Banks have warned European rules on bankers’ bonuses are being applied too strictly which will hurt them when it comes to recruiting.
The Financial Times reports banks are concerned about a recent legal analysis on EU rules on bankers’ pay which says rules must be applied across the sector.
Currently, national regulators can exercise discretion over how EU bonus rules are applied, with different rules depending on a firm’s size.
The FCA allows some of the 1,000 brokerages and investment firms it supervises not to apply some of the rules.
But banks say these exemptions could be lost if the legal analysis is not reassessed. They say smaller banks and investment firms would face new requirements and larger banks would have to extend the rules to previously exempt staff, for example those working in their asset management arms.
Trade body the European Banking Federation is seeking urgent talks with the European Commissioner responsible for executive pay to reconsider.
EBF chief executive Wim Mijs says: “A strict interpretation of the rules would lead to absurd results, with a heavy administrative burden.”
A letter to the Commisioner from EBF president Frederic Oudea, sent last month, warned the removal of the exemptions would lead to “disproportionately high implementation costs and administrative burdens without any commensurate benefits”.