Could doffing bankers' bonus cap lead to another financial crisis?

"Those who cannot remember the past are condemned to repeat it," (George Santayana). Michael Barnett discusses the role of the bonus culture in the financial crisis and what a relaxing of current restrictions could mean in this different era.

Michael Barnett (michael.barnett@quillonlaw.com) is a partner at Quillon Law and is one of the UK's leading financial markets litigators. He has almost 30 years' experience in commercial litigation and specialises in high-stakes financial markets disputes.

In 2013 the United Kingdom adopted the European Capital Requirements Directive, a measure brought in following the 2008 financial crisis and incorporated into the Financial Conduct Authority and Prudential Regulation Authority rules. These rules limit the ratio between bankers' salary and bonus to 100 per cent, or more with shareholder approval, and include other provisions designed to restrict the bonus element of bankers' compensation.