FINANCIAL SERVICES
City figures plead with Cameron to block EU cap on bank bonuses
A report in today’s Times newspaper by Sam Coates and Roland Watson says “City figures” have been urging Prime Minister David Cameron to block a proposed EU cap on bank bonuses. The report says:
The Prime Minister will arrive in Brussels tomorrow lunchtime, when he will make clear that reforms to integrate Europe's banking system should apply only to the single currency and Britain will not take part. Mr Cameron has been seeing leading City figures to seek their advice about the eurozone crisis before the meeting.
Peter Sands, the chief executive of Standard Chartered Bank, warned the Prime Minister that a new cap on bonuses proposed by the European Parliament could drive the financial sector to New York and Hong Kong.
The change is part of a much wider reform package known as Capital Requirements Directive 4, which forces banks to hold bigger capital buffers.
To read the full article online, visit www.thetimes.co.uk/tto/news/politics/article3457582.ece [paywall]
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Bankers' bonuses must not exceed their fixed pay, a European Parliament panel said in a vote on Monday 14 May 2012. MEPs on the Economic and Monetary Affairs Committee endorsed the bonus cap as part of draft rules intended to force banks to hold more capital so they can withstand shocks better without needing taxpayer support. [E-reward News]