EU regulators to implement stricter caps on banker bonuses, news report claims

7 October 2010

EU regulators are expected to unveil stricter rules governing the size of bonus pay outs, a news report has claimed.

Regulators from across the EU are currently meeting in London at the headquarters of he Committee of European Banking Supervisors (CEBS).

The representatives are in the UK to discuss implementing reform to certain areas of regulation for the financial services industry including remuneration infrastructures.

According to the Financial Times, which cited unnamed sources familiar with the matter, attendees are expected to agree on introducing a cap to limit the size of bonuses to a multiple of an annual salary.

The Financial Services Authority (FSA) is representing the UK at the meeting and has called for the amount of cash available as part of a bonus to be limited to 50 per cent.

David Bulk, a market analyst at inter-dealer broker BGC Partner, told Bloomberg: “It’s good of the FSA to push for 50 per cent, but maybe a 30 per cent cap is what’s necessary to put this matter to bed.”

Regulators have yet to announce any official decision on the issue.

Earlier in the week research from the Centre for Economics and Business Research revealed that the amount paid to UK bankers in bonuses in 2010 will fall to £7 billion from the £7.3 billion distributed during last year.

By Jim Ottewill

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