Business

Bankers' bonuses to be curbed
by Barbora Misakova

As it is said, nothing lasts forever and the financial crisis that hit the whole world proves it. In the times when everyone is recovering from this tremendous financial shock, the European Parliament comes with new decision which will change a lot. On Wednesday the EU parliament approved limits on banker bonuses from January. These limits are drawing the ire of the banking industry which sees these restrictions as a point when the Europe’s competitiveness is undermined. What is more, banking industry considers these limits as beneficial for rival global financial centers from Wall Street to Hong Kong. The European Parliament is defending by blaming unrestricted banke! r bonuses for causing the global financial crisis and by calling these reforms as preventing against a repetition of the financial crisis which brought the global economy to its knees. Pascal Canfin, a Green MP from France, said the bonuses were “the most ambitious in the world” and would end “extravagant bonuses synonymous with extravagant risks.” Limits set by EU Parliament will mean a far lower proportion of cash in the bonus, with much less payable up-front. From January 2011, 60 percent of bonuses should be variable and for future payment only. Cash payments are capped at up to 30 percent of the total bonus. Michel Barnier, EU financial services commissioner, said the banks will need to “change radically their practices and the mentality that have led in many cases to excessive risk-taking and contributed to the financial crisis.” The EU Parliament voted 594-24 in favor of the legislation.

related story (sgx17799): http://www.france24.com/en/20100707-eu-parliament-limits-ban...

by Barbora Misakova for Cantell TV (http://cantell.tv)

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posted by Blog TechSource @ 12:02 AM