London as a mecca for bonus bankers?


In Britain grabs the government of Liz Truss a hot potato and wants to remove the upper limit for banker bonuses. So far, as in the EU countries, the variable, performance-related payments are capped. They may not exceed the base salary or, with the approval of the Bank's shareholders, a maximum of twice that amount.

Finance Minister Kwasi Kwarteng wants to remove the cap to make the London financial center more competitive. The decision is part of planned "ambitious deregulation" measures, he said on Friday. "We need global banks that create jobs here, invest here and pay taxes here in London, not in Paris, not in Frankfurt and not in New York," he said in parliament. "Capping bonus payments only boosted bankers' base salaries or moved operations outside of Europe."

New Prime Minister Liz Truss and her Treasury Secretary are determined to Brexit lift the bonus cap. The government is aware that the step will not be popular with the population in the current tense economic situation. Labor has already protested sharply. The opposition party criticized that while nurses had to accept large drops in real wages due to high inflation, bankers received bigger bonuses. A flash poll by YouGov found that just 15 percent of voters support ending the bonus cap, while 60 percent opposed it.

The bonus cap polarizes

The Times newspaper published an angry cartoon showing a squinting, smiling Chancellor of the Exchequer proclaiming that "in times of national distress and mourning" one section of the population needs "consolation and help" - and that's why he wants to increase the banker's bonus. An editorial in The Times, however, defended the proposal as a sensible measure that would strengthen the City of London and the economy as a whole.



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