The response to that argument is to challenge the assumption that these really are valuable employees. There are always more people coming along wanting to do a job. The thing is that the people claiming these bankers are irreplaceable are those self same bankers. They all say that no one could do their job better than them? Gee. Thats unusual. Or, as someone pointed out in answer to this self same question, Fred Goodman, chairman of bankrupt RBS was not a banker. The new chap recently appointed to fix the company used to run sainsburys (a supermarket). OK, they are top management not money jugglers, but we are also complaining about their performance. But we are only able to talk about them as examples because we know who they are and exactly what they have done to deserve their bonuses (ie nothing) and their personal banking knowledge which apparently is not essential to do the job.
You are right, if one bank sufferes restrictions it will be at a commercial disadvantage. On the other hand santander, a spanish bank, where they already had tougher regulation, had just bought up some of the bankrupt british ones. Tough regulation worked for them. And then again, maybe we could only regulate for british banks, so we stop the british ones going bust and let the american ones get on with it. How is that worse than leaving them all to do it again? These whopping profits are not just the result of clever capable people doing well, they are more the result of average people taking risks.
The problem with bonuses like this is that they change the game. If you can make enough money in a couple of years to retire, why not go for it? If the bank goes bust, it doen't cost you anything. If you win, you get to retire in luxury while you can still enjoy it. The bonus makes you want to take risks with other peoples money. This is not not not good.
