I'm still amazed at the number of articles about bankers and how they wrecked the economy and how they are still getting big bonuses. Politicians keep promising to stop it but still haven't. But I will say again and again till people stop missing the point. Bankers should be able to give whatever bonuses they want to incentivise their staff to maximise their profits. What they should not be able to do is to gamble with taxpayer's money. They should only be allowed to use their own. If bankers can make big profits using their own company's cash then fine, let them spread it out among the shareholders and those who earned it. Why should shareholders keep it all and the staff who earned it not get their rightful share? On the other hand, if they blow it all, then let them die. They will then be directly incentivised to take reasonable risks and benefit accordingly when they get it right, suffering accordingly when they get it wrong. We do not need to regulate their bonuses, just the means by whihc they earn them. We should protect taxpayers from having to pay the bill when they make wrong decisions. Then the banks are just companies like any other that live or die in the jungle of the markets.
Limiting bonuses will not in itself protect the taxpayer from the same thing happening again, limiting the funds with which they gamble will. It is baffling why our government cannot see that simple truth, and insist all the time on threatening to regulate the wrong targets. Until they understand, we all remain at risk.