Bank Chief: Savers should lose in bank failure

We tend to agree with Peter Sands, chief executive of Standard Chartered, who said "that people with savings above any sum guaranteed by law — £50,000 in the UK — should be hit with other providers of capital if a bank fails" (The Times). But we think that a small - but important - group that was left out in the proposals were the senior executives of the banks. Having their money at stake did not stop senior management of Bear Stearns and Lehman to run their companies into the ground but in this post-crunch area it would certainly be a useful addition to the armoury of regulators if managements would have more at stake than just their jobs in case a bank should get into trouble. Given the vast amounts of bonuses, share options and other perks the compensation beyond a reasonable basic salary should be mandatorily vested during their employment and for a minimum period after they leave the bank.