The Director-General of the Confederation of British Industry (CBI) has called for a sense of perspective to be injected into the current debate about bumper City bonuses and the rise of private equity deals.
Richard Lambert said financial markets are not “a zero sum game” but generate major financial benefits for the UK. He described the bonus system, which has seen some City workers reap multimillion pound windfalls, as profit-share schemes which reward staff during the good times but not in the lean ones.
He also praised private equity houses and said they offer a compelling model to improve business performance which has seen companies return to the stock markets in far more robust shape than when they were previously listed.
Lambert acknowledged concerns about the impact of the vast wealth in the City of London on social cohesion in the UK. Many people feel uncomfortable about the disparity between the salaries of a few high-fliers and the large numbers remaining on low incomes, he said. But the answer is not heavy-handed regulation or attacks on the City which risk driving talent overseas.