Why Limits on Banker Bonuses Are Meaningless

Do you believe everything you read? It says: “If the possibility of large bonuses indeed generates excessive risk-taking, then bank stakeholders have ample incentive to adopt such limits without government coercion.”

What nonsense. If one bank limits banker bonuses then of course it runs the risk that their best bankers choose another employer. But if ALL banks do it, this risk does not exist.

See, in the banking world you can risk other people’s money and get a bonus big enough to retire. Then the next year the bet turns bad and the banker can keep their retirement money and quit. But the pension funds and small investors have lost their retirement money. That’s robbery in plain daylight.

Or maybe we should call it “income redistribution?” Aha, now you understand why it is wrong.