The European Union’s move to cap bonuses at the region’s largest financial institutions has been hailed as a step in the right direction but does not go far enough.
Financial sector observer Dr Bang Dang Nguyen, University Lecturer in Finance at Cambridge Judge Business School, feels there are a number of reasons why further measures were not taken.
“First, it is very difficult to get all the member countries to agree on such an important issue and secondly the banking industry is a very complicated and special business and is not similar to any other industry.
“It is a good start and based on that as a starting point in the future the European Union might provide further regulation, better regulation and maybe smarter regulation.”
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In an interview for Cambridge Judge Business School’s website, Dr Nguyen added that future regulation should address the many different forms of banking and investment activities across the sector.
However this represents a challenge as it would be complicated to have regulation at every corner of the banking industry.