Friday, 10 December 2010

Europe Set to Link Banking Bonuses to Basic Salaries

THE DAILY TELEGRAPH: European regulators are set to tether banker bonuses to the level of basic salaries in a move that could deal the most severe blow yet to the culture of multi-million pound pay-outs.

Under the terms of proposals, expected to be published on Friday, investment banks may be forced to limit bonuses to a set multiple of bankers' salaries that would be agreed with financial watchdogs.

The Committee of European Bank Supervisors (CEBS) wants to see an end to bonuses that can be up to 50 times bigger than a banker's salary. Instead, the group, which is based in London and comprises members of the 27 European Union member states, wants banks to have to agree a maximum ratio of fixed-income to deferred pay with their national regulators.

Jon Terry, head of reward at PriceWaterhouseCoopers, said: "While CEBS is unlikely to set a specific ratio, we expect them to propose a framework from which banks will work with national regulators on agreed bonus multiples, and then to have to justify them in the context of their risk profiles. This is going to be a radical change for many institutions." >>> Louise Armitstead | Friday, December 10, 2010

This is good news. But does it go far enough to curtail the greed of these money-grubbers? If something isn't done about this selfish culture that we now live in, I fear that the riots on the streets of London last night will look like a picnic in the park by comparison with what awaits us. The system we have now works for the good of one group of people only: the rich. The middle classes have been trampled on for far too long. – © Mark

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