Is this the end of bonus culture?

The punishment, finally, has come.

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.

Photograph: Getty Images

Oliver Williams is an analyst at WealthInsight and writes for VRL Financial News

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Appreciate the full horror of Nigel Farage's pro-Trump speech

The former Ukip leader has appeared at a Donald Trump rally. It went exactly as you would expect.

It is with a heavy heart that I must announce Nigel Farage is at it again.

The on-again, off-again Ukip leader and current Member of the European Parliament has appeared at a Donald Trump rally to lend his support to the presidential candidate.

It was, predictably, distressing.

Farage started by telling his American audience why they, like he, should be positive.

"I come to you from the United Kingdom"

Okay, good start. Undeniably true.

"– with a message of hope –

Again, probably quite true.

Image: Clearly hopeful (Wikipedia Screenshot)

– and optimism.”

Ah.

Image: Nigel Farage in front of a poster showing immigrants who are definitely not European (Getty)

He continues: “If the little people, if the real people–”

Wait, what?

Why is Trump nodding sagely at this?

The little people?

Image: It's a plane with the name Trump on it (Wikimedia Commons)

THE LITTLE PEOPLE?

Image: It's the word Trump on the side of a skyscraper I can't cope with this (Pixel)

THE ONLY LITTLE PERSON CLOSE TO TRUMP IS RIDING A MASSIVE STUFFED LION

Image: I don't even know what to tell you. It's Trump and his wife and a child riding a stuffed lion. 

IN A PENTHOUSE

A PENTHOUSE WHICH LOOKS LIKE LIBERACE WAS LET LOOSE WITH THE GILT ON DAY FIVE OF A PARTICULARLY BAD BENDER

Image: So much gold. Just gold, everywhere.

HIS WIFE HAS SO MANY BAGS SHE HAS TO EMPLOY A BAG MAN TO CARRY THEM

Image: I did not even know there were so many styles of Louis Vuitton, and my dentists has a lot of old copies of Vogue.

Anyway. Back to Farage, who is telling the little people that they can win "against the forces of global corporatism".

 

Image: Aaaaarggghhhh (Wikipedia Screenshot)

Ugh. Okay. What next? Oh god, he's telling them they can have a Brexit moment.

“... you can beat Washington...”

“... if enough decent people...”

“...are prepared to stand up against the establishment”

Image: A screenshot from Donald Trump's Wikipedia page.

I think I need a lie down.

Watch the full clip here:

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland