The idea that we should now tax bank transactions to stop them paying mega bonuses is absurd.
The government says it wants the banks to lend more money to business. The Regulator says the banks need to have more cash, capital and reserves before they can lend more to business. The best way for them to get more cash, capital and reserves is to make more profit. Now if they make more profit it is proposed they should pay more tax, removing the extra profit from contributing to the cash and capital. They should make up their minds what they are trying to achieve.
I have no time for mega bonuses to the highly paid in state aided banks. Why doesn’t the government just ban them? They are either the owners, or set the terms for the government assistance, so they can just do it.
Given that the Regulators allowed too much excess risk taking in the good times and now want to allow too little in the bad times, wouldn’t it be better to change the Regulators? And can we have an assurance that in the meantime no highly paid Regulator is enjoying one of these bonuses they now condemn?