is reported, mastered the dark arts of spin. I believe it is the same in other countries. So the FX industry has to realise that while it may feel aggrieved about the public assault on its remuneration structure, moaning will not ease the situation.
It has the mainstream media railing against its apparent excesses and has little or no support from politicians. The bonus culture, if not yet dead, looks at least half-buried. The industry has to come up with a ‘fair’ – and, importantly, seen to be fair – scheme to reward market participants.
The ruminations of my old mucker got me thinking. Ostensibly, I took a huge pay cut to join Midland Bank as a junior trader back in 1985. However, my salary was boosted by a subsidised mortgage and, more importantly, by overtime. And that’s my answer for the industry.
FX traders, at least in the EU, waive their rights to working a 35-hour week. They should tear those waivers up. As most of them invariably do 11-hours days, they will accrue around 20-hours of overtime a week. I’m sure the UK government will agree that these workers should be rewarded for their long labours; the most acceptable way would be to reintroduce overtime.
I can’t see any problem with paying out on the basis of triple time and perhaps more for weekends and bank holidays. That would instantly increase traders’ remuneration by around 150%.