Politics 28 February 2013 Is this the end of bonus culture? The punishment, finally, has come. Print HTML Finally the punishment has come. After years of banker bashing, public rage and political incredulity, bankers, it seems, are ultimately being hit where it hurts – their bonuses. The bonus cap, announced on Wednesday, comes not from the UK Government, but the EU, who seemed very pleased with the result: Othmar Karas, the European Parliament’s negotiator said: “For the first time in the history of EU financial market regulation, we will cap bankers’ bonuses”. But banking is only one half of the story. The excessive bonus culture, inherited from the 80s, has permeated just about every financial trading institution. Hedge funds, those opaque offices of Mayfair that have given us vocabulary like “futures” and “swaps”, are also likely to have their bonuses capped. Other traders could also see regulation: asset managers, investment managers, fund managers; the list goes on. So is this the end of bonus culture? Probably not, no. Although financial institutions threaten to go abroad, the list of regulatory-friendly destinations is getting smaller by the day. No, it is much easier just to bypass the rules. The obvious solution is simply to raise salaries – the norm method of gaining more pay before bonuses. An increased salary will also see bigger bonuses as the EU proposed cap is fixed to salaries at a ratio of 1:1 (or 2:1 with shareholder approval). Long term bonuses-type rewards will also be exempt from the cap. Rather than receiving the usual Christmas bonus, bankers can earn a quarter of their salary through instruments deferred for five years. Other complex structures and financial vehicles will be set up to fall outside EU powers and confound Brussels policy makers. Like smoking, financial institutions seem unable to quite their bonuses. Discouraged by Government, banned from public places and shamed by society, bonus baiting goes on. › Dividing Lines: Getting old Photograph: Getty Images Oliver Williams is an analyst at WealthInsight and writes for VRL Financial News Subscribe More Related articles An unmatched font of knowledge Leader: On capitalism and insecurity Cabinet audit: what does the appointment of Liam Fox as International Trade Secretary mean for policy?