Bankers were yesterday told there will be no backing down from an EU demand that they should be paid no more than 20 per cent of their bonuses up front in cash, as experts said Europe's pay rules would be the "toughest in the world". http://www.independent.co.uk/news/business/news/city-outrage-as-europe-stands-firm-on-bankers-cash-bonuses-2157462.html
The Committee of European Banking Supervisors (CEBS) has resisted an intense lobbying effort by UK officials and the banking industry, which pleaded for the rules to be watered down and phased in only gradually.
Applying from 1 January, the requirements finalised yesterday will cover this year's forthcoming bonus round. Many bankers in Britain are top-rate taxpayers, so any cash component of their bonuses is hit by a hefty 50 per cent tax take. The EU committee did make concessions on some points, such as giving banks some discretion over how long employees must retain shares awarded in a bonus before selling them.
Britain's Financial Services Authority, which did not comment yesterday, is set to incorporate the requirements into rules of its own, which will be published within days.
Arlene McCarthy, the Labour MEP who is vice chair of the European Parliament's economic and monetary affairs committee said: "These guidelines will put an end to the UK Government's attempts to weaken the new EU law on bankers' bonuses. In the UK alone, over £720bn of support was made available to failing banks - more than an entire year's spending by the Government."
But lets not be fooled we would be wise to head the words of a former Bank of England governor, Sir Josiah Stamp, when he said "Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again.
However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits." (speaking at the Commencement Address of the University of Texas in 1927)
