Over objections of Tory Chancellor George Osborne and London Mayor Boris Johnson, the EU is currently pressing ahead with plans to cap bankers’ bonuses at 100% of base salary (or 200% where there is explicit shareholder approval). A cap on bankers’ bonuses is a very good idea.
Getting banking regulation right should be a high priority for the Labour Party as it formulates its policies ahead of the 2014 European elections and the next general election.
Labour Party leader Ed Miliband has rightly said that New Labour was “too timid in enforcing rights and responsibilities, especially at the top, and it was too sanguine about the consequences of the rampant free markets”. This certainly is true with respect to the banking and financial services industries.
The British people have been failed by financial services regulation. The “light touch” regulation favoured by both New Labour and the Tories contributed to taxpayers having to stump up hundreds of billions of pounds to prop up failing banks to avoid an economic meltdown.