PricewaterhouseCoopers says the EU is set to hugely expand the scope of the bankers’ bonus cap to hit 10 times more people than initially thought.
Reuters reports the cap is expected to hit all bank staff earning salaries of €500,000 or more rather than simply risk-takers.
Earlier this year, the EU proposed a cap on bankers’ bonuses of 100 per cent of their salary, or 200 per cent with significant shareholder approval.
The European Banking Authority is set to publish details of the cap next week when the rules will be put out to consultation.
PwC partner Jon Terry told Reuters the new rules will hit 10 times as many bank staff and could have serious implications for London as a financial centre.
He says: “This will create a major challenge for banks as to how they reward their staff. Bringing more people into the stringent pay rules again further widens the gap between pay practices in Europe and the rest of the world.”
He points out that Barclays would see 1,338 staff affected compared to just 393 under the original, stricter definition of “risk-takers”.