City’s bonuses safe from EU cap for now

Tim Wallace
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THE EUROPEAN Parliament yesterday postponed its key vote on capping bank bonuses, putting its decision back from December to March as its members (MEPs) try to agree what type of cap to consider.

The delay means bonuses are safe for at least another year. MEPs had hoped to approve the cap quickly in a bid to push the European Council to back the measure and impose it before the coming bonus season.

But voting in March means the cap – if it is approved – will not take effect until at least the 2014 bonus season.

The Parliament’s Economic and Monetary Affairs Committee approved a bankers’ bonus cap of one-times salary in May. But MEPs are likely to vote on a compromise level, possibly at three-times salary.

“There has been a real push in recent weeks by those in favour of the bonus cap to reach a compromise so the cap could be approved by the new year,” said Alex Beidas from Linklaters. “This is now not going to happen which will be good news for the banks.”