Why it’s right to scrap the bankers’ bonus cap

Scrapping the bankers’ bonus cap will annoy Brussels, says Matthew Lynn. And while we’re at it, he says, we may as well get rid of a load of other EU rules too.

City boys getting bladdered
Spring time for bankers – and let us hope for the economy too
(Image credit: © Getty Images)

It is unlikely to be a popular move. At a time when the cost of living crisis is squeezing living standards on a scale unprecedented in more than 30 years, when inflation is close to 10%, and when many people are struggling to make ends meet, lifting the controls on the bonuses banks are allowed to pay their staff, as new chancellor Kwasi Kwarteng is expected to do, is going to seem like a provocative move.

It is still the right one, however, and will give an important signal that the Truss government is willing to make the right decisions even if it means a few bad headlines and some outrage on Twitter.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.