Bankers in Europe will have one final bonus season before they are barred from awarding themselves payouts worth more than their salary, EU lawmakers agreed on Wednesday, paving the way for the first cap of its kind globally.
Reuters reports that the cap is designed to address public anger at a bonus-driven culture many European politicians believe encouraged the risk-taking that led to the near-collapse of some of the region's biggest banks.
The law will take effect in January 2014 but will only apply to bonuses paid in 2015. A special provision to recognise that bonuses are paid for the previous year's work means bankers who collect payouts next February and March will not yet be affected.
The new rules will make it harder to award large payouts such as the bonus worth more than $25.8m cashed in this week by Rich Ricci, the head of Barclays' investment bank.
'The parliament withstood the pressure from the British government and did not allow any change to the cap on bonus payments', said Udo Bullmann, a German member of parliament who pushed for strict bonus limits.
'Despite bitter resistance from national capitals and the finance industry, Europe will be a little bit fairer from 2014'.
Hit the link below to access the complete Reuters article:
image: © Candie_N