The Government has said that guaranteed bonuses contribute to irresponsible deals by bankers,
I wish that someone could explain this to me.
I can get the idea (although am not wholly convinced of it) that striving for a bonus can make, on the basis of bonus if you win the shareholders eat the losses if you lose, bankers take excessive trading risks.
But I cannot see how a guarnateed bonus (ie, a high salary paid on day 365 of employment), the opposite of something that one must take excessive risk to earn, can cause such.
Can anyone explain why the Government is pushing this line then?