BANKERS are waiting with bated breath today as the EU prepares to unveil a historic crackdown on bonuses that will include rules to defer up to 60 per cent of payouts.
The Committee of European Banking Supervisors – an organisation of European regulators – will meet for a second day today to approve proposals that will usher in the most restrictive remuneration laws in the world.
Critics say that by going it alone, Europe risks a flight of talent to Asia and America and other countries which are refusing to implement similar rules. The rules come in spite of a coordinated effort by banks to convince regulators to water down some of the more draconian measures, with the industry still in the dark about the details to be announced this evening.
They are tipped to include a requirement that only 20 per cent of bonuses can be in cash and that at least 50 per cent must be paid in shares that cannot be sold for a mandated length of time.
They will also enforce a deferral period, meaning bonuses must be paid over several years, and a provision to take back money paid to managers whose decisions are retrospectively seen to have caused losses.
The announcement will leave the UK Financial Services Authority (FSA) with under two working weeks to decide how the changes will apply to its existing Remuneration Code.