There’s been a lot of talk about bankers bonuses and whether they’re right or wrong. There appear to be 2 main problems.
1. They’re too large
2. They’re paid regardless of overall bank performance.
Here’s an alternative: use a bonus-malus system that is regulated and applies across the European banking sector.
If a banker / bank does well and deserves a bonus, they can have one. They can, however, take an equal malus if they or the bank do badly.
This would limit the size of the bonus to what the banker can afford to lose (pay back).
The system would need European regulation to ensure malus were paid back even if the employee jumps ship.
Perhaps they should even be required to invest that money in advance, in a central fund.