Home > Financial > Central Bank suggests some merit in easing bankers bonus restrictions

Central Bank suggests some merit in easing bankers bonus restrictions

Written by Robert McHugh, on 5th Jun 2019. Posted in Financial

article headline

The Central Bank governor has written a letter to the Minister for Finance in which he makes a case for the return of variable pay in the sector.

Currently, there is a €500k pay cap in place, variable pay is not allowed and even if it was paid, it is subject to an 89% tax rate. The governor suggests there is a case to be made for the return of variable pay as banks are struggling to hold onto key staff and face competition from other sectors and relocating British banks. 

The governor suggested that variable pay provides enhanced flexibility and if executed effectively, can support and incentivise behaviours that are consistent with good customer outcomes.

According to Goodbody Stockbrokers, "The Central Bank stance shows a practical approach to an issue which has been providing headwinds for the sector for a number of years. However, irrespective of the Central Bank advice, the issue is still clearly a politically sensitive issue, particularly given all the recent speculation about possible general elections, so political parties are likely to tread carefully/slowly on this issue."

Source: www.businessworld.ie

More articles from Financial

image Description

Nearly half of Irish consumers delaying large purchases

Read more
image Description

Irish banks extending payment breaks

Read more
image Description

Irish Fiscal Advisory Council says austerity can be avoided with post-COVID caution

Read more
image Description

Local Authorities are now taking applications for €250m Restart Grant

Read more
image Description

Irish budget deficit could top 10% of GDP say Finance Minister

Read more