Bankers covered by the European Union’s cap on bonus payouts may get as much as 500 million pounds ($746 million) more in regular paychecks as a result, said Andrew Bailey, the U.K.’s chief banking supervisor.
Bailey, who will lead the Prudential Regulation Authority when it starts operations next month, told lawmakers in London today that he had “back of the envelope calculations” laying out the effect of the bonus curbs that are part of the implementation of global rules drawn up by the Basel Committee on Banking Supervision.
The European Union brokered a draft deal last month to ban banker bonuses that are more than twice fixed pay, in a move lawmakers said would prevent excessive payouts and curb irresponsible risk taking. The accord, which also sets out how the EU will apply Basel bank-capital requirements, was reached by the European Parliament and Ireland, which holds the rotating presidency of the bloc.
U.K. Chancellor of the Exchequer George Osborne opposed the bonus curbs at a March 5 meeting of EU finance ministers, saying the plans would harm the competitiveness of the nation’s finance industry and drive up fixed salaries. Lawmakers have said that they will resist efforts to water down the pay limits.
To contact the reporter on this story: Ben Moshinsky in Brussels at firstname.lastname@example.org
To contact the editor responsible for this story: Christopher Scinta at email@example.com