March 05, 2013
Sir, Patrick Jenkins argues a lot on the benefit of “clawback” in “The time has come to rehabilitate bankers’ bonuses” March 5. And of course, intelligent “clawback” of bonuses is much welcomed, especially for the shareholders who otherwise need to foot the full bill.
But, for the society as a whole, much much worse than unjustified paid bankers’ bonuses, are all those missed opportunities and misallocated resources which have resulted from the current bank regulators having concocted dumb capital requirements for banks which favor “The Infallible”, those already favored, and thereby additionally discriminate against “The Risky”.
And sadly, there is no way to “clawback” that. It is even worse, in this case the regulators do not even want to recognize their mistake, and instead are set on carrying on business as usual.