View more on these topics

EU threatens Bank of England with legal action over bankers’ bonuses

The European Banking Authority could take legal action against the Bank of England if it fails to prevent UK bankers being paid bonuses through a loophole that sidesteps the EU bonus cap, according to The Mail on Sunday.

The EU passed a directive this year that requires banks to limit bonus payments to 100 per cent of a banker’s salary or 200 per cent with shareholder approval.

But many UK banks are continuing to pay “allowances” – extra payments above salary that are linked to a banker’s role as opposed to the performance of the bank – which the EBA stated last week should be included in the bonus cap.

Following that ruling, EBA executive director Adam Farkas told the newspaper: “If there is a breach of law then we have the legal power to invite a breach of law action.”

The Bank of England and Chancellor George Osborne are opposed to the bonus cap, which they say could result in a flight of talent from the City.

Formal guidance on the bonus cap and allowances will be issued by the EU in December, with bank regulators expected to respond by April next year.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com