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| The European Union Monitoring Mission in Georgia in action (Photo credit: European External Action Service - EEAS) |
A cap would represent the most radical clamp down yet on banker pay in Europe. It would, however, be politically difficult to push through such a reform if Britain, as expected, objects. Its finance minister, George Osborne, who wants to protect London's position as Europe's top financial centre, has said he would fight any bonus caps from Brussels.
Policymakers worldwide have made little progress in limiting pay for an industry that caused a financial crisis in 2008, forcing bank bailouts by taxpayers. An automatic cap of three times salary would be applied under the proposal to be discussed on Monday although a bank's owners could loosen this limit. "Shareholders could decide to go for five times," said the official.
A second official said: "There should be a final push so that there is a political agreement at the meeting of finance ministers on December 4," adding that changes to any cap were still possible. The proposal is being tabled by officials from Cyprus, who hold the rotating presidency of the European Union and are leading preparations ahead of a meeting of the bloc's finance ministers on Tuesday.
Banks have also lobbied against the change, saying the cap could strip them of talented staff. Current EU rules already force banks to defer up to half the bonus for at least three years. The EU has tougher bank pay curbs than guidelines laid out by the Group of 20 top global nations but some countries such as Germany want further reform.
The European Parliament, which also has a say in setting rules, wants the total of all elements of a bonus to be no more than basic salary, a step too far for some countries. The cap is one element in a package of rules that implement a global accord, known as Basel III, requiring lenders to triple the amount of basic capital they must hold to weather shocks unaided by taxpayers. ...
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