And for my next trick....deal reached on bank bonuses

M&G's bond vigilante Matthew Russell questions the logic of the Project Merlin agreement on bank bonuses and lending.

George Osborne announced yesterday the UK's major banks and the government have come to an agreement over bonuses. Lloyds and RBS have gone as far as limiting cash payouts to £2,000. The deal has been agreed as part of Project Merlin - the government and the banks are attempting to come to some sort of settlement over how the banks should/will behave in the future. As well as making the bankers' bonuses disappear, Merlin has also led to the banks committing to lend £190bn to businesses in an effort to support the economy. It is a noble objective, but one which is going to cause the ba...