FINANCIAL SERVICES
Government accused of trying to weaken EU bonus rules for bankers
A document setting out HM Treasury’s “negotiating position” on European Parliament regulations on pay and bonuses for financial service firms suggests the coalition government has “sought to water down” EU bonus proposals. That’s the view of Jim Pickard of the Financial Times, writing in his “westminsterblog”.
Similarly, George Monbiot, an environmental and political activist and Guardian columnist, claims that it “shows that the government has been secretly protecting bankers’ bonuses”. Monbiot reckons that the document reveals “how our government covertly tried – and failed - to kill tougher European rules on bankers’ bonuses, and how the Chancellor of the Exchequer appears to have misled parliament”.
The Committee of European Banking Supervisors (CEBS) published its final "Guidelines on Remuneration Policies and Practices" for financial service firms in December 2010.
Monbiot points out that UK proposals - including limiting upfront cash to 40% of a total bonus, double what the EU wanted - were defeated and tougher rules on banking pay were eventually adopted by the European parliament.
Pickard writes: “The document argued that Britain ‘led the way’ in implementing G20 principles and that the EU should not go any further. It was an entirely valid point of view to take; but there is a distinct irony in the idea of the British government proposing weaker restrictions than the rest of the EU while posing as banker-bashers.”
Want to know more?
The text of the document – “CRD3 Briefing: CEBS Guidance on Remuneration Provisions in the Capital Requirements Directive” - is available on George Monbiot's web site at www.monbiot.com/archives/2011/01/24/how-the-treasury-deceived-us/.
Media reports
--> “Curb the banks? The government has propped them up at every opportunity”, by George Monbiot, guardian.co.uk, 24 January 2011: www.guardian.co.uk/commentisfree/2011/jan/24/curb-the-banks-government-propped-them-up.
--> “How coalition sought to water down EU bonus proposals”, by Jim Pickard, ft.com, 17 December 2010: http://blogs.ft.com/westminster/2010/12/how-coalition-sought-to-water-down-eu-bonus-proposals/.