|
 The cap is one of the most high-profile rules from the 28-country
bloc after public anger over high pay at banks, many of which were
propped up by taxpayers in the 2007-09 financial crisis.
The rule limits a bonus to no more than the fixed salary, or twice
that level if approved by the bank's shareholders, and will affect
2014 awards to be handed out early next year.
Udo Bullmann, a German center-left member of the European
Parliament's economic affairs committee, questioned how the European
Banking Authority has fleshed out the rules, saying their scope was
narrower than the lawmakers had wanted.
It would only affect a selective number of bankers, Bullmann told a
committee meeting in Strasbourg, France. The EBA scaled back its
initial draft to hit fewer bankers.
The European Commission and the EBA could quickly tweak the rules to
avoid a prolonged delay, and the committee will put their concerns
to the bloc's financial services Commissioner, Michel Barnier, when
they quiz him next week, Bullmann said.
Britain's HSBC has said it will give new "allowances" — expected to
take the form of monthly or quarterly payments in cash or shares — to senior staff to boost their fixed pay, meaning that higher
bonuses could then be awarded. UK peers Lloyds and Barclays last
week indicated they would follow suit.
"What's going on in the UK? There is a lot that's happening that is
not in line with the political decisions that have been taken here,"
said Othmar Karas, an Austrian center right committee member.
The European Parliament has the power to veto the rules, effectively
forcing a rewrite, a step that would mean they might not be in place
to cap bonuses paid out in early 2015.
[to top of second column] |
An official from the Commission, which has endorsed the rules, said
without them it would be "very difficult" to implement the wider
bank capital requirements law of which they are part.
The new rules set pan-EU criteria for deciding which bankers have
their bonus capped by including anyone earning more than 500,000
euros a year for the most part.
"If there is no harmonized criteria by the end of the year then they
won't apply to 2015 bonuses. That is not satisfactory," the
Commission official said.
The EBA is already reviewing planned allowances to see if they
comply with the new law.
Britain, meanwhile, is challenging the bonus cap in the EU's top
court, arguing the rule will make it harder for lenders to cut costs
when required because it encourages a higher level of fixed pay.
Bonuses, meanwhile, can be cut or withdrawn easily.
The European Parliament will have to vote on any proposal by
mid-April, after which it goes into recess ahead of May elections.
(Reporting by Huw Jones; editing by
David Evans)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
