Thursday, February 28, 2013

Capping the bankers

Banker's bonuses have been in the spotlight ever since the start of the Great Financial Crisis and the odious sight of the very people who had ruined the world awarding themselves enormous payouts for doing so. Now, the EU has moved to rein in this problem, by capping those bonuses:

European Union officials have struck a provisional deal on new financial rules, including capping bank bonuses.

Under the agreement, bonuses will be capped at a year's salary, but can rise to two year's pay if there is explicit approval from shareholders.

The deal was reached late on Wednesday. EU ministers must approve it, although this is considered a formality.

Its a good move, but at the same time you have to ask why it is only limited to banks. Corporations in general pay excessive bonuses, and these are both a source of economic instability and a driver of inequality. So why not cap their payouts (and limit their ability to rob their shareholders) too?