Bankers’ bonuses raise public ire. Since the 2008 crisis, they are popularly seen as the most important problem in the financial industry, and the ‘bonus culture’ as something that needs to be changed.

Economists and bankers themselves widely regard these views as irrational. Misaligned incentives played some role in causing the financial crisis, it is acknowledged, but all things considered their contribution was relatively small and relatively easily resolved.

A more important issue is adequate capitalisation. What is wrong, if anything, with significant remuneration for financial professionals? I argue that it shows that bankers can't be trusted. Bonuses are a standing signal of the preparedness of the industry to exploit customers if there is money to be made. Yet banking is a practice constituted by acts of trust. What is at stake is the larger question of the status of banking. Is it a business - or a profession?