Is this really the moment to scrap bankers’ bonuses?

Chancellor Kwasi Kwarteng – keen to sharpen the City’s competitive edge, we’re told – wants to remove the legislative cap, imported from Brussels in 2014, that limits bankers’ bonuses to 100 per cent of their base salary, or up to 200 per cent with shareholder approval. That raises interesting questions. Was the cap a good idea in the first place? If not, why wasn’t it binned as soon as we left the EU? Is now the ideal moment to do so? And are bankers still a breed of greedy bastards?

The answer to the first question is certainly not. This column called the cap a ‘boneheaded’ measure that would merely provoke wily moneymen to find ways of gaming an unwelcome restraint on their wealth. Its stated aim was to discourage a return to the excessive risk-taking of the mid-2000s, but banks themselves claimed it increased risk by adding to their fixed costs as base pay rose accordingly.