BANKERS’ bonuses will be capped at a maximum of double their salary from 2015, as the EU Council pushed through the plan last night in the teeth of UK opposition.
The measure will come in on 2014’s bonuses, paid out at the start of 2015.
British politicians, bankers and regulators fear the plan will simply drive up salaries, increasing banks’ fixed costs and making it more difficult to cut pay and costs in an economic downturn.
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Interesting move since commercial banks are quasi-public institutions due to their subsidies and backstopping via central banks.
Remember, Tim Geithner did much the same thing in 2009 while the TBTF banks were LOANED money via Bush's TARP program. Geithner capped the total salary of any banker while they were under the TARP program. He deserves respect for that move.
The EU has not made formal bank regulations law that the US did under Dodd-Frank though. They needed to do this. Good for them.