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EU close to a deal on bank bonuses

Wednesday, March 20 14:02:57

European Union lawmakers are expected to agree today to bar bankers in Europe from getting bonuses bigger than their salary, with just the timing of the first cap of its kind globally to be decided.

EU officials indicated that there could be a further delay to the introduction of the new rules until as late as the middle of 2014 to allow countries time to complete legal preparations - which could spare bankers for one more bonus season.

But apart from the exact timing, little else remains to be decided before one of the most ambitious reforms of the financial crisis can be introduced.

The cap, which would be rubber-stamped by EU member states, is designed to address public anger at a bonus-driven culture many European politicians believe encouraged the risk-taking that led to the near-collapse of many of the region's biggest banks.

It will be introduced despite objections from Britain. While some token concessions are possible to show goodwill towards the bloc's financial hub of London, the decision on a cap will not be reversed.

Lawmakers from the European Parliament and diplomats representing EU countries are to begin talks on finalising the bonus rules at 1730 GMT.

Sharon Bowles, who as chairwoman of the parliament's economic and monetary affairs committee is central to negotiations, said she expected a deal to be clinched.

The British lawmaker played down any threat to London. "The mass exodus from the City of London by disgruntled bankers demanding the astronomical bonuses of yesterday remains to be seen and I am sure fair-mindedness will prevail," she said.

"Today's agreement on a bankers' bonus cap will usher in a much needed culture change, not just for the City of London, but for the rest of Europe too." Reuters