If you are in trouble, you need the best people you can afford.
If anything, it should perhaps boggle our mind more anyone got bonuses in eg 2007 that weren't clawed back later.
In general, I don't think bonuses by themselves are a problem. It's just a different way to structure total comp. And if you restrict bonuses, you just force banks to pay higher base salaries instead.
To make banks behave better, I would suggest abolishing (government-backstopped) deposit insurance. That way depositors will keep a sharper eye on their banks, and hopefully pro-actively move their funds to institutions with a reputation for low risk and transparency.
(Depositors who want to simulate the current regime could just pick a bank that for their money that invests only in short term government debt.)
If anything, it should perhaps boggle our mind more anyone got bonuses in eg 2007 that weren't clawed back later.
In general, I don't think bonuses by themselves are a problem. It's just a different way to structure total comp. And if you restrict bonuses, you just force banks to pay higher base salaries instead.
To make banks behave better, I would suggest abolishing (government-backstopped) deposit insurance. That way depositors will keep a sharper eye on their banks, and hopefully pro-actively move their funds to institutions with a reputation for low risk and transparency.
(Depositors who want to simulate the current regime could just pick a bank that for their money that invests only in short term government debt.)