Peter Hoskin

To cap or not to cap?

To cap or not to cap?
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One of the more perplexing puzzles of the credit crunch is the issue of bankers' bonuses.  On the one hand, those failing banks that are being propped up by the taxpayer need to hang on to their best staff so they don't collapse completely.  Awarding bonuses helps them to do that.  But, on the other, the idea of rewarding failure - as today's Times splash suggests RBS is about to do - is an affront to both free market and taxpayer alike. These contrary pulls make me favour the middle ground of a cap on bankers' bonuses, like that announced by Obama yesterday.  But that just throws up questions about what level the cap should be set at to satisfy the public, the politicians and those bailed-out Masters of the the Universe.  Is there a definitive answer?  I'm not sure.  But I'd be keen to hear CoffeeHousers' views on the matter.