What are the bankers’ caps?
The bankers’ cap limits the amount of bonuses and compensation top bankers receive, in hope of ensuring stability for the banking industry.
The caps were implemented as a response to the 2008 financial crisis, which exposed the reckless behaviour of some banking executives.
By limiting bonuses and excessive pay, it would mean bankers would be less inclined to engage in high-risk activities that could jeopardise the stability of the financial system.
These caps are set to end on 31 October, and the consequences of this decision reach much further than the world of top bankers.
What will the scrapping mean for everyone else?
The scrapping of the banker bonus cap may result in an increase in income inequality.
If top bankers are able to earn unlimited bonuses, it is likely that a large portion of money made by financial institutions will be funnelled towards senior employees, leaving less for those in lower positions.
For local employees this is a growing concern, especially amidst the ongoing cost of living crisis, as the ban will make it harder for people in lower pay brackets to achieve financial stability and economic progress.
What are some potential positives?
Those in favour of scrapping banker caps argued that it may lead to increased economic growth and job creation.
When banks have the flexibility to reward their top talent more generously, they may attract more skilled professionals. These individuals could potentially contribute to the growth of financial institutions, which in turn might lead to a healthier economy.
Overall, the scrapping of banker caps will leave employees facing both benefits and drawbacks.
