EU criticised over bankers' pay plans

11 October 2010

Figures within the British financial industry have expressed concern over European plans to clamp down on the bonuses paid out to bankers, which they claim could drive firms away to other parts of the world.

The Committee of European Banking Supervisors (CEBS) outlined the impending regulatory overhaul in an 84-page document published this week, but British Bankers' Association chief Angela Knight was highly critical.

"Policymakers must be mindful that what they are doing may not have the result they are seeking," she told the Daily Telegraph, implying that the tighter rules may force top talent further afield.

If implemented, the CEBS reforms would see between 40 and 60 per cent of bankers' bonuses deferred, while firms will be obliged to identify members of staff who have a material effect on risk.

Meanwhile, CityAM reported that a number of senior banks have been calling on regulators to not put the UK at a disadvantage over banker bonuses.

Sir Philip Hammond, chairman of Royal Bank of Scotland (RBS) and John Varley, Barclay’s outgoing chief executive, have been calling on an global consensus to be reached by banks on new regulation surrounding bonuses.

By Asim Shah

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