We’ve all felt bruised by how rapidly bankers have bounced back from an economic abyss to being bailed out by trillions of public pounds, dollars and euros to now paying mega bonuses again. 

National Governments such as our own coalition have tried encouraging limits via the £2.5bn Bank Levy and public moral imperatives with varying success. 

But the Lib Dem Euro MP Sharon Bowles has led the introduction of actual tougher new rules on bankers’ bonuses covering the European Union. 

The key points are pensions being paid at least 3 to 5 years after the employee has retired or left. This will stop abuses like that by Fred Goodwin, the former Chief Executive of RBS, where bankers walk away with bonus-style pension pots even if their bank fails. 

Banks will now also have to pay between 40%-60% of their bonuses in contingent capital (a form of debt which turns into equity if there is a crisis) or shares deferred for at least 3 to 5 years. This means that if the bank suffers heavy losses, bankers’ bonuses will automatically take the first hit. So gaining bonuses from short term risk taking will now be discouraged. 

Banks will also be forced to publish bonuses over €1 million Euros. This should also have the happy side effect of employee seeing if such bonuses are fairly given. 

No one can accuse Lib Dems of doing nothing on bankers’ bonuses.