Note: This is the original longer version of an Opinion Piece arguing for imposing caps on banker bonuses that appeared in the Guardian newspaper on the 25th of Feb 2013.
The European parliament is right to limit the maximum bonus bankers can command as a proportion of base salary. This will help tackle the culture of excessive risk-taking and the bending of rules that has now become endemic to banking. Undertaking this at an EU-wide level will also limit any large-scale migration of the so-called ‘talent’. It will reduce the risks borne by tax-payers and go a long way to rehabilitate the industry, making it focus on serving the real economy again.