These are three of the ideas to stop another financial crisis.
• Safer lending would stop another financial crisis.
• The government should set stricter rules for banks which would prevent another financial crisis.
And finally, our idea...
BANKERS GET PAID DIFFERENTLY, GETTING REWARDED FOR BEING SAFER WITH MONEY, RATHER THAN TAKING RISKS.
I wouldn't say this would be the idea I would suggest at the table (the table which people gather round to explain their ideas to secure and develop our financial system and other money related discussions) but I definitely find it the most interesting.
I believe that our country and the Earth need to change at some point. So change would be a good idea if we want to find a way to stop another financial crisis. One person in my group, had the idea that bankers could get paid over the course of a couple of years. They could also get paid for their balanced amount of safe and risky work over that period time. Of course, you can never get SOME people to behave or direct their actions in particular ways, but most people would see the opportunity to earn money, and keep their business safe at the same time. After all, banks are businesses!
What I see in the other ideas!
I think that every idea is great, but some solutions don't REALLY solve the dilemma. We COULD encourage safer lending, but then banks wouldn't make much money at all. That leads us to another financial crisis, and we DON'T want THAT. The government could set stricter rules for banks, but then banks wouldn't have freedom in making money, being TOO safe, and we all know where that could end up. Of course, bankers getting paid differently WOULD affect everyone, but the idea that the people in my group had, splits halfway from extreme to not enough, making the perfect solution. The downside is people (bankers) won't take the opportunity, and another financial crisis is only POSSIBLE. This is better than a high possibility. Emma from the Bank of England came to our school, and said that there could be a financial crisis at any time. So lowering the possibilities is what WE need to do.
William works at the bank. He has someone wanting to buy a big house, and needing lots of money for it. The person calling also needs to repay his friend for borrowing some money to buy a need watch. He has been at lots of different jobs, not working very hard and no friends. He on his own in a small flat with his unwell parents.
I don't think that this needs much thought, apart from common sense. Personally, I would NOT give money to this person. You may take pity on him, and feel sorry for him fighting to look after his unwell parents. But bankers shouldn't have feelings towards their business - as long as their job goes well they should be happy. William could get rewarded for that, but a little time later. Allowing him to get rewarded for other deals like this.
The next week, William gets a call by someone who wants to start a business. He already has a high paying job, an average size family, and lots of GOOD reports from his old company. The business is a GOOD idea and e ALREADY has MANY people wanting to join up.
This is a deal I would give. Of course you can never be too careful, but the bank have to take some risks. By the end of the year, William would've turned down and accepted MANY more offers, meaning he would make good money for his bank. Therefore, I think he should get paid at the end of two years.
It only takes common sense!
(Personally, I think that if you don't have common sense you shouldn't be a banker!)
Therefore, I think that bankers should get paid differently,over the course of two or three years. I would love to hear what you think!
(Also, if you could work out how many deals William would make over the course of two years, and the number he turned down, I would be very impressed. That is, if he keeps up two offers a week!)