City brokers and small banks to escape bonus cap in EU review

Billy Bambrough
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There were fears that the cap would mean smaller banks and brokers would face unnecessary administrative charges (Source: Getty)

The European Commission has decided new rules on bankers’ bonus caps will have to be applied more flexibly or redrafted, City A.M. understands.

Vera Jourova, the commissioner in charge of the pay rules, began looking into the cap after concerns were raised that city brokers and smaller banks would be hit by unnecessary administrative costs.

The bonus cap, meant to prevent bankers from taking excessive risks, limits annual bonuses to twice an employee’s salary.

The EC said in a statement: “The commission has started to work on its own assessment of the remuneration rules as set out in the capital requirement directive and intends to complete its review by mid 2016.”

The rule was scheduled to take effect from December 2015 but was pushed back to January 2017 while EU officials considered changes.