Senior Fellow of the Adam Smith Institute, Tim Worstall, argues that Mark Carney's plan to clawback bankers' pay is "logically ridiculous" in the CityAM Forum:
The suggestion that fixed pay could be clawed back is logically ridiculous. Pay that is subject to clawbacks is no longer fixed pay: it is variable pay – pay dependent upon the future performance of the organisation.
We’ve already got EU rules where variable pay may not be more than 100 per cent of fixed pay. If what was formerly fixed pay is now variable pay, then under EU rules, we cannot pay bankers anything – because there is no fixed pay for which variable pay can be a multiple. Not paying bankers at all will please the rabble, but it’s an odd thing for the governor of the Bank of England to suggest.
Read the article here.