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Thread: EU seeks to cap bankers’ bonuses: is this the right thing to do?

  1. #1

    Default EU seeks to cap bankers’ bonuses: is this the right thing to do?

    It appears – well, according to this RTE article – that the EU is getting closer to a point where caps will be put on the amount of money bankers can be paid in bonuses.

    From the article:

    European lawmakers see a cap - possibly limiting bonuses to double base salary - as the only way to rein in runaway pay, reduce incentives for risk and make banks safer. Talks between EU country ambassadors about the rules broke up last week amid clashes over how far to go. But tougher rules seem certain.

    "There will definitely be a bonus cap," said one official. "It's just a question of how much."
    Should politicians be able to set limits on what bankers can be paid, if they are working for private institutions?

    Could this lead to a brain drain from European banks?

    Could this have the opposite effect, and result in less-competent people working in banking?

    Rather than targeting bonus payments, should it not be enough to ensure banks are adequately regulated, that those individuals regulating them are paid salaries that are attractive to people with good banking experience, and that if banks fail, they are allowed to fail?

    Is this proposal a populist measure or does it make sense?

    Are there other sectors which should have pay-caps imposed on them?

    EU moves closer to caps on banker bonuses - RTÉ News
    I have no money, but I love my life.

  2. #2
    Politics.ie Member stopdoingstuff's Avatar
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    The right thing to do would be to cap their bonuses by not bailing them out so that they lose their jobs.
    Faoi mhóid bheith saor

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    I'm all for capping bankers
    "Changing Mr Cowen will not change the culture that bred this puss-filled carbuncle of iniquity" Bruce Arnold

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    Politics.ie Member Hewson's Avatar
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    The term 'brain drain' and the word 'bankers' should not appear in the same sentence. Anyway, yes, bankers' bonuses should certainly be capped. Expecting the fine body of men and women in finance to behave morally is akin to letting a raving aloholic have free rein in your pub for the night and expecting him to drink nothing but tonic water.

    The other band of renegades who need capping (though I'd draw the line at knee-capping, just) are politicians.
    Abortion is an act of violence. Violence demeans humanity, particularly violence against women and children.

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    Taxing banker's bonuses will not change anything. Firms will offer increased salaries to get around any cap,or offer one of the other incentives that any legislation on this matter will no doubt allow in lieu of cash bonus.

    You be better off splitting up banks and thus reduce the moral hazard that allows banks to pay massive bonuses in the first place!

  6. #6

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    Quote Originally Posted by Absurdo View Post
    I'm all for capping bankers
    That didn't take long
    I have no money, but I love my life.

  7. #7

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    Quote Originally Posted by Hewson View Post
    The term 'brain drain' and the word 'bankers' should not appear in the same sentence. Anyway, yes, bankers' bonuses should certainly be capped. Expecting the fine body of men and women in finance to behave morally is akin to letting a raving aloholic have free rein in your pub for the night and expecting him to drink nothing but tonic water.

    The other band of renegades who need capping (though I'd draw the line at knee-capping, just) are politicians.
    Your pro-life credentials are shining through there, Hewson
    I have no money, but I love my life.

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    Politics.ie Member tigerben's Avatar
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    Bankers will just be giving more expenses , more pension with housing and cars to sweeten deals. Bankers have learned that they run the show, and as much s politicans think they're the elected ones And make the rules, banks know rules can be broken and tabs put on taxpayers.

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    Politics.ie Member Hewson's Avatar
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    Quote Originally Posted by ShoutingIsLeadership View Post
    Your pro-life credentials are shining through there, Hewson
    No figure will ever be put on the damage done by the world's bankers, hedge funds, investment banks and inept/corrupt politicians since 2008. And not just in financial terms either. The trail of misery, destruction, bankruptcies, suicides and consequent personal repercussions is too big and too widespread to quantify.

    Suffice to say that bonuses for any of the above group should be off the table for several decades, centuries even.
    Abortion is an act of violence. Violence demeans humanity, particularly violence against women and children.

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    Politics.ie Member
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    The specific point about bonuses as opposed to salaries or perks is that they're performance-related. While that's usually sensible, the effect in finance appears to be to make people chase ever-larger risks until everything blows up.
    Never let the best be the enemy of the good.

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