EU moves to cap bank bonuses

European Union officials last night struck a deal to cap bankers' bonuses at a year's salary. Under the deal some bankers may still earn twice their salary in bonuses if there is explicit approval from shareholders.

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UKIP: Cap on bankers' bonuses would 'hurt' workers

The attack on banker bonuses would hurt ordinary workers, UK Independence Party spokesman Godfrey Bloom said today in response to the European Union's move to cap bankers' bonuses.

UK Independence Party spokesman Godfrey Bloom. Credit: Stefan Rousseau/PA Wire

Mr Godfrey said: "This move is the European Parliament getting the boot into bankers for a bit of political pleasure, but it is totally misguided.

"It may give the EU a dirty satisfaction to punish financial people it hates, but this agreement just hurts ordinary workers and the economy in general."

RBS boss questions EU move to cap bank bonuses

RBS chief executive Stephen Hester has told ITV News' Economic Editor Richard Edgar that the European Union's decision to cap bankers' bonuses should not be targeting the industry.

Mr Hester said: "Why just one industry? What other industries do you want caps on and income policies, then you have the question of does your economy then thrive based on that central control?"

RBS boss says bankers should not be targeted regarding bonus caps. Credit: ITV News

Unite: Hester should show leadership over bonuses

Trade union Unite has attacked RBS chief executive Stephen Hester for not backing the proposed EU cap on banker bonuses.

Instead of setting an example to the world and supporting a cultural shift in the banking industry, Stephen Hester refuses to back the EU cap.

As the head of Britain's biggest bank he should be showing more leadership and drive change.

There would rightly be an outcry if those at the top took rewards that are undeserved.

– Dominic Hook, Unite national officer

Hester has warned that a proposed cap on banker bonuses will chase “economic activity ... to where the playing field is more favourable".

RBS today announced losses of £5.16 billion - a fifth consecutive annual loss.

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Hester: Bonus cap will chase away economic activity

by - Economics Editor
Stephen Hester
ITV News Economics Editor Richard Edgar speaks to Stephen Hester. Credit: ITV News

RBS chief executive Stephen Hester has warned that a proposed cap on banker bonuses will chase “economic activity ... to where the playing field is more favourable".

On the day the bank announced losses of £5.2 billion, Hester defended his record and justified his bonus.

“We're doing a lot for this country from a very big mess,” he said.

CBI: EU bonus cap 'sets dangerous precedent'

The Confederation of British Industry (CBI) has hit out at European Union proposals to cap bankers' bonuses at a year's salary.

These proposals fly in the face of efforts to align pay and performance.

They would significantly constrain shareholders' ability to hold companies to account by voting on pay policy and implementation, and to select board members.

Ratios will also make it harder for companies to respond to a downturn by adjusting pay, which undermines financial stability.

We're concerned that this proposal sets a dangerous precedent and could spill over into other sectors, damaging jobs and growth.

– Matthew Fell, CBI director for competitive markets

EU Minister: Banking reforms will protect taxpayers

Michael Noonan
Michael Noonan has led talks within the European Union. Credit: Julien Behal/PA Wire/Press Association Images

Michael Noonan, Ireland's finance minister, has talked up the EU’s proposed financial reform package, which includes a cap on banker bonuses.

Noonan, who led the negotiations for the 27 governments in talks last night, said: "This overhaul of EU banking rules will make sure that banks in the future have enough capital, both in terms of quality and quantity, to withstand shocks.

"This will ensure that taxpayers across Europe are protected into the future."

Boris Johnson dismisses EU banker bonus cap

London Mayor Boris Johnson has attacked EU plans to cap banker bonuses.

He said: "People will wonder why we stay in the EU if it persists in such transparently self-defeating policies. Brussels cannot control the global market for banking talent. Brussels cannot set pay for bankers around the world.

Boris Johnson
Boris Johnson has attacked the European Union again. Credit: Steve Parsons/PA Wire/Press Association Images

"The most this measure can hope to achieve is a boost for Zurich and Singapore and New York at the expense of a struggling EU.

"This is possibly the most deluded measure to come from Europe since Diocletian tried to fix the price of groceries across the Roman Empire."

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