EU watchdog to consult banks on pay cap rule

Michael Bow
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EU BANK regulators will launch a consultation this summer to determine who will be hit by a controversial EU law capping bonuses, opening the door for the hardline rules to be eased.

The European Banking Authority (EBA), the regulator that sits above national banking watchdogs, will launch two 12-week consultations in parallel later this year on the cap, which was approved by EU politicians last month.

The law, which comes into force in 2014, would make it illegal to pay bankers bonuses double their fixed annual salary.

The EBA has a mandate to submit technical provisions to EU policymakers clarifying which workers it thinks should be hit by the cap. The consultation will ask the banking industry who it considers to be a so-called risk taker, raising hopes the rules could be narrowed. A second consultation from the EBA will also look at how regulators should treat non-cash bonuses.

An EBA spokesman said the exact timetable for the consultation was not defined but that it would probably launch before the summer, ahead of a March 2014 deadline to submit the organisation’s recommendations.