On August 27, 2009
No Bonus Tax, Let the Market Decide
Rather that propose taxes on transactions to bring down bankers’ bonuses, Britain’s financial regulator, Lord Turner, should ask why competition is not forcing down City fees and pay. The free market is not working in the Square Mile. There is no shortage of investment banks — unlike retail banking, which has shrunk back to a Big Four with Lloyds’ takeover of HBoS. Nor is there any suggestion of a cartel of the sort that previously fixed stockbroking fees. And, not surprisingly, there is no shortage of people trying to join the City gravy train to share in the fees bonanza. The laws of supply and demand by which City firms make their money has been suspended for their own finances….
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