SPIEGEL ONLINE INTERNATIONAL: In a bid to address widespread public outrage over greed in the financial sector, European officials have agreed to legislation capping bankers' bonuses at a maximum of a year's salary. Great Britain fought to prevent the measure, but failed to rally enough support.
Starting in 2014, banks in the European Union must limit bonus payments for their employees. After some 10 months of tough negotiations, top European officials agreed late on Wednesday in Brussels to cap bonuses at a maximum of one year's base salary.
"For the first time in the history of EU financial market regulation, we will cap bankers' bonuses," said the European Parliament's head negotiator, Austria's Othmar Karas, in a statement. "The essence is that from 2014, European banks will have to set aside more money to be more stable and concentrate on their core business, namely financing the real economy, that of small and medium-sized enterprises and jobs."
The bonus cap was part of a package of financial laws hammered out between EU officials, the European Commission and representatives of the 27 member states in negotiations led by Ireland's Finance Minister Michael Noonan. The goal is to prevent bankers from taking excessive risks, which can shake the financial industry.
"This overhaul of EU banking rules will make sure that banks in the future have enough capital, both in terms of quality and quantity, to withstand shocks," Noonan said. "This will ensure that taxpayers across Europe are protected into the future." Fierce Resistance from London » | kla -- with wire reports | Thursday, February 28, 2013
