The European Union is on the brink of imposing a tough new cap on bankers’ bonuses against the wishes of the UK.
The FT reports that a clear EU majority favours a cap on bonuses so they do not exceed final salaries.
The European Parliament has been working on a deal within CRD IV for almost a year with no agreement but a deal now seems close.
France has now joined Germany in backing a bonus cap to stop the dispute further delaying the introduction of bank capital rules as part of CRDIV.
Britain is proposing a compromise that allows banks to pay bonuses that are double basic salaries if there is a supermajority of shareholder support.
On British diplomat involved in the talks told the FT: “The banks are panicking. They always thought the UK and Germany would save them.”
Last month Conservative MEP and shadow rapporteur on CRD IV Vicky Ford told Money Marketing talks were going “round in circles” over the bonus cap.
Money Marketing understands the Irish presidency of the EU has made passing CRD IV during its six month term its top priority after months of delay.