Negotiations over EU banking bonus cap continuing

21 February 2013

Negotiations between policymakers over the implementation of new banking bonus rules in Europe are ongoing.

Earlier this week (19 February), it emerged that officials from the European Parliament (EP) had held talks with European Union (EU) representatives in an attempt to strike a deal that would see new bonus guidelines introduced along with the Basel III regulations.

The EP wants a new system whereby bonuses are capped to a maximum of the equivalent of a professional's basic salary on the grounds that this would prevent the type of reckless payments that contributed to the global crisis.

Such a measure is supported by EU heavyweights Germany and France, although the UK - the home of the City of London, Europe's primary trading centre - is resistant.

Mayor of London Boris Johnson said yesterday that such a restriction represents a "threat to the fabric of the City".

And Philippe Lamberts, a Belgian MEP who is involved in the discussions, has told BBC Radio 4's Today programme that plenty of work is needed before a deal is reached as the current proposals could make breaking the law a rational choice for banking professionals.

By Tony Aynsley

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