Question

A) Given how much bankers, especially top bankers, make compared to the median salary in the United States, should there be an absolute cap on pay in the financial sector?

b) Does the Capital Requirements Directive IV come close to implementing such a cap indirectly?
c) Will staff at EU banks be more or less likely to leave for financial conglomerates in other countries, or to work for a technology start-up?
d) Is the effect the same on senior and junior bankers of those, who are more or less mobile because of family circumstances or language skill sets?
e) It has been suggested that society would be better off if fewer top students from elite schools joined the financial sector. What are the pros and cons of this point of view?

Answer 1

a) There is debate on whether an absolute cap on pay in the financial sector should be implemented. b) The Capital Requirements Directive IV does not introduce a direct cap on pay. c) The likelihood of EU bank staff leaving for other countries or tech start-ups can vary.

a) An absolute cap on pay in the financial sector is a highly debated topic. While some argue that it could help address income inequality and prevent excessive pay gaps, others believe that it could hinder merit-based compensation and discourage talent from entering the industry.

b) The Capital Requirements Directive IV (CRD IV) does not directly implement an absolute cap on pay in the financial sector. It primarily focuses on strengthening capital requirements for banks to ensure financial stability.

c) The likelihood of staff at EU banks leaving for financial conglomerates in other countries or technology start-ups can vary depending on individual preferences, career opportunities, and market conditions.

d) The effect of pay caps on senior and junior bankers can differ based on factors such as family circumstances and language skill sets. Those with more mobility options may be more inclined to explore opportunities outside the financial sector.

e) The suggestion that society would benefit from fewer top students from elite schools joining the financial sector has pros and cons. On one hand, it may encourage talent to pursue other fields and diversify the workforce. On the other hand, it could limit the pool of skilled professionals and potentially hinder innovation in the financial sector.