EU Banker Bonus Plan May Be Watered Down

Pot Of Gold

Banker bonuses as much as five-times fixed pay would be allowed under compromise European Union proposals on compensation that clash with tougher demands from EU lawmakers.

Such awards would be tolerated if a majority of shareholders approve, according to draft EU plans obtained by Bloomberg News.

Without that approval, the maximum would be 300% of fixed pay.

The document drawn up by Cyprus, which holds the EU’s rotating presidency, is an attempt to broker a compromise with the European Parliament, which has called for an absolute ban on bonuses that exceed fixed pay. Governments argue that the measure may hamper the EU’s competitiveness as it struggles to emerge from the biggest economic slump since the Great Depression.

The Cypriot proposal is 'totally unacceptable', Philippe Lamberts, the lawmaker leading the work on the bank capital law for the parliament’s Green group, said in a telephone interview. 'I expect negotiations on that'.

Hit the link below to access the complete Bloomberg article:

Bank Bonuses May Face Weaker Limits in Watered-Down EU Plan

In the meantime, Bloomberg also reports that the Federal Reserve will give the 19 largest banks a preliminary result of its capital stress test, offering institutions that fail a chance to adjust their dividend and stock buyback policies.

The change comes after Citigroup Inc. and SunTrust Banks Inc. (STI) narrowly missed meeting the 5% tier one common equity to risk-weighted assets minimum capital ratio in the 2012 test at 4.9% and 4.8% respectively. Ally Financial Inc. (ALLY) had a stressed ratio of 2.5% in the last test.

Hit the link below to access the complete Bloomberg article:

Fed to Give Failing Stress Test Banks Second Chance

Finally, Reuters reports that the bosses of two of the lenders who will be most affected by changes to rules governing British banks will appear before Parliament's ongoing investigation into standards this week.

Antonio Horta-Osorio and Stephen Hester, the Chief Executives of state-backed Lloyds (LLOY.L) and Royal Bank of Scotland (RBS.L) respectively, will appear before the Parliamentary Commission on Banking Standards on Tuesday, along with Standard Chartered (STAN.L) CEO Peter Sands.

Hit the link below to access the complete Reuters article:

Bank chiefs to appear before standards inquiry

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