European Union nations approved bank-capital and bonus rules for the 27-nation bloc in the face of continued opposition from the U.K.
The measures, which ban bonuses of more than twice fixed pay, were approved today at a meeting of national ambassadors, according to a spokeswoman for Ireland’s EU presidency, who couldn’t be identified in line with official policy. The U.K. was the only country to raise concerns at today’s meeting and lacks the power to block the measures, according to an EU official.
“We’ve made clear that we cannot support this agreement,” a U.K. diplomat said in an e-mailed statement. The plans will lead to “increases in fixed pay for bankers, making it more difficult for banks to retain capital in a downturn.”
European Parliament lawmakers and Ireland, which holds the rotating EU presidency, brokered a deal last week on how to apply an international overhaul of bank rules to the bloc’s 8,300 lenders. Legislators insisted the package include banker pay curbs.
Following today’s endorsement by ambassadors, the draft laws must be voted on by the Parliament, and signed off on by ministers, before they can take effect. The U.K. doesn’t have a veto on the plans, which require weighted majority support in the EU’s Council of Ministers.
“The U.K. concerns on the bonus rules are well known,” Chantal Hughes, a spokeswoman for Michel Barnier, the EU’s financial-services chief, said in an interview. “The U.K. was involved, as were all governments, in the long negotiations on the text and we believe that on all points their concerns were generally taken into account.”
The EU has said it plans for the legislation to take effect on Jan. 1, though that may slip to July 1, 2014, depending on when the rules are published. Officials said last week that the pay rules wouldn’t apply to bonuses awarded in 2014 based on performance in 2013.