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    Banker bonuses should be put in a pool for lending to SMEs. The bankers get paid out as and when the loans are repaid with interest.

    My point about monetary tightening is this: the debt markets follow trends. A quarter-point hike in base rates will imply further tightening down the road. People will bet on further rises and the yield curve will steepen, causing an increase in borrowing costs for everyone. Believe me, I traded debt and capital markets from 1975 till 1999 and it happened every time. Put rates up by 1.5% and the markets will think that is it. Put them up a quarter and they will price much more into the yield curve. This might sound arcane but analysing money markets is one of the ways big businesses manage their borrowing and investment strategies. Unfortunately no politician has ever grasped that and few in policy-making roles in government have either.

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