Officials from the European Union have put together a provisional deal on new financial rules which will include the capping of banks bonus schemes. The proposal outlines that bankers’ bonuses will be capped at a year’s salary, with potential to rise to two year’s pay if it is deemed appropriate by shareholders.The deal comes after years of controversy over bonuses following the huge bail-outs of banks during the global financial crisis. However, Prime Minister David Cameron said the EU should concentrate on tightening up banks in other ways and that the removal of these bonuses will simply drive away talent and restrict growth in the financial sector. Joe Rundle, head of trading at ETX Capital, in London, agreed with David Cameron saying “It will drive up fixed salaries to compensate. Businesses that do not need to be inside the European Union will leave. And when banks invest in future divisions, it will be outside the EU.”
The proposals are yet to be formally agreed however, if it goes ahead, it will start the biggest shake-up of the banking system since the global financial crisis.The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.Setfords Solicitors are a national full service law firm, with employment law solicitors in London and across the country.